Catherine recently attended a CIC Ruble seminar on Sales & Marketing. The instructors were all very good and their information was timely and useful. We thought we should highlight the great sales and marketing ideas for independent agencies that were covered in the seminar.

Downloading and On-line Certificates
Steve Anderson of The Anderson Network, is an automation guru, who is also great at using technology for sales and marketing. He is the executive editor of the newsletter called TAAR (aka The Anderson Agency Report) that covers all aspects of automation and technology for Insurance agencies. It can be found at www.TAAReport.com and costs $299 per year.

Steve noted that many agencies are not downloading the way they should especially with commercial lines. The Agents Council for Technology (ACT) has a listing of the capabilities of agency automation systems and carrier capabilities for upload/download interface with those systems. Their website is www.acttech.org.

If you are tired of the time and costs of issuing certificates, there are solutions for you. Several services offer on-line certificate processing where the insureds actually generate their own certificates. Templates are created that have the information locked in, such as coverages that cannot be changed by the client. Two such services can be found at www.confirmnet.com and www.CSR24.com.

Sales Leads for Producers
A major complaint we often hear is that many agency producers are just not getting the leads they need from the agency. A common problem is that these producers must generate their own leads and make their own cold calls. Aside from the time involved, they have poor results. There are many good lead generation sources today that can help producers, such as www.salesforce.com, www.infousa.com, www.datalister.com and www.selectory.com.

Producer Skills
It is also important for producers to be excited about the sales process. Sometimes, just a little extra focus by the producers on businesses related to things that are important to them will help them write new business. These online services can let the producer generate leads in their centers of influence, industries they know from family relationships, etc. Producers will then be more likely to relate to the prospects and know what types of exposures they have.

It was indicated that it is best to have each producer really focus on two niches. When they develop an expertise in a niche (i.e. write more than three risks), they will know how to best sell to this niche, what the pricing is, what markets like these risks, etc. Also, remember that people buy from people they like. So, if producers know the prospect’s “pain” and needs they will then relate well to them and should be able to have a great close ratio with these prospects.

The Society of CIC has a great three-week producer school held in various locations around the country. During the class the producers develop a game plan for writing new business and choose their two niches to focus on. The class will teach them how to create a game book that has all the materials they might need, which they can take into the field to assist with sales.

In this class the student/producers will get an experience of what it will be like to write new business, how to stay organized, etc. The Academy of CIC also has pure sales schools called “Dynamics of Selling.” Also, there is “Dynamics of Sales Management” program that has been developed for owners and sales managers. All of these programs are exceptional and would get your new and existing producers off to a great start. Go to the National Alliance at www.scic.com for more information.

The Society of CIC and Oak & Associates highly recommend that producers do a diagnostic appointment or interview via phone, before gathering information on prospects. This is a series of 12 questions related to the price, politics and product needed by customers and also uncovers their pain and needs. Without this initial piece done, producers have no idea if their proposal or quotation will be saleable.

Other Business Ideas
Jack Burke, from Sound Marketing recommended that agency owners schedule time to work “on” their business. He suggested that at least four hours a week should be actually scheduled to work on management items, new sales ideas, etc. He recommended a website called www.firstresearch.com for sales and marketing strategy development. Also www.zywave.com is an insurance industry focused service for more sales and marketing as well as client service products.

Jack stressed to make sure that your own agency website is very user friendly and not too cluttered. You want people to come to your site and easily maneuver around and then do what you want them to do, (i.e. either learn about the agency, its products, research background information, contact the agency, access their account or obtain a quote).

A great point Jack reminded the attendees is to always be good to employees. They are the ones that make your firm work, or not work. Oak & Associates recommends that owners be flexible with time off, listening to the needs and recommendations of employees, moving people up in the organization, rather than hiring new people and having great communication. These things will all set you apart from the rest.

Get Enlightened
Successful business owners know the importance of education and learning from others. Take a class or workshop at least twice a year, to hone your skills or discover new ideas, and expand your horizons.

