| MANAGE & LEAD |
PLAN YOUR WORK AND WORK
YOUR PLAN
Provide a vision that looks beyond the present to the desired future
by Cheryl Koch
I
ndependent insurance agencies are at a crossroads.
Decisions made in the next few years will have a
profound and perhaps irrevocable impact on the future
of the independent agency system. Strategic planning
is not only a necessity, but it may also be a business
imperative. Yet, it seems very few agencies spend the
time and resources required to create and implement
a comprehensive business plan. In the past, the old
“double your premium volume in five years” method was
sufficient, but without the details of exactly how that is to be
accomplished, it isn’t really a plan at all.
Agencies need business planning because the world is
changing rapidly all around them. Insurtech is not a “fad”
that will soon pass, it’s a force with which to be reckoned.
It would be foolhardy and unrealistic to assume that
economic conditions, consumer needs, and expectations,
competition in the marketplace, or a host of other factors
will remain constant for five, three, or even one year in
the future. Agency business planning is the process by
which the guiding members of an organization envision its
future and develop the necessary people and processes to
achieve that future.
In other words, agency business planning helps the
organization create its own future by examining both
internal and external environments and creating a journey
map to guide the agency toward a better outcome than
would be achieved without it.
Some would argue that in today’s fast-paced business
world, planning is the antithesis of being nimble and agile.
However, the benefits of developing a business plan are
many, not the least of which are the steps necessary to
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prepare the plan. The process of planning, in addition to
the actual plan itself, creates its own benefits to the agency
in the form of:
• A compass for owners, managers, and staff as they
conduct the day-to-day business of the agency,
• Focusing on activities that add value to the agency’s
clients and ultimately to the agency,
• Identifying and optimizing the use of scarce resources,
including time, money and talent,
• Understanding the financial aspects of the business,
including asset disposition,
• Anticipating and avoiding obstacles that may appear
along the pathway to success, and
• Providing benchmarks against which to measure
performance, individually and as an organization.
Before undertaking any project as important and complex
as creating a comprehensive business plan, consideration
should be given to whether or not the agency is ready
for this level of activity. Many individuals will be involved
in the planning process, including key business partners,
clients, and insurance company personnel. Agency
business planning is a project of planned change, and a
simple governing principle applies: if the organization is
not ready to create and implement the plan, it makes little
difference in how the planning process is organized or who
is involved. It is highly unlikely that any significant outcome
will result.