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Analysis of Agencies with Revenues
Between $5,000,000 and $10,000,000
C
OMMUNICATIONS
–
E
MPLOYEE
, C
LIENT
,
AND
C
ARRIER
“Our entire staff meets more frequently
than any I’ve heard of, and yet we achieve
extremely high levels of productivity.
Many of our competitors seem to believe
that there is a trade-off between frequent
communication and productivity, but we
have demonstrated that communication
enhances productivity.”
“With many so-called ‘service businesses’
frustrating customers by extensive use of
automated phone systems, we believe we
have a real competitive advantage by
focusing on more, rather than less,
customer contact and communication.”
“E-mail has become an invaluable tool
that enhances communication, while also
providing documentation, and with great
speed.”
Technology (in the form of email, voice mail, and faxing) has done
much to help in the area of communications. However there is a
growing awareness, especially in a service industry, that technology
may actually hinder effective communication in many instances.
Best Practices
agencies work hard to apply technology when
appropriate, but recognize that the insurance business, at its center,
is a very personal business requiring frequent personal interaction.
The
Best Practices
of effective communication identified include:
extensive use of email, frequent staff meetings, agency Intranet
sites, Internet websites with direct email links to employees, well
laid-out office spaces, frequent customer contacts, human phone
operators (who offer voice mail as an option), and “management by
walking around.”
Many agencies in this size group have the added complication of
multiple agency branches, making internal communications even
more challenging.
F
INANCIAL
M
ANAGEMENT
“Aggressive growth plans (including
several acquisitions) have put us in a
position of forced discipline regarding
profitability. This discipline has served
us well, since now that the acquisition
debt has been paid off, we have developed
the habit of careful attention to
profitability.”
“Developing a budget and sticking to it
has been the key to our success.
Communicating progress toward our
growth goals has helped keep the staff
engaged.”
“Tying the compensation of managers
to the achievement of specific financial
objectives has been critical to our
success.”
The financial management function for businesses of this size is
critical. In fact, it is interesting to note that this revenue size group is
generally the first
Best Practices
group in which a Chief Financial
Officer position may be found, as the emphasis expands beyond
bookkeeping and accounting to a broader focus on complex
financial issues.
Increasingly at this size, the management and measurement of cash
flows, investment returns, equity ownership arrangements and
operating investment decisions requires a level of expertise not
generally required by smaller agencies.
The
Best Practices
identified in the financial management arena
include: effective cash management (investment sweep accounts,
cash flow planning, etc.), acquisition analysis, capital planning,
receivables management, the establishment and management of
acceptable investment returns, operational budgeting, automation
maximization, a plan to track key agency benchmarks (profitability
and productivity), and consistent and appropriate compensation
structures.
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