About the Authors:

Bill Schoeffler and Catherine Oak are partners in the consulting firm, Oak & Associates, based in Northern California. The firm specializes in financial and management consulting for independent insurance agencies, including valuations, mergers acquisitions, clusters, sales and marketing planning as well as perpetuation planning. They can be reached at (707) 936-6565 or by e-mail at info@oakandassociates.com

Imagine that you are the head coach of an NFL team and you are in the playoffs. Your team is down by nine points in the beginning of the fourth quarter.  What is your next move? Will you be creative and come up with some new plays? Or, will you go to your playbook and use plays that match the situation?  Plays that your team has practiced and know how to execute.

Like a playbook is to a coach, a sales playbook can provide an outline of the tools and next steps for a salesperson. Playbooks can focus the sales effort, improve hit ratios, streamline the sales effort, help with producer development, and optimize overall sales performance. In other words, they help salespeople win.

Sales playbooks are a collection of the agency’s best sales processes and the tools required from finding prospects to closing the sale. A playbook is designed for repeatable selling situations. Since much of sales are repetitive, the playbook is designed to reinforce repeatable winning behavior.

Creating a sales playbook for niche or program sales is a great way to get started.  The focus can be on a specific industry – telecommunication firms, or a narrow target – retail shops in the downtown area.  Focusing in on a target niche helps limit the scope of the effort required to create the playbook.

Keep in mind that there is the added benefit of actually sitting down and thinking about and planning sales. Critical questions about the sales process, agency resources and the needs of the client will need to be explored and answered.  The development of a niche market sales playbook will also help the sales staff create an overall sales strategy for the agency and bring clarity to their own goals.  The niche playbook is a building block to an overall sales and marketing plan for the agency.

Building A Sales Playbook

First, start with a three ring binder.  Building a playbook will be a combination of written plans, descriptions, processes as well as lists, copies of forms, documents, sample marketing materials, etc.  It is intended to be an off the shelf reference book – one that is used on a regular basis.

There are five main sections to include in a niche market sales playbook: 1) Define the Niche, 2) Understand the Niche, 3) Evaluate Agency Resources, 4) Presentation of Products and Services, and 5) Sales Tools.  Combined, these sections will allow a producer to know who the target is, understand the targets needs, know the resources and products the agency has available and consolidate the tools required to communicate and work with prospects.

1) Define the Niche

So, who is the targeted group for the focused sales effort? The description should be as specific as possible. Use a page or two to describe industry, size, location, revenue, number of employees, etc. of the target niche for prospects.  Clarity of vision is important in knowing whom to focus on. Once that is done, a master suspect list can be purchased or created.  Refine the master list even further for likely suspects, to create an initial prospect list that can be contacted right away. This takes away the excuse of not having any leads.

2) Understand the Niche

This section allows for the casual observer to become well acquainted with the salient facts of the niche industry. Summarize the key issues for the industry.  Describe the competition in the marketplace.  What is the history of the industry? What are the strengths, weaknesses, opportunities and threats for this niche?

Drill down into insurance related issues. Describe and list unique underwriting requirements, loss control issues, and any other special insurance needs. Include in this section an industry-specific questionnaire or supplemental questionnaires.  List any unique marketing and sales issues that the companies might have.

It is important to be able to speak the language and understand the issues of the niche.  In this section create an industry-specific glossary of terms.  Include current articles on topics of interest. Make sure that there is a list of target-related associations, affiliations,

subcontractors, vendors, trade journals, etc.  Identify current insurance “pains” and gaps that might exist.

3) Evaluate Agency Resources

Now the target is well defined, but can the agency deliver a product or service to the client?  This section needs to be an honest self-analysis of the resources in the agency.

If there currently is one, describe the agency’s program. What are the current available markets for the niche?  Which ones, if any, should be added?  Are there any unique policies and coverages for the niche?  Does the agency have any specialized customer service or value-added services for the targeted niche?

Perform an assessment of the agency’s program for the niche.  Evaluate the strengths, weaknesses, and gaps. How does it compare to the competition? If possible, rate the program against perceived customers’ needs and expectations.  It is helpful to get as much outside opinions as possible.

4) Present Products and Services

The next steps are to clarify how the agency will communicate and promote the niche market program. Use one page to define the sales and marketing strategy –  How, What, When, Why, Who, etc.

Refine the words to highlight key features and the benefits of program into a 30-second elevator pitch that the producers can use.  Create industry-specific brochures and marketing materials for the program.  Very often these marketing materials can be created and paid for by the insurance companies, especially if this is a niche they are truly interested in expanding.

