GROW YOUR OWN: It's the people, stupid. Invest in your staff and reap the returns.
Leader's Edge, January/February 2006
Author: Robert J. Lieblein
FAST FOCUS
- Training and education help deepen your talent pool.
- Programs that help you attract and retain the best and brightest are worth the sweat.
- The biggest bonus: building leaders to take over your business.
Welcome to another edition of Celebrity CEO Match Up. We’ve reached the final round, and for $1 million, can you tell us what the resumes of these three top executives have in common?
- Robert L. Nardelli, chairman, president & CEO of Home Depot
- W. James McNerney, Jr., chairman, president and CEO of The Boeing Co.
- Larry Bossidy, former chairman and CEO of Honeywell and Allied Signal
(Cue ticking clock music, then chime)
Give up? These three Celebrity CEOs all came from the famous industry training ground and educational powerhouse General Electric Co.
In 2004, Human Resource Executive magazine named William J. Conaty as its HR Executive of the Year. For another chance at that million bucks, which company has Conaty as its head of human resources? No surprise that it’s GE.
In making the award, the magazine noted Conaty’s “global training program,” establishment of “one of the world’s most well-respected leadership-development programs and executive-training centers,” and a robust diversity program.
Bully for GE, but what does the leadership and training practices of one of the world’s largest companies have to do with Main Street agents and brokers? Just this: the success of any business relies on well-trained people—your firm’s managers, producers, support staff and mentors. From the CEO on down, each can only play a role to the level of their training and education. When those keys are turning in the locks, doors will open to business stability, growth and increasing shareholder value.
In the reality show that is your everyday business, your challenge is to hit the most-watched list by identifying the top talent in your agency and paying attention to their professional development, which will indirectly create your internal succession/perpetuation plan and provide you with key competitive advantages. If you are the CEO or a shareholder, you should view training as if your agency’s success and your future depend on it.
But the insurance industry, like many other American businesses, faces a growing talent problem: where to find it, how to nurture it, how to keep it. Insurance has it tougher than most. The average age of people in our industry is rising, and you don’t see young people coming out of business schools clamoring to join our ranks. The current supply of new talent will not meet projected demands. This is true for producers, account managers, CSRs, and other positions. How do we solve this?
I won’t suggest any industry-wide solutions, but I will lay out a plan that allows you to leave that problem to your competitors. With a robust, structured training and education program, you can ensure high retention, low turnover, better morale and a reputation that will make the best potential employees seek you out.
Often, when I work with an insurance agency on strategic planning, one of the weaknesses that is exposed is the ability to recruit, train and retain talent. Yet almost all agencies list these key values and beliefs relating to employees:
- “We value an environment that encourages professional and personal growth.”
- “Our people need to be well trained and managed.”
- “We must reward people for performance.”
- “Everyone should achieve high goals and objectives.”
Although they espouse these views, many agencies take a shortsighted view of training and education and fail to recognize this critical strategic priority. As a result, they lose top talent and people with valuable experience. The constant drain of experienced people puts in jeopardy any succession plan, and management is forced to fill a vacuum with less-experienced people or remain in a non-growth mode. That’s like a shark in a non-swimming mode. When he stops moving, he dies.
Incubate Great Staff
If you accept that formal education and a training program are the antidote to the talent drain, you’ve taken a good first step. But that step is worth little unless you work to build a culture that embodies that belief in professional development. When you follow through on the concept of “investing in your greatest asset,” your recruiting and retention issues will slowly fall by the wayside.
As the CEO of an agency, you must live the mantra. Show your commitment every day and create a structured program that enables developing employees to reach their full potential and to mature into strong team leaders who one day will be able to fill your shoes as the CEO.
One of the first benefits you’ll see is that your agency will rise above your peers. Even though it’s costlier to recruit new employees than it is to train and retain existing ones, most agencies don’t have a formal training program. Many of these agencies experience high turnover rates and have employees who possess outdated skills.
When you can differentiate your firm from others on the basis of a formal training program, you gain a competitive advantage. Make that a key component of your value proposition, and make sure clients—as well as prospective employees—know about it. You’ll keep your “employee prospect pipeline” full from ambitious people who want to land at an agency that really, truly cares about them while developing a great story they’re eager to tell to clients.
