What Are You Tolerating That Your Future Agency Can't Afford?

Welcome to the Agent Leader Podcast. This is the podcast for independent insurance agency leaders to raise the bar, to challenge the status quo, and ultimately become your best version possible. Hi, my name is Brent Kelly and I am your host. And today I want to talk about something that quietly destroys more agencies than almost anything else. You know, I have the opportunity, whether it's a conversation on the phone or in a Zoom call or at a live event, or maybe where I'm speaking with a number of agencies to really get to hear the thoughts and the concerns and the challenges of agencies of what they most want. And today I want to talk about the thing that I truly believe destroys or slows down agencies more than anything else. You ready? The slow drift into average. The slow drift into average. Now, maybe you're a person that likes to go to the lake in the summer, right? If not, follow along in my analogy here, but imagine you're going to maybe a lake house or a resort or a cabin or somewhere, and there's a lake and you're going to spend some time floating on the lake in a raft, right? You get on the raft and you're relaxed and you're comfortable. You're away from the office and you're just gonna breathe for a minute. Maybe you slowly close your eyes and get relaxed and you kind of drift off a little bit. Now, unfortunately, or fortunately, 30 minutes go by and you suddenly wake up or realize, oh my gosh, where am I? And you hop up off your raft and look, look around and you realize, oh my gosh, I am so far away from where I started. Now, here's the thing. You didn't feel yourself drifting. You didn't notice the movement, but the current slowly pulled you away. Why do I share this? Well, because that's exactly how mediocrity happens inside insurance agencies. Not through one massive failure, not through one catastrophic decision, but slowly, quietly, one tolerated behavior at a time, one avoided conversation, one lowered standard, one excuse, one wrong client, one underperforming system, one rationalized behavior after another. And eventually leaders wake up frustrated. Growth isn't as much as they want. Profitability isn't high. Margins are tighter than they should be. Teams are exhausted. Too much chaos, too many distractions, not enough accountability. Not enough intentional growth. And the hard truth is this: most agencies do not have a talent problem. What do you mean, Brent? Yeah, most agencies, although it doesn't mean you shouldn't want to have greater talent, that isn't their number one problem. Most agencies do not have a talent problem. They have a standards problem. So today we're going to talk about the hidden cost of tolerating average. I have done podcasts talking about what you tolerate and the effect of tolerating things you shouldn't. But today I'm gonna talk specifically about the hidden costs of tolerating average, talk about why leaders allow drift and how average compounds over time. And lastly, we'll talk about the standards that elite organizations must create if they truly want breakthrough performance. So I'm gonna highlight a few different areas on this podcast. Some may apply directly to you, some maybe not as much. I'm also gonna ask some reflection questions in each area because I want this podcast not to just be a place where I spew ideas and things that hopefully you find valuable, but also questions that you can reflect and go, how are we doing as an agency in this area? So let's start with the first idea or principle is this: average never announces itself, right? It's like you wake up one day, you know, I think I'm gonna be average today. You know, I think today's gonna be an average day and we're gonna have an average month and get average results. It never happens that way because average enters quietly. And here's how this happens. You hear things like, we'll deal with it later. That's just how things are here. Well, at least this person's trying. Well, you know, we're not getting the results, but we're really, really busy. We just can't find people. That's just where the market is today. These small exceptions often become culture and repeated tolerated behavior becomes the agency's standards. And I've talked about this before, but, and I, this isn't my saying, but I've starred it, is that we don't always necessarily hit our goals or achieve our goals. In fact, most time we don't. Most people don't hit their goals, unfortunately, but we will all rise or fall to the level of our standards because average compounds over time. And see, think about culture. Culture is how we operate. In fact, we, we talk about this at the Sitkins Group all the time. Culture is the language and behaviors that are normal in your agency. What people say, what people do. Culture is the language of behaviors, not slogans, not mission statements, right? Those are not culture. Those are things that maybe support culture, but culture is the language and behaviors that are normal in your agency today. So I mentioned I was gonna ask some questions, some reflection questions for you as an agency leader or your leadership team. Here's some questions to consider. You ready? What behaviors have we normalized in our agency? What behaviors have we normalized in our agency? Here's another question to consider. What conversations have we been avoiding? Maybe it's a conversation with a carrier. Maybe it's a conversation with a team