Include in this section all customized marketing letters and e-mails, newsletters, sales scripts, etc.  This will be a quick reference for the sales staff. Also, include a list of current clients in the niche and get testimonials from the key accounts.  This helps build credibility and can be an opening to a conversation with a prospect.

5) Sales Tools

The last section is for sales tools. Create an industry-specific pre-qualification questionnaire.  Develop a sample of typical questions and objections used by this niche and then create answers and solutions.  Another great tool are scripts for role-playing as well as for the service staff.  Include general marketing tools and other resources the sales staff can use, such as time management tools.  A list of action items and calendar for closure needs to be drafted.

Part of this process needs to be a way to analyze results and make adjustments.  A system needs to be developed to track what is working and what is not working.  This includes sales techniques, methods of contacting prospects, marketing materials, products and services offered, etc.

Evolve the Playbook

The sales playbook is not a static book.  It will need constant updating to current industry trends, news, issues, as well as prospect lists and current insurance products for the niche.  This is why tracking efforts and results is so critical.

Once the first niche book is created, it can become a template for other focused sales targets. The agency should have one master playbook for each niche.  Producers can then copy it to create a personalized version for their own use.

A final thought

Sales playbooks are the roadmap to access the best approach and techniques for the sales process.  It is a reference book, checklist and bag of tricks all in one three-ring binder. Developing and maintaining a sales playbook is perhaps more important than the end result itself. Producing it encourages you to ask critical questions about how you sell. What you discover during this process will make you a better sales organization.

Sales management is vitally important to the growth and survival of an agency. However, as important as it is, sales management does not have to be a full-time job in most firms.

Often the task falls to an owner or the top producer in the firm. This is not necessarily a good idea, because sales management can take away time from the manager’s own sales efforts. The key to effective sales management is to set up a system to monitor performance and encourage the producers.

Ideally, once an effective sales management system is created, self-motivated and properly trained producers can essentially “manage” themselves. The sales management role, in this hypothetical situation, is to monitor performance, remove any unreasonable obstacles to production and create an overall environment for sales.

However, producers are human too, and in reality, need guidance and support in order to succeed on a regular basis. A good sales management system creates a structure for the producers to succeed while minimizing the effort required by the sales manager.

Producer Performance
What is an acceptable level of producer performance for experienced, “seasoned” producers? It depends on a number of factors, such as:
• available producer support;
• sales skills of the producer;
• size and type of accounts in the geographic area;
• the competition and
• the local economy.

If performance standards are not set for producers, they will set their own—which most likely will be lower than what management expects.

Ideally, management can use the performance of the best producer who has ever worked for the firm as a guideline for “top” producer performance. The average property/casualty commissions per producer, from firms in our database, are in the range of $250,000 to $350,000. The range is based on size of firm, the location and the typical target clients of the agency. These commissions are not the producers’ book, but include “house” accounts and direct bill commissions of the firm, which are not necessarily commissions “handled.”

Well-run firms have $350,000 to $600,000 in commissions per producer. In surveys in which owners are asked what size book they would expect experienced producers to handle after three years in the firm, they report $150,000 to $300,000 in commissions handled, based on size of firm. In regard to their expectations for new business produced each year in addition to the books handled, the range is $30,000 to $65,000, based on size of firm. New business produced each year as a percentage of the book handled averages 18-20 percent.

For new producers without experience, approximately $100,000 in commissions handled is expected after three years, and new business of $25,000 to $40,000 in commissions per year. For new producers with experience (and without existing books of business) $150,000 to $200,000 in commissions handled is expected in three years, with $35,000 to $50,000 in new commissions produced per year.

Setting Producer Goals
Producers should be involved in the goal-setting process. Each year, every producer (including seasoned producers) should be given a new production requirement, for example 10-20 percent growth, net of attrition. The producer then should let management know how this production will be accomplished (for example, the number of quotes and customers that need to be written to accomplish his or her annual objective).

Based on the producer’s own hit ratio and size of account written, it should be determined whether or not the production goal is achievable. The goals should be broken down into monthly quote-to-write activity to make it easier to manage producer performance. Management actually needs two sales goals for each producer. One goal is the required new business increase in the number of accounts or commissions handled by the producer. The second goal should specify the type of account as well as the source of the new business to be pursued (such as account development, writing new accounts from referrals, target marketing or direct mail programs, etc.).

