To coach or not to coach? That is the question
Choosing the most coachable
By Roger Sitkins
There is no doubt that the best agencies—the ones getting the best results—have one or more great coaches among their ranks. A prime example of this is the recent Super Bowl, when both teams had great coaches.
In my last article, I discussed the need to name a Chief Revenue Officer (the one person in the organization who has a laser focus on creating net new revenues). One thing we know is that most agencies are "revenue challenged." They simply cannot create enough net new revenues to have an acceptable growth rate or an acceptable operating profit.
Speaking of profit, I think that through the soft market we've faced over the last seven or so years, most agencies have managed the heck out of their expenses. They've cut until they can't cut anymore without hurting their operation or losing good people. Therefore, now is the time to have a CRO who really understands that the agency has to get a better ROP—Return on Producers—(not to be confused with ROI or RIP).
A friend of mine once commented, "We have these carbon-based units that are pretending to be salespeople." There's absolutely no return on these dreaded, plateaued producers. They're the ones who reach $300,000 to $500,000 of gross commission income and then basically just quit. They Retire In Place. As we all know, RIPs stop growing.
These days, as rates generally are starting to creep higher, many producers are thinking, "Yahoo, the hard market is here!" But this approach to marketing will not work. Based on conversations I've had with various Sitkins International members and insurance company executives, I believe that the best accounts will still be competitively priced.
Sure, you may get an increase if the economy changes or if the sales for that company jump and drive up the cost of premiums. But if company sales remain flat, premium rates are likely to do the same. Further, I predict that the marginal accounts (the ones that are doing little or nothing to control their risk issues) will probably get hit hardest on the renewals. Therefore, I wouldn't put too much credence in relying on the return of the hard market as your marketing plan.
Something else to consider: If the only value your agency brings is price, you really have no value whatsoever! Unless you have a Value Proposition, you have nothing to differentiate your agency from the other agencies except price.
The performance bell curve
Studies show that there is a bell curve for salespeople, just like the one that measured academic performance when we were in school. When applied to salespeople from all industries (including agencies large and small), the bell curve shows:
• 16% are Low Performers
• 68% are Average Performers
• 16% are High Performers
With the under performers and top performers on either end of the curve and the average performers (the overwhelming majority) in the middle, the question is not whether or not to coach, but WHOM you should be coaching.
Coaching models will vary, but if you're using the bell curve, where should your coach invest his time to get a maximum Return on Time (ROT) as a sales leader or CRO? Should you try to take the low performers and make them average, take the average performers and make them high performers, or take the high performers and make them super stars?
A recent study examined this coaching dilemma and arrived at a conclusion that I've found to be true. It showed that even the best, most consistent coaching will have little or no impact on the performers on either end of the scale. The reality is that you can't coach everyone to a significant degree. There's just not enough time or ROT, so most of the coaching that's done is actually a waste of time.
Low performers are low for a reason. A bad hire rarely turns into a great hire! While it's possible they're the wrong person for the job, it's more likely that they simply don't have what it takes to do the job. Yet all too often we keep them, hoping for a miraculous transformation: that one day they'll show up and be completely changed!
The reality is that low performers must either be fired or moved to a new job. Fire them if they're draining resources because you'll never ever get them to where they need to be. If you know it and your gut knows it, you've got to pull the trigger.
Of course, it's possible that some low performers who aren't great producers might make great account executives. They might not be great "getters" of business, but they are great "keepers" of it. We see this all the time. One of our most effective models is where we position the account executive between the very high-end producer and the service person to manage the account on a day-to-day basis.
The high performers are already doing great. They were great long before you ever tried coaching them. You might see slight improvement after coaching, but it's hardly worth fighting that "racehorse." I've often said that if you have a thoroughbred, you've got to turn it loose and let it run. You might be holding the reins, but they're going to run on their own.
True champions want to win that race; they don't want to see anyone in front of them. Accordingly, you must support them. Just understand that you'll probably have to deal with their often unorthodox approach to doing business because high performers like to do things their way. They don't always stay within the lines or play by all the rules. But in the long run, it's probably worth it to accept them, quirks and all.
Motivating the average performer requires a little psychological probing. Assuming they are the right hire but are simply underperforming, it's necessary to get inside their head and find out what they really want out of life. Surprisingly, making more money isn't it. If money were really the motivator we assume it is, every producer would be bringing in millions of dollars a year in gross commission.
It's never about money, which is why the old "carrot and stick" approach just doesn't work with today's producers (and maybe it never did). Instead, we find that money is just a tool to get them what they want—a means to an end, not an end unto itself. So find out what financial freedom means to them and what they would do differently if they got better numbers.
That said, I'll repeat something I've preached countless times: You must first coach behaviors, not numbers. You might set goals for your closing ratio, conversion rate, average revenue per sale, gross commission income, net new income, etc., but then you must examine the behaviors needed to achieve those goals.
Sales numbers are simply the result of the combined behaviors of the producers. Great behaviors produce great results. Conversely, bad behaviors = bad results and average behaviors = average results. Find out from the producers what behaviors they need to change in order to improve their results.
The perfect coaching model
If our best ROT is to take our best average producers and start coaching them, what is the perfect coaching model?
• Annual Producer Planning Session. This is the first step towards getting better results. This session is not about numbers; it's about modifying behaviors, developing centers of influence, cultivating a pipeline and following a set selling process.
• Monthly One-on-One Accountability Sessions. This is not where a sales manager asks for numbers. Rather, using Reverse Performance Management, producers "report up" to the sales manager about what they did behaviorally that month and what results they got. We've found that having producers proactively account for their activity and sales is more effective than having a sales manager read a sales report and then ask questions.
• Weekly Check-Ins. Remember "The One Minute Manager" by Ken Blanchard? Similarly, this is a concept of "10-minute coaching," where sales managers meet weekly with each producer one-on-one for no more than 10 minutes. This brief check-in should focus on the basics: How are you doing? What happened last week? What do you have planned for this week? You'd be amazed at how quickly you can accomplish a lot when you concentrate on the foundational issues.
The bottom line
To answer the question, "To Coach or Not to Coach?" I urge you to keep your ROT in mind. First, "career adjust" your low performers either by promoting them to a position for which they're better suited or adjusting them out of your organization. Either way, do not keep them as low performers. If you do, your average will get lower, too.
Jack Welsh preferred getting rid of low performers when he was CEO of General Electric. In fact, he fired the bottom 10% of performers every year he was at the helm. Harsh but effective!
Also, support your high performers, provided their behavior is reasonable and tolerable. When producers are honest, ethical and doing $200,000 to $500,000 of new revenue per year, we can put up with their "stuff" for a while. They're the racehorses, so let them run. However, once their liabilities begin to outweigh their production value, forget it. Put them out to pasture!
Don't forget that your average performers need your time and energy. Joint calls are a must-do, not a "nice-to-do." You must get in the car and go on the road with them to see what's really happening.
Finally, if they are not worth coaching, they are not worth keeping. As always, it's your choice.
Roger Sitkins is founder and chairman of Sitkins International, a private client group and membership program for some of the top Independent Insurance agencies and brokerages in the United States, Canada, and Latin America. Members participate in training, advising and networking opportunities focused around innovation, sales, growth, profitability and value. Sitkins International is inventing the future of the independent insurance system by providing intellectual property that empowers agents and brokers to become the innovators.