member. Maybe it's It's a conversation with another leader. Eh, it'll get better. We've been avoiding it. We've been drifting. And here's the last question. What standards have softened? What standards have we softened? Maybe excuse after excuse after excuse that we've softened. All of a sudden that has become our new normal. All right. The next area or principle that I wanna talk about is what is the cost of tolerating average clients? Not every client is a great client. You probably know that. But like, how intentional are we? We find that when we tolerate average clients, here's some things that happen. The team becomes overwhelmed. We become a reactive agency versus a proactive agency because we're always putting out fires. There's service chaos. There's constant interruptions. Oftentimes we find that low-value accounts, not that they're all bad people or businesses, but they become very demanding. It creates this capacity drain, both sales and service in terms of capacity. And quite frankly, these accounts are not very profitable. In fact, one of the key principles that we talk about is that we cannot allow profitable accounts to subsidize unprofitable accounts. And this comes back to the white paper that we released last year around the Sitkins Principle analysis is that this is very true. In fact, you've heard the 80/20 rule probably forever. We looked at agencies in 4 tiers, the top 25% of clients, next 25%, third 25%, and the bottom 25%. And here's what we found. The top 25% of clients— this may not surprise you, create a majority of revenue. In fact, our studies show the top 25% of clients on average produces 88% of your agency's revenue. The next 25%, 25% of clients produces 8%. This means the top half of clients for most agencies represent 96% of revenue. You all can do the math. The bottom 50% produces 4%. 4% of revenue. So the bottom tiers consume a disproportionate amount of energy. The wrong clients create operational chaos. Wrong clients destroy focus. Subsidized clients, those bottom half, bottom quarter, often hurt the agency culture, not just in terms of time and energy, sometimes E&O issues because we're not really paying much attention. And here's the big part. Capacity is trapped in the wrong relationships. We have way too many people supporting and working on accounts that provide little to no profit in our agency. So just think about the cost of tolerating average clients. Let's get to the third area. I want to talk about the cost of tolerating average producers. We also believe this: we cannot allow profitable producers to subsidize unprofitable producers. Well, what happens if we allow that? Well, here's some things that come to mind. Inconsistent prospecting. We react in our selling process versus proactive selling processes. Weak pipelines, low pipelines, excuse making all the time. Well, this is why, and this hasn't happened. I mentioned lack of processes, including the selling process, low accountability. And by the way, here's the key area I want to say. Hope for producers is not a strategy. I hope they get better. I hope it improves because standards in your agency create consistency. Accountability should become normal. It's interesting that the best agencies that we work with that are performing at the highest level, accountability is simply just part of the agency. It's in the agency DNA. It's who they are. And you already know this, but let me just say it out loud. The best performers, the best producers seek, demand, want, desire accountability. The worst performers run as fast and far as away they can from accountability. Success leaves clues. So does failure. Activity without intentionality creates noise. All right. I just wanna take a quick minute during this podcast just to kind of share with you that something that you might already know. We know that where standards are weak, where capacity is leaking, where accountability is inconsistent, where chaos becomes normal, right? All this thing, when that happens, we lose growth. We lose profitability. We lose capacity. We lose alignment. If you would like to get an agency snapshot of where you are today and how you're performing in key areas, simply go to sitkins.com/getmyscore. We'll have the link here in the show notes, but sitkins.com/getmyscore. It's a simple evaluation. You'll be able to benchmark your agency, identify biggest opportunities, and gain clarity around your current standards. So go to sitkins.com/get My score. All right, let's go to the fourth area that I want to talk about of the cost of tolerating average. This is the cost of tolerating average leadership. Well, if we tolerate average leadership, what happens? What does it look like? Well, here's some things that I've noticed that we've noticed as an organization. We avoid hard or challenging conversations. We have inconsistency in emotion. And by the way, every person on your team is watching you. Are you calm? Are you steady? Are you consistent? There's often a lack of follow-through, right? People get excited about ideas or processes or whatever, new ways of doing things or improved ways of doing things, and then nothing is ever followed through. There's unclear expectations. There's mixed messaging often because leadership isn't aligned. Maybe one department is saying this, another department is saying this. One leader is saying this, one leader is saying something else because leader Leadership avoidance, it's very expensive. And here's something