Sales Meetings
Effective sales meetings need to be held so sales activity can be properly monitored. Specific sales activity should include new business produced, lost business, hit ratio for each producer, prospect activity, what referrals have been obtained from new sales, etc. These meetings also should provide owner and non-owner production staff with information on markets, sales goals, collection problems and service backlogs.

There should be individual coaching of producers at least twice a month, in addition to the monthly sales meeting.

Producers have egos and need recognition. These sales meetings are also an excellent time to recognize superior performance, encourage double-teaming, and provide support by coaching and training.

Hit Ratios
Another sales management key is managing the producer’s hit ratio (the number of risks written to the number quoted). A hit ratio of 20 percent to 25 percent is average for commercial lines, but obviously the closer to 100 percent, the better. In personal lines, the hit ratio is usually 40 percent to 60 percent. If the hit ratio is improved, the firm’s expenses will be reduced greatly.

Hit ratios can be improved greatly when more time is spent initially qualifying the prospect. Key areas to uncover in the first critical 20-to 30-minute interview are: what is most important to the prospect in the insurance program; what are the politics, price and product the producer is competing against; and has the producer built a good rapport after this initial meeting, etc. Survey forms and collection of copies of existing policies should be completed in the second interview after the prospect has been properly qualified.

Producers can greatly improve their hit ratio on writing new accounts when they have good marketing/placement support. More and more firms today are using a central marketing person or department to help write new medium-size or large commercial accounts.

Sales management is critical
To have a successful, growing firm today in these difficult times, proper management of sales and producer performance is critical. Sales management can be easy if a system is established that monitors specific sales activity and performance. Effective sales management not only will reward the owners, now and in the future, but also will assist non-owner producers in achieving their goals.

About the Authors: 

Bill Schoeffler and Catherine Oak are partners in the consulting firm, Oak & Associates, based in Northern California. The firm specializes in financial and management consulting for independent insurance agencies, including valuations, mergers acquisitions, clusters, sales and marketing planning as well as perpetuation planning. They can be reached at (707) 936-6565 or by e-mail at info@oakandassociates.com

Accidents and mistakes will happen. However, we can create a system to minimize accidents and mistakes. It is also important to catch errors and correct them. Not only is the mistake corrected, but also it becomes a great learning experience.

The vast majority of E&O claims are the result of an error or a mistake. Typically, errors or mistakes are preventable. Some of the prime reasons errors or mistakes occur are due to lack of proper training, the lack of clear and adequate policies and procedures, inconsistency in performing tasks, being rushed and not completing tasks.

Some of the typical E&O claims made by clients and carriers include:
Ø Failure to place requested coverage or increase/update coverage
Ø Failure to recommend needed coverage or explain coverage limitations
Ø Clerical error on forms or misunderstanding of information
Ø A verbal extension of nonexistent coverage
Ø Failure to advise of cancellation, non-renewal, or material restrictions
Ø Failure to place coverage with a solvent insurer
Ø Failure to following underwriting guidelines or exceeding authority

Quality Control
There are four pillars to improve quality and prevent E&O issues. They are: 1) Training and Education, 2) Uniform Policies and Procedures, 3) Proper Documentation and 4) Performance Audits. All four of these approaches to improve quality must be in place or the system will be ineffective. There is no sense in having great polices and procedures, if there is no review of the performance and compliance through an audit.

Education and Training –Training for the technical aspects of insurance is important clearly required, however, training should also be done for computers/software, accounting, agency operations, customer service, as well as internal agency policies and procedures.

Uniform Policies and Procedures – Effective E&O prevention requires the agency to have written workflow procedures, as well as written policy standards for servicing accounts and writing business. An effective tool is the use of checklists, which should be used as much as possible. Many errors can be prevented by the use of a coverage checklist or a checklist for reviewing a policy.

Proper Documentation – Proper (and consistent) documentation can make the difference in an E&O claim. Notes should be put in a format that is not changeable, such as the agency’s automation system instead of Outlook. This increases the reliability of the documentation. The client should sign checklists and proposals as a means of recording their acknowledgement of the coverages available and what they are getting.

