Re-writing What Defines Success
On April 14, 2020, we closed with “MarshBerry suggests it is time to toss out the old five-year playbook and re-write the 2020 business plan.” More specifically, MarshBerry suggests it is time to re-write what defines success for your firm in 2020 and toss out {revisit} the old five-year strategic playbook {later in the year}.
If you are part of the insurance distribution community, it’s likely that you rolled into the year with significant optimism and big 2020 goals. The market was hardening, valuations were continuing to rise, and the prospect for growth was tremendously positive. Many of our clients had even set their sights on a 2025 five-year strategic plan, with a different set of external factors to guide decision making. Now, one quarter through 2020, seemingly every circumstance that drove your strategy has changed. Even more challenging, the short-term future has never been more uncertain. Attempting to answer questions around potential impact is a long-winded debate. Deciding how to act is even more complicated.
In our opinion, insurance distribution is the greatest industry in the history of mankind. This pandemic will pass. However, at this point, no one can predict where our industry will stand when we wake up on January 1, 2021. One thing is for sure: There will be firms that will start the year way ahead of their peers, using this trying time to accelerate change, grow and improve. As much as our industry is resilient, often, it is complacent. Because of its forgiving traits, the average firm lacks a sense of urgency around excellence. It takes a great recession or a black swan event to force critical, difficult decisions.
We have always advised our clients to be systematic and diligent about strategic and operational planning. There is no better time to adequately plan and execute. While the focus of your planning may shift from long-term strategic thinking (three years) to short term tactical planning (three months), ask the same questions:
- Where Are You (Today)?
- Where Are You Going (over the next three months)?
- How Are You Going to Get There (what actions do we need to take to accomplish our three-month goals)?
Forecasting Analytics: Powerful financial and operational analytics can be a gamechanger on properly assessing “where you are” and “where you are going” as a firm. Lean on your team to gather relevant data points to help guide thoughtful decision making around: revenue recasting, leading new business activities, pipeline progression, organic expense reductions, aged receivables, and working capital. Leverage the virtual environment to properly assess your sales team’s tone around opportunity and use the proactive client outreach to understand potential industry vertical impacts. Set-up the data points and then update weekly.
Hopefully, by now, your leadership team has agreed to meet [at least] once a week for 2-3 hours to get an update on the metrics, gain critical market intelligence from client outreach, gauge virtual employee engagement, and set an action plan for the next few weeks around necessary execution items. We have seen a wide variance in the tone of our client base on issues ranging from new business to new hiring. Many firms have communicated a slowed pipeline, while others are taking a more aggressive sales approach using the crisis as a wedge. Some firms have retrenched and will not hire, while others are using this time to be different, “a virtual employer of choice.” Without the proper intelligence and assessment on current state, how do you even know how to act?
Redefining Success: Over the past 10 years, our best clients have consistently achieved double-digit organic growth. We think it is time for your leadership team to regroup and redefine what success looks like for 2020. Growth is an absolute indicator of performance. It is likely that our industry will feel the revenue impact during the last three quarters of the year. Rallying your team around short-term targets will be critical for culture, momentum and attitude moving into 2021. Our recommendation on resetting goals: set a goal that aims to outperform the average.
Lastly, we would urge you to schedule a full day meeting with your leadership team over the next two weeks, build a thoughtful agenda, send out preparation questions, and be judicious about how you shift your strategy. It’s hard to even utter the words, but it is time to place the five-year playbook on the shelf and focus on the now. You, and your leadership team, need to take the requisite time to educate yourself on where you are, redefine where you are going, and make the critical, difficult decisions in order to get there.
Tomorrow we will share thoughts on building your prospect pipeline as a component of your business strategy so when January 1, 2021, hits you are well poised for success.
If you have questions about Today’s ViewPoint or would like to learn more about strategic planning for the insurance agents and brokers, please email or call Tommy McDonald, Vice President at 440.392.6700.
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