Sold on the idea of a training program? Great. Now here’s the single action most critical to its success: make your new training and education program a strategic priority among senior executives, including shareholders. Because training is a long-term process, it will not produce immediate returns; the process of planning, identifying objectives and setting goals is what turns a vision into a reality.
A second fundamental requirement is communication throughout the agency. Once employees know that company leadership is adhering to stated core values and beliefs, ambitious staff members will want to be selected for the program. Practically speaking, involvement will be desirable in much the same way as with other sales incentives, such as a trip. People want to be identified and rewarded for top performance.
Five Steps to a Robust Training Program
Here are five suggested steps to make the program a reality for your agency.
1. Set a goal of enrolling the top 10% of your staff in the program. That doesn’t mean today’s best performers; look for those employees who demonstrate the potential to be top performers or future leaders. And don’t limit the program to producers; identify account executives, account managers, CSR’s, administrative and support personnel, as well. Select your future stars annually so new talent is always entering the program.
2. Develop the training plan with the goal that it improves the skills of the employees and provides you with a competitive advantage that cannot be matched by competitors. That means choosing programs that go well beyond 360-degree feedback testing or competency exams to provide your people with unique or new skills. Just like someone getting a degree in accounting would take different classes than someone getting a degree in mathematics, every person should not be expected go through the exact same training.
3. Provide mentors to the selected employees who are responsible for overseeing their development and who can provide guidance and support. Mentors have accountability and responsibility to help ensure the success of the employees.
4. Continually monitor and evaluate the progress of the entire program as well as the advancement of each employee to ensure that it remains a priority and that the selected employees are improving their skills. With proper evaluation, you gain comfort knowing that you are developing a deep pool of talent for the future of your agency.
5. Finally, continually review the program to ensure that it is aligned with your strategies and initiatives to help the agency maximize value and that it creates a succession and perpetuation option for your agency.
Worth the Sweat
Right about now you might want to stop reading and get back to that pile on your desk or the blinking phone message light. Those everyday pressures—not to mention the challenge of implementing the existing elements of a strategic plan to develop your business—might make you wonder if a robust training program is worth the effort. The answer to that lies in the potential of each agency, and you must answer it for yourself. But there are many benefits that a formal training and education program can deliver.
Foremost, you are developing future leaders for your agency, and that is a very important element in creating and enhancing shareholder value. All successful agencies are built around a terrific sales culture with great service, but how deep is the bench when it comes to talent? If it’s done properly, the greatest benefit of a formal training and education program is the creation of a succession and perpetuation strategy that will prepare your key people for leadership roles.
Sometimes the most viable perpetuation plan is one that requires selling to a third party. But many agency owners don’t want to sell out. Those agencies that have successfully passed internally to the second, third or fourth generation of owners share a common thread: they have developed great talent with both the desire and the ability to take over ownership. These skills often were not brought into the agency, but rather, were developed through training, educating and mentoring while at the agency.
Are you concerned that your people will gain valuable training and use it as leverage in the job market? Odds are, the truly smart ones won’t. Because if you have a robust, ongoing training program, they will see that at your agency, they can continue to advance and grow. Why take a short-term gain and then stagnate somewhere else when you can continue advancing in the dynamic agency where you already work?
On the other hand, if your environment is so competitive that well-trained employees might jump ship to work at other dynamic agencies, you have no choice but to support a training program…just to keep up. However, in most markets, your agency will probably be one of the few with a great training program, and that will mean that the market’s best and brightest will be constantly slipping resumes under your door.
In fact, one of the most visible measures of success of a training program is the boost in morale around the agency. Such a program reinforces your stated values and beliefs about how to treat employees, and this improves the entire staff’s perception of the agency and its management. This alone will result in lower turnover, create tangible value, and make your agency a leader in the development of human capital—your people and your most important asset. If you are a student of strategic planning (and by now I hope all of you are!), you will see how a training, treated as a strategic priority and an integral part of your management process, will create a bridge that measures and rewards behaviors that are consistent with the agency’s goals, values and culture.
An energetic and consistent training and education program is an investment in your most important asset, one that will pay dividends on many fronts: lower staff turnover, more skilled top talent, succession planning, increase in shareholder value and competitive advantage, to name just a few. Add those things up, and you’re looking at creating a value proposition that most other agencies cannot match. That’s truly an equation that can be turned into a ratings sweep.
Lieblein is a contributing writer and managing principal of WFG Capital Advisors. rlieblein@wfgca.com |