Performance Audits – The only way the system can be evaluated is if it is reviewed and tested. Each aspect of the system needs to be audited for compliance and accuracy. The feedback from an audit can then be used to improve workflow procedures, identify training needs and clarify policies or standards.

An outside E&O auditor should be used every three to five years. They can look at the agency from a dispassionate position and compare the results to industry standards. They are able to ask the tough questions and not worry about any “sacred cows” in the agency.

A second type of audit is an internal audit that should be done every six months. One employee should review another’s work and client files for accuracy and compliance. This approach will help keep the system in check between audits from an outside expert. This review also works great for training new employees. Employees need to be clear that the audit process is to evaluate the agency for E&O compliance and not rate their individual performance. However, corrections that arise from an audit could include additional training for specific employees.

• Management dumps information on the staff.
• The staff dumps problems on management.

What one should do with that information is rarely discussed and issues are not usually resolved during the meeting. Also, quantity does not replace quality, so a two-hour weekly meeting can be essentially useless.

The staff usually gets to talk only at the end of the meeting when management asks for comments. This ends up being dominated by people who like to talk about their problems. Management then takes their concerns under advisement and will supposedly report back later.

Here are some ideas on holding an effective staff meeting:

Keep a Regular Schedule – Meetings should be held on a regular basis and at a time that will not be a distraction. Usually early morning during the midweek is best. The meetings should last no longer than one hour.

Set an Agenda for Each Meeting – Spell out the key issues to be discussed. Send the agenda before the meeting, including copies of any supporting material, such as articles or action plans. Meetings are much more effective when all the attendees know what will be discussed. This allows time for everyone to reflect on the key issues and start to think how it will impact the agency and themselves.

Stick Tight to the Agenda – The biggest time waster in meetings is when new or side issues are brought up and the facts or objectives are not known. Defer these matters to the next meeting, or if urgent, handle after the meeting. If an employee has an issue they want to bring up, it should be added to the agenda. It is their responsibility to collect the facts and to perform the first analysis before the meeting. Any problem needs an initial solution at the same time from the employee, otherwise it should not be added to the agenda.

Thoroughly Discuss Topics – Don’t just provide headlines. When discussing news regarding the markets, regulations, customer service issues, etc., the staff needs to clearly understand the following: 1) what was happening in the past, 2) why is there a change, 2) who will be impacted by the change, 3) what is the plan for implementing the change, 4) who is responsible and 5) what is the timeframe.

Review the Big Picture – Share the vision and plans for the agency. Employees like to know that their efforts are going to a greater good. They need to see that there is an ultimate goal in mind and they are a part of the plan. Employees are more likely to do a better job when they know that they are needed and the direction they should take.

Exploit Employee Knowledge – Many times, the employee understands the issues better than the manager that makes the changes. Ask for their input.

Share Education – Employees that attend seminars, conventions and association meetings must provide the group the information gained with a summary of the event. This way the valuable information one person learned is now imparted on the rest of the staff.

Open Discussion Period – A short and limited time can be reserved for any accomplishments made or any lessons learned since the last meeting.

You might have heard the saying “Differentiate or Die.”

In the highly competitive world of insurance sales, the two primary ways insurance is sold is on relationships and price. To have long-term success in the marketplace you have to be unique and fill a special niche. What makes you more unique, more valuable, and more visible in the market?

To be as compelling or persuasive as possible requires that you know your agency’s USP – Unique Selling Proposition (or Position). This requires some hard soul-searching combined with a spark of creativity and insight. Charles Revlon, founder of Revlon, would say he sold hope, not makeup. Neiman Marcus sells luxury, while Wal-Mart sells bargains.

Step 1 – What are customers buying?
Too often, entrepreneurs fall in love with their product or service and forget that it is the customer’s needs, not their own, that they must satisfy. Make sure what you are offering is something that really matters to potential customers.

Take a good look at your book of business and compare it to what your clients are buying. If you don’t have what your customers need, your competitors will.

Step 2 – Why are Customers Buying it?
Know what motivates your customers’ behavior and buying decisions. Effective marketing requires you to be an amateur psychologist. Remember, price is never the only reason people buy. The answer might be high quality service, convenience of doing business, a firm’s rock solid reputation, etc.

