My dealings with insurance companies over the years have led me to conclude that three big influences–egos, greed and ruts–affect many interactions. Advisors need to be aware of these factors when interacting with their own providers. Knowing what to look for can help make a decision about whether to continue negotiations or not.
Well look at each factor separately, but be aware that they often influence one another!
Egos: The ego of the chief executive officer is the most powerful force in the company. If ego works for the good of all parties connected to the company–policyholders, employees, agents and stockholders–everyone benefits. But if the ego is overblown and misdirected, everyone eventually suffers harm–ill-fated deals, lost opportunities, low morale and productivity, poor quality and worse.
How can you tell a good CEO from a bad one? One way is to observe whether he or she is a power maniac. If so, this person will have an attitude of: “Im in control. Regardless of what other people say, I know whats best for this company.” Over-inflated egos arent limited to CEOs, of course. Ive seen vice presidents and department heads afflicted with the same condition: “This is my turf and Im going to protect it at all costs.”
No one disputes that defending and protecting ones company is a noble pursuit. But such defenses need to be rationally grounded and judiciously implemented. The egotistical leaders care little for such constraints. Typically, they do not reason things out or consult others. The saying–fools are right in their own eyes while the wise listen to counsel–is lost upon them.
There is a great difference between a person who exudes self-confidence and has the skills to accomplish great things and a person whose overblown ego prevents staff from tackling problems realistically. The smart rep will work with the former and use great caution when dealing with the latter.
While you are at it, why not also take some time to examine your own leadership skills: Do you trust your people or do you know it all? The answer might help you correct problems and/or set your sights on greater success.
Greed: Greediness of the CEO is the second powerful influence that I have noticed. How can you detect such greed? Observe whether the CEO works for the welfare of policyholders, employees, agents, stockholders and then himself–in that order. If he or she does so, the person is probably a great CEO. But if the executive works in the opposite direction, looking out for his or her personal interests first, that spells trouble. Employees and agents receive little or no consideration from this type of CEO. The consumer is a footnote.
The good news is, I have encountered more good CEOs than bad ones.
The problem for insurance and financial advisors is that news media reports do not carry many items about the great CEOs. You find more reports about the really bad CEOs. But we can still use this information to help us in assessing our own company partners–by learning what went wrong in the poorly managed companies and why those companies failed and then seeing whether similar problems are going on at our own company partners. When I have made such assessments, I have noticed that the level of greed of the CEO and/or primary stockholder is often a key element in the success or failure of a company.
The greed problem is compounded when the person also is egocentric. Living in Dallas, Ive known or had the opportunity to observe some of the richest people in the world. Most of them are gracious, kind and benevolent to everyone. On the other hand, some have such extensive ego and greed problems that they have wreaked havoc on the lives and fortunes of countless numbers of people. My advice is, you and your clients will be much better off by dealing with leaders who are gracious, kind and benevolent–and by being that way yourself.
Ruts: Time after time, when Ive asked the home office of insurance companies why they do certain things, the most common response is, “Weve always done it that way, so why change?”
Like any thing else in life, ruts can be good or bad. As a child growing up on farm in west Texas, I remember my mother telling my father to “stay in the ruts” as we drove down a muddy road after a rainstorm, because if Daddy got out of the ruts, it was easy to get stuck in the mud. In short, some ruts provide a hard surface to continue our drive to a destination. On the other hand, if you never get out of the ruts, youll never take paths to new destinations that may hold unforeseen treasures. Its human nature to stay in the ruts. Its so much easier to not make any changes.
Where the insurance business is concerned, I cant think of one thing that cant be improved upon. This includes products, distribution methods, systems–anything. No company is going to address them all at one time. But as an advisor, you should find out whether your company partner has a regular policy of making improvements and bypassing ruts. This is a bellwether to future growth and business development. Also, ask yourself if you are stuck in a rut or open to new ideas.
In sum, if you intend to have a practice that grows and prospers, choose business partners that display realistic self-confidence, a desire for whats best for all and a willingness to change for the better. It is a balance in these qualities that you are seeking.
None of the above refers to current company financials or how the company has performed over time. This was by intent. In my opinion, if the rating agencies could figure out a way to rate companies based on egos, greed and ruts, we would have at least as accurate a measure of company viability as financial statements. Given enough time, a great CEO can solve financial problems. A greedy, egotistical, stuck-in-the-ruts CEO will make a company fail.
Editors note: A version of this article first appeared in the Sept. 2003 edition of Registered e-Report, an online publication of National Underwriter Life & Health.
, CLU, ChFC, is publisher of Fisher Annuity Index, Dallas. E-mail him at Danny@MrAnnuity.com.
Reproduced from National Underwriter Life & Health/Financial Services Edition, September 19, 2003. Copyright 2003 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.