During my recent presentation to a NAHU Regional Leadership Summit, one of the incoming state presidents asked a compelling question: “How does an employee benefits agency survive and thrive in this post-reform world?”
In my team’s consulting work with independent agency owners and benefits practice leaders we have helped firms transform into agencies that are well positioned for today’s business environment. I call these companies “NextGeneration Benefits Firms.” And they share similar characteristics when it comes to their agency’s mindset, modeling and mechanics.
All three characteristics are worth exploration, but let me just start by looking at the mindset of these forward-thinking agency leaders.
The right mindset, or the “NextGen Mindset” if you will, is critical to the reinvention process, to making those necessary changes in the practice that will transform an agency into a firm that can remain relevant, profitable, independent and growing. The NextGen Mindset has three key components: innovation, investment and implementation.
Innovation: NextGeneration agency leaders are not only open to innovation and new ideas, they actively seek them out. They reach for and embrace new benefit plan designs, alternative funding tactics, the latest technology and employee engagement tools, novel cost-containment strategies and other groundbreaking moves that improve the employer’s plan, its control and its benefits spend.
And these agencies, with these resources behind them, are able to offer current and potential clients a better value proposition than their competitors.
NextGen firms are always looking out for innovative ideas.
Investment: For the past 70 years, benefit agency leaders rarely had to make an investment that didn’t already pay for itself. For example, a new account manager would be brought on to handle new clients; a larger office would be procured to house the bigger staff needed to handle new business. In other words, investments were usually made from new revenue. Agency leaders rarely made a “bet,” an investment that was speculative.
Today, NextGeneration agency leaders are investing heavily in themselves, their team and their capabilities, usually with no guarantee of a positive return. These are well-calculated bets, to be sure. But whether it’s the agency leaders investing in themselves by joining a peer-exchange program, sales training for account managers and producers, a new agency management system or CRM, or a marketing or outsourced lead-generation program, these agency leaders are financing the future success of their firms.
NextGen firms are always investing strategically and not reactively.
Implementation: This final piece of the NextGeneration Mindset is, in many ways, the most critical. Regardless of the value of an innovative idea or strategy or investment, without implementation there are no positive results. Without execution, that game-changing strategy is worthless, that investment in the brilliant technology is wasted dollars.
Implementation requires more than a plan and a fierce commitment to execute that plan. Accountability is key, both internal and external, the latter ideally with a group of industry peers that share and support your goals. Most of us will only hold ourselves accountable for goals that others know about.
NextGen firms are always building accountability into their implementation plan.
A new mindset based on a passion for and commitment to innovation, investment and implementation is the foundation for a benefits firm that can drive sustainable, organic growth.
In my upcoming columns, I’ll examine the modeling and mechanics characteristics of NextGeneration Benefits Firms.
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