Look at the criteria customers use to decide which product they will buy and from whom. Determine what is the “value” they are looking for when buying insurance. Brainstorm with everyone possible. Most importantly, talk to customers and prospects. Sometimes, the “real” reason a customer buys is not obvious, even to them.

Step 3 – Rank Yourself and Your Competitors By These Criteria
Next, identify your top competitors and rank them and your agency against the list generated in the previous step. Be honest in the assessment. Score yourself and each of your competitors on each of the values or needs. If possible, base your scores on objective data. Where you can’t, do your best to see things from a customer’s perspective and make your best guess.

Plot these points on a graph to see a differentiation of the strengths and weaknesses between you and your competitors. This helps uncover the real reasons why customers buy insurance from your agency instead of a competitor’s.

Step 4 – Solve An Industry “Pain” Or “Performance Gap”:
Think outside the box. Move beyond the basics that are common to what all other agencies provide. Identify which needs or “gaps” are going unfulfilled right now. This is sometimes termed a “performance gap.” Businesses can be very successful if they base their USP on a performance gap.

For example, Dominos Pizza USP of “Pizza delivered in 30 minutes or it’s free” helped them become wildly successful. When the kids are hungry and can’t wait an hour, the parents call Domino’s who delivered on their USP (and a pizza).

Step 5 – Define your USP
Once you’ve gone through this process, you need to take the next step. Start with a clean sheet and clear your mind of any preconceived ideas about your agency. This is time to be brutally honest. What is your USP and how can you position your business to highlight your USP?

Successful business ownership is not about having a unique product or service; it’s about making your product stand out – even in a market filled with the same thing. What is your competitive edge?

Step 6 – Condense Into One Clear and Concise Sentence:
When crafting your USP, it must be simple, believable and easy to communicate. Take all the details from the steps above and sculpt them into one clear and concise sentence with compelling salesmanship fused into every single word.

Federal Express (FedEx) dominated the package shipping industry with their famous USP: “Federal Express: When it absolutely, positively has to be there overnight.”

Step 7 – Be Specific and Offer Proof:
Consumers are skeptical of advertising claims companies make. Stop the objective before it starts. Answer their skepticism by being specific and offering proof when possible. Get testimonials about how great you are and why your customers are not just satisfied, but advocates.

Step 8 – Bullet Proof Your USP
Make sure you can defend your USP. You can be sure that, your competitors will do what ever they can to neutralize it. Your USP will also need to be updated on a regular basis. The core element does not need to change, but how it is presented should be revised from time-to-time. This way, your competitors will struggle to keep up.

Step 9 – Integrate Your USP Into Your Business:
Variations of your USP should be included in all your marketing materials such as your advertising, business cards, brochures, letterhead, website, etc. Make sure to work with producers so it is also part of their

When the plan is complete it should have:

• Employee and Catastrophe Team duties and responsibilities
• Emergency Response and Operation Procedures
• List of suppliers and vendors for backup equipment, repair services, insurance companies and organization to be contacted
• Maps of alternate routes to office, emergency office or rally point and offsite storage location

There are a lot of things to consider when developing a plan. First, what are assets and resources that the business must have to continue to function? Human resources are on the top of the list.  Second is the information that is collected and stored in various media. Third in the list is the actual equipment, furniture and facilities.

Next, a general assessment must be made of the most likely disaster scenarios. Situations such as floods, earthquakes, fires and storms are what usually come to mind.  We are now faced with energy blackouts and computer viruses. A disaster could also be the sudden death of key employees.

The impact on the business’s resources and assets by each of the probable disaster scenarios must be analyzed. A flood or a fire can destroy equipment and information assets, but less likely causes the loss of employees. An earthquake or storm can impact employees, equipment, facilities and possibly the information assets.

Problems such as blackouts and computer viruses have relative high probability and should have the most comprehensive plan. An earthquake or a fire is a lower probable risk and the problems they create are highly variable. Plans for these types of disasters need to be flexible and should contain less detail.

Also, some disasters will impact just the business, such as the loss of key employees or a fire, while a storm, flood or earthquake will have a wide impact. In the case of the former disasters, the business will have its typical workload, while the latter scenarios will mean a major increase in workload activity. Is the business prepared to handle ten or twenty times the calls with less staff and non-functioning equipment?

There are various sources that a business owner can tap to develop an effective disaster plan. A good place to start is with government organizations such as the Federal Emergency Management Administration (FEMA). There are also many private firms that offer advice and support. Some trade associations have planning guides as well.

