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The Innovative Workplace

An analytical approach to managing change

In a fast-paced business environment, change is not optional

By Don Phin

"Only mediocrity is sure of itself."– Paulo Coelho

Recently I gave the team members and clients of an industry process outsourcing business a six-hour workshop on managing change in their organizations. Here are some of the main pointers I shared, adapted for a wider agent audience.

Where do we need to change?

There are three main areas where agencies are adapting to change:

1. Ever-evolving sales and marketing approaches. For example, much of the industry has been built around referrals from strong relationships. While that remains an important source of business, there's plenty of reason to believe we have to adopt social media strategies and improve our Web presence in order to survive down the road.

2. Another dramatic change is the shift from being brokers selling a product based on market or price to becoming experts around risk management and benefits information. This is a fundamental shift that requires greater education and expertise, but also an understanding of how to take a consultative as opposed to a sales approach to a problem. One of the books I recommend to anyone making this transition is The Million-Dollar Consultant by Alan Weiss.

3. The next area has to do with efficiently running our organizations and outsourcing as much of what we do as possible. As Peter Drucker said: Focus on your growth activities, outsource your administrative ones, and eliminate the wasteful ones. To what degree do you outsource activities such as payroll and benefits administration, processing work, underwriting, and other aspects of the business? There are plenty of experts who will tell us we should outsource everything we do except for sales and marketing. Even then, it makes sense to outsource some of that if we're not going to do it well.

Clarity is required during change

What type of agency, broker, or administrator do you want to be moving forward? To whom do you want to sell your services that you are not selling to today? What coverages and services do you want to sell them? How will you use new technologies to market to them? How will you distinguish yourself? What value-added services will you bring them? Who will be "on the bus" with you to go after and support this business?

While it is important to plan for where you want to go and then work towards that plan, it is imperative that we remain flexible to the circumstances before us.

What has to change?

Once we're clear about the direction we are heading, then we must determine what will have to change in order to get there. Perhaps the greatest change required is where you stop doing things. While I was visiting a friend, he used a very powerful metaphor with me. "Don," he said, "you are always trying to do so many things. I want you to put this ball on your hand." He placed a five-pound exercise ball there. Then he picked up another one and asked me to put that in my hand too. When I said, "I can't," he said, "Exactly!" It has been a constant reminder to me that before I can do anything new and wonderful I have to stop doing something. Hopefully something uncool and unprofitable! To help you gain some clarity, send me an e-mail to and I'll send you a copy of the Vision, Mission, Goals, Values worksheet along with some other cool tools.

Managing through never-ending change

Ask employees what is the most important things they are expected to do every day and see how well you've communicated your change expectations to them. Chances are, their list will not match yours, which means better communication is required. Then ask them how they would know if they were doing these things well from a quantitative and qualitative standpoint, without their having to ask you or without your having to tell them. Then you have a firm grip on what performance should be.

I encourage you to generate ongoing 90-day game plans and update them every 30 days. It's ridiculous to think you can plan a year out today. I'd also make sure that you have a process to generate a constant feedback loop. At my office everyone produces a "To Get Done" list that we share at the beginning of the week. At the end of the week, the reports let me know what they got done and, most important, what they didn't get done and why. (Now this process is managed in the Small Improvements program.) It doesn't make any sense for me to advise them in November that they weren't meeting my performance expectations in February. The best time to deal with a performance problem is right now.

We have to play team during times of change

None of us is as smart as all of us. As we go through this constant change, we have to generate a dialogue that helps us understand how to best support one another. Think in terms of your collective I.Q. For example, examine the three most important things the brokers are focused on in the next 90 days. How can the account managers and administrative staff support them in those efforts? It cuts the other way too. What are the administrative staff's critical 90-day objectives and how can the brokers and account managers assist them? And so on. Go through that exercise and generate standard operating procedures, training, and orientation tools around it. Send me that e-mail and I'll also send you a link to a five-minute video I did on a great team-building exercise.

Ratcheting up the heat of excellence

Any time I help a company go through change management efforts and ratchet up expectations, I notice a strange phenomenon—many a poor performer will leave without your having to fire them. These employees don't want to go through the effort or don't want to be found out, so they leave for the comfort zone of the competition. You also have to be concerned about the employees who are doing a great job of adopting change as they become very attractive to the marketplace. The last thing you want to do is lose your top-performing change agents to the competition! Make sure to focus on showing these people you care about them. Give them lots of pats on the back, incentives, rewards, and other forms of praise.

If some employees quit, would you be relieved? This is a question I constantly ask business owners about difficult employees. If the answer is "yes" then why are they still there? The only semi-logical response I ever hear for being upset is that the agency hasn't properly documented the employee's poor performance and there are no replacements for them available. I don't know about you, but I'd rather simply not do something than do it with someone who tortures me by a thousand cuts each day. Life is simply too short to have it consumed by these people. The point is this: Get any emotional blockages out of the way about letting go of poor performers. If you don't, you are doing a disservice to the other 80%-90% who support your change efforts and bring it to work every day.

Make sure you've thought through the math of the change

Whether the change is a new sales approach, the offshoring of operations, or the adding of value services, make sure you run the numbers of it. What additional costs, time, and energy will be required to execute your change efforts and what benefits do you expect in return? When you study the numbers, what stands out as the greatest opportunities? For example, while agencies are typically sales cultures focused on revenue, a dollar saved in operational expenses is worth at least four dollars in equivalent revenue. If the change efforts produce business growth as expected, are you prepared to staff for that growth? Will you find yourself growing past available cash flow? Remember, as Dr. Deming would tell us, the whole idea behind a change effort is the optimization of your existing resources.


One survey measuring employees' reaction to change found that the most common emotional responses were frustration (57%) followed by dislike (12%), skepticism (7%), and anxiety (5%). The entire notion of agency management as some kind of comfort zone is gone today. Change isn't for the timid or emotionally weak. It's only for those who have decided they will do what is required to survive and prosper. It's possible to react to and be pushed around by change on the outside, but, inevitably, it's an inside-out job. You have to be the change that you want to effect; otherwise you create an incredible dissonance in and around you.

The author

Don Phin is president of the Employer Advisors Network, Inc., and the author of the "HR That Works" series of compliance and management products. He is the editor of "Employment Practices Liability Consultant" (EPLiC) published by IRMI. He can be contacted at or at


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