that, you know, I think most leaders, good leaders, they want to be kind human beings. Clarity. Clarity is kindness. People wanna know who you are. People wanna know where we're going. People wanna know how they fit because weak leadership creates confused culture. So that's the cost of tolerating average leadership. What about the cost of tolerating average systems? Is there a cost to that? Yeah, of course. What do symptoms look like if you are tolerating average symptoms in your agency? Constant interruptions, role confusion, reactive workflows, poor communication. We're always in firefighting mode. We're busy, busy, busy, busy, busy, but not productive. We talk all the time at the Sitkins about the green zone, that producers need to be in the green zone, the revenue, the results generating stuff, but they're distracted. Chaos is normalized. Our blue zone for the account managers, the service team we talk about at Sitkins, which is being really intentional in our service processes and our service systems and doing the right things at the right time with the right clients. Interruptions. That's a, that's a result of broken systems because systems either reinforce standards or they weaken them. I'll say that again. Systems either reinforce standards or weaken them. And operational inconsistency creates emotional Exhaustion. Up and down, all around. Now, the next thing I wanna, I wanna share with you is this. I'm thinking I've gone through a bunch of different areas of the cost of tolerating averages, but let's talk about this for a second. This is really important. Why do leaders tolerate average? You know, when I talk, uh, in training programs specifically with producers, but it's really for any department, to me it's one thing to talk about like the outcome or what it means, but then I, I wanna get to the why. Why, why does this happen? Like, what are some of the psychological reasons? Why do these behaviors exist? I don't think leaders tolerate average, as I said at the beginning of this podcast, because they want average. But I do think things happen over time and drift because a few different things that jump out. So here's why leaders tolerate average. Often it's fear of conflict. I don't wanna step on someone's toes. I don't wanna say this thing that's gonna upset somebody, right? We've been doing this thing for a while. A fear of losing people, which goes on a fear of conflict. If I have this conversation, if I tolerate this, what, what if they leave? I know they're not great, but they're better than nothing. Which goes along with a scarcity mindset. We live in scarcity. What we're gonna lose versus how we're gonna grow. And there is a difference. There's often an emotional attachment, certainly with family agencies, and understandably so, but really in all agencies. I know they're not good, but they're a nice person. Now I'm gonna stop here just for a second because I love people and I struggle with these things myself cuz I like people. I wanna see the best in people, but oftentimes you're hurting both parties. You as a leader are frustrated. You're mad by yourself. Why isn't this person doing the things they should be doing? And quite frankly, that person knows deep down in their soul that this is not the place or the thing they should be doing. And sometimes we just need to have that conversation and realize the emotional attachment is preventing us from being our best version, their best version. Why else? Exhaustion. Just tired. Just tired. I don't have time or energy. I'm just trying to get through the day. I can't deal with this today. I think lack of clarity is another reason why oftentimes we'll see this come up, this drift, right? The fact that I don't really quite know what I want or what we want. You know, one of the first questions I ask agencies when we have initial conversations and assessments is what their agency is going to look like in 3 years. I jokingly say it this way. What do you want to be when you grow up?? And often I'll get a snicker or a laugh, and sometimes people will go, you know, that's a really good question. I'm not quite sure. And it's not because they're a bad person. It's not because they don't want better. It's that they haven't really been clear on what's most important to them. Where are you today? Where do you want to go? How are you going to get there? I think oftentimes the good results trap is a big reason for this. I said this at the beginning of the podcast. I've talked about this in other podcasts. This business, this industry is incredible. You can be really good. And have a really, really, really good life and lifestyle. But good absolutely becomes the enemy of great and elite, as Jim Collins talked about in his book. We believe at Sitkins that good is not only the enemy of great or elite, but it's the enemy truly of you becoming your best version possible. I think oftentimes leaders want great results, elite results, but they don't really want elite accountability. Average is easier in the short term. Average is pretty easy right now, but long-term it's really hard. To do some of the hard things right now actually makes your long-term lifestyle and your agency growth easier. So we kind of have to flip those ideas, those principles. All right. So some questions I want to ask you as an agency leader in terms of leadership drift. Again, please be honest with yourself. This is not for me to know. This is for you in the comfort of your own car