Even if a formal written plan is not drafted, each business owner should still take the time to review and think about disaster preparation and recovery.  For the typical business a disaster plan often starts with one main thing — backing up data. Despite the daily vigilance of backing up the data, there are often a few cracks that can prove all the effort useless.

• Is the backup data stored offsite?
• Is there more than one person with access to the backup data?
• Has a successfully recovery of the backup data ever been tested?
• Does the business have immediate access to a computer that can be used to recover the data?
• Is the backup system tested after each major upgrading of the system?

What steps will the business take in the case of a blackout or computer virus? Hardcopies of client names and numbers should be available, so that some business can still be handled. Non-computer work can still be done in the absence of a working electronic database.

Many businesses still have much their client’s information stored in paper files.  What is being done to protect these files? Does the business have fireproof files and are they closed every night?

Determine how clients and vendors can contact the business after the disaster. Today with the Internet and easy access to offsite voicemail, this problem has been mitigated. The real issue is informing every one of the contact alternatives.

Without the staff in place, there would be no work done. Management needs to make sure that each employee follows the business’s workflow procedure so that there is consistency from desk to desk. That way if one employee dies or even quits suddenly, another employee can pick up where the former employee left off with little interruption.

It is also important that management discuss with the employees what they should do during major disasters such as storms and earthquakes. Who should they contact and is there an offsite meeting place. What should the business do to contact the employee’s family if the disaster strikes during work?

Finally, the business must have the proper insurance in place. Review the current coverage for gaps.  Check out the availability of business interruption coverage.

Summary

Humans are usually motivated into action only when faced with an actual event or significant threat. Needless to say it is better to be proactive rather than reactive. A business owner spends much of their lives building up their business; it only makes sense to spend some time developing a plan to recover from a possible disaster. 

When it is boiled it down, all that a service business does is collect and transmit information. In other words, communication is what an agency produces and sells. So why is it that many services business have problems with communication?

When we perform a Management and organizational or Operational review for our clients, the biggest complaint we hear from the employees is that there is a lack of communication within the business. Vendors and businesses both complain that each other fails to properly communicate.

Communication within a business takes many forms. Just as an business owner will have a plan for their business goals, they should have a plan for their communication goals. It is a good idea to write down how the business will internally communicate all the information that is needed to be distributed. Each business will have their own set of rules and regulations regarding what to communicate and how it should be done.

Information will have various degrees of importance and urgency. An important item might not be urgent and likewise an urgent item might not be important. Also, some issues are easily understood and others will take time to understand, resolve and implement.

Keep the Lines Open
Management and staff should match the proper mode of communication with the information that needs to be sent in order to maximize impact. For example, articles or bulletins are best circulated on a routing slip throughout the office. A short notice of importance should be e-mailed to everyone. Information for an individual should be handled in private.

Overall staff, department or management meetings should be used to cover the current key issues impacting the agency or department. These meetings tend to be the main channel of communication between management and staff for most agencies. It should, however, be just one of the many arrows in the communication quiver.

Why Staff Meetings Fail
When we tell an business owner or manager that the staff believes that there is a lack of communication they often gawk and point to the fact they have weekly staff meetings that last one to two hours. Unfortunately, quantity does not replace quality.

Staff meetings can often end up being a dumping session. Management dumps information on the staff and the staff dumps problems on management. What to do with that information is rarely discussed and issues are not usually resolved during the meeting.

The valuable information disclosed in staff meetings is often only through one way communication. The staff is told what the vendors are doing or what new program management is focusing on. This is important information and needs to be disseminated and properly discussed. Management, however, provides the staff only with the “headlines” and does not work with the staff on how this will impact them.

The staff usually gets to talk at the end of the meeting when management asks if there are any questions or comments. Typically, this ends up being dominated by the same people who like to talk about their problems. Management then takes their concerns under advisement and will supposedly report back later. Employees need to be pro-active throughout the communication process and management needs to establish and live up to high communication standards.

Effective Meetings
The first step in setting up an effective staff meeting is to set an agenda for each meeting. Meetings should be held on a regular basis and at a time that will not be a distraction. Usually early morning during the midweek is best. The meetings should last no longer than one hour.