or your own home or your own office. Some questions to ask yourself. Number 1, What am I, or if you wanna say from a leadership team, we, what am I or we rationalizing? If we were coaching ourselves and being really honest, what are we rationalizing? What have I or we normalized? What standards have I or we softened? And here's a big one for all of you. What am I avoiding confronting? What is the brutal fact that you know you need to confront that maybe you've been waiting too long? And all of a sudden another month goes by, another 6 months go by, another year goes by, another 3 years go by and you go, wow, I've been avoiding this confrontation with myself or somebody else or something for too long. One of my favorite stories, in fact, I had Marcus Ogden on several episodes ago, episodes ago. You can go check that out. And he talked about this as well. And I heard this from another speaker years ago, but this idea of the cow versus the buffalo. It's been out for quite a while now, but it's a really good analogy and great story. The fact that in Colorado, in the United States, is one of the few places that both cows and buffaloes coexist. And when a storm comes, the cows will face away from the storm and they'll cow walk away from the storm. Buffalo, the same time a storm comes, they'll actually face towards the storm and charge into it. What's the principle? They're both going to be in the storm. The difference is the cow's gonna walk along with that storm for a very long time. The buffalo's gonna face it head on and get through it quicker. Right? So what things are you avoiding? Because here's the principle that I share all the time with groups, and I'll share on this podcast. You either face your fear or it will become your traveling companion. You face your fear or it will become your traveling companion. All right. Next area that I want to talk about, I want to talk about the transition to standards, right? So we've talked about some of the things that where we drift and why that happens, but let's talk about changing that landscape by creating standards because standards ultimately create freedom. When you and your agency create standards, they're not punishment. Standards create clarity. And by the way, clarity reduces stress. You have better decisions. There's better accountability because you know what you stand for. There's better alignment. We all know where we're going. There's better culture because we're part of something that matters. Matters. Now, what could you have standards around? Well, I've talked about some of these standards around the type of clients that you will work with, standards around how we communicate with each other, standards about our sales activities and metrics that we're looking at, standards around leadership and leadership conversations, standards around accountability, standards around how we're gonna focus, standards around key behaviors, because standards reduce confusion. Standards protect culture. Standards improve confidence. So here's the final thing I'll talk about on this podcast is that organizations reflect what leaders consistently consistently allow. This is the Agent Leader Podcast. Organizations reflect what leaders consistently allow. Standards. Your standards will shape the culture. Your standards will shape performance. Your standards will shape people. So here's my final question to summarize everything that I've been talking about on this podcast. What am I currently tolerating that my future organization cannot afford? I'll say that one more time. What am I currently tolerating that my future organization cannot afford? Now, I mentioned this before, I'll mention again. If you are looking at new standards, you have real issues, but maybe you're not sure how to confront it. Maybe you want to look at things differently. Maybe you do want to raise your standards. Well, go to sitkins.com/getmyscore. It's a very quick snapshot. Should take you a few minutes, but gives you a starting point to start realize where am I, where do we want to go, how we're going to get there. But it starts with knowing your score and knowing where you exist and live today. Clarity creates standards, standards create accountability, and accountability creates transformation. I want to thank you for being a listener of the Agent Leader Podcast. I love sharing these ideas, this information. I get the chance every week to work with agencies and training and coaching and have conversations with teams. And now I get a chance to get on here and share some of this with all of you, the Agent Leader listener. If you're getting value out of this, hey, give me a rating, give it a review, give it something, give it a share. We're always looking to grow this audience because at our deepest desire in our heart, we truly want to help agencies become their best version possible. Thanks again for listening. Wish you all the best in your success. Hey there, Agent Leader. Brent Kelly here. Want to take just a few seconds to remind you that now is the time to create your true best version possible agency. If you go to sitkins.com/bookacall, sitkins.com/bookacall, we'll get to know more about your agency, conduct an agency assessment, and provide your agency with a customized plan to help you avoid some of the pitfalls, frustrations, challenges, and roadblocks to get your agency to true ultimate freedom. And become its best version possible. It all starts by going to sitkins.com/bookacall.