The agenda needs spell out the key issues to be discussed including input from the staff. Everyone should see the agenda before the meeting, including copies of any supporting material, such as articles or action plans. The purpose of posting the topics before the meeting is to allow time for everyone to reflect on the key issues and start to think how it will impact the agency and themselves.

Typically, when brand new information is brought up in a staff meeting, the employees think of the impact after the meeting and they feel that since their opinion was not heard it does not seem to matter. This is the nucleus of the feelings that employees have about the lack of communication in the business.

Employees resent when management makes changes are made that affect them, yet they were not consulted. Many times, the employee understands the issues better than the manager that makes the changes. Exploit the knowledge of the employees.

Management and staff both need to be prepared prior to the meeting to discuss the key issues. Meetings are much more effective when all the attendees know what will be discussed and what the goals are for that meeting. The biggest time waster in meetings is when new or side issues are brought up and the facts or objectives are not known.

When management has news regarding the markets, regulations, customer service issues, etc., they need to clearly understand the following before the meeting: 1) what was happening in the past, 2) why is there a change, 2) who will be impacted by the change, 3) what is the plan for implementing the change, who is responsible and what is the timeframe.

If an employee has an issue they want to bring up, it should be added to the agenda. It is their responsibility to collect the facts and to perform the first analysis before the meeting. Any problem needs an initial solution at the same time from the employee, otherwise it should not be added to the agenda.

The standard format for discussing each issue should include the introduction, time for discussion and an agreement on what the next step will be. If the problem needs more than a few minutes to resolve, then an individual or committee needs to be appointed with a date scheduled to report back.

All employees that attend seminars, conventions and association meetings must provide the group that would benefit from the information, a summary of the event. This way the valuable information one person learned is now imparted on the rest of the staff.

The open discussion period in a meeting should be short and limited to any accomplishments made or any lessons learned since the last meeting. Problems not on the agenda should be deferred to the next meeting, until the proper procedure is followed.

If the business is large enough, separate staff meetings should be held by each department. Issues and problems unique to any department should be addressed by that department’s meeting rather then the general staff meeting. The frequency of general staff meetings should be reduced if department meetings are held.

The Forest and the Trees
Let everyone know the big picture. Management needs to circulate the agency business plan and the sales and marketing goals. A separate meeting or retreat at least once a year should be held to review these plans and discuss the current status of the agency, where it is going and how it will get there.

Employees like to know that their efforts are going to a greater good. They need to see that there is an ultimate goal in mind and they are a part of the plan. Employees are more likely to do a better job when they know that they are needed and the direction they should take.

Knowing the big picture also helps define the little pictures. Business goals need to be based on reasonable and attainable goals of the individuals of that agency. The staff needs to know what management expects from them. The employee, however, should also set his or her own goals, otherwise it is management’s goals not the employee’s goals.

Individual goals, progress and shortfalls should be discussed in private at least twice a year. The annual review is the time when the goals are set, but a mid year check-up is needed to keep the employee on track and management in the loop. The employee should understand that they should bring up any problems that are impacting their performance immediately and not wait until review time.

Communication Rule
Each agency should have the following basic rule regarding communication. Each person is responsible for the proper, timely and efficient transfer of his or her communication. The staff is not off the hook because they were afraid to talk to management or that their issues did not matter. Management is not excused because they did not have the time to listen to staff, properly analyze the issue or provide resolution to a problem. Management needs to have an open door policy to hear what the employees have to say.

Conclusion
In Dale Carnegie’s book “How to Win Friends and Influence People” he shows how it is important to “win people to your way of thinking.” Don’t force your ideas on others. Let them do most of the talking and let them think it is their idea. In other words, the key to being a good manager is to be a master communicator.

Your kids will learn the…

Secrets of Savings
Basics of Budgeting
Dangers of Debt
Ins & Outs of Investing
Goodness of Giving
…and have a whole lot of fun, too!

1.     Have the family member work somewhere else first.

2.     Do not expect more or less of them than you would of any other employees.

3.     Do not create a job for a family member.

4.     Keep family and business issues separate.

5.     Keep open lines of communication

6.     Never leave the business to two people (family members or not) on the basis of 50/50 ownership.

7.     If possible, develop an organizational chart that has family members reporting to people other than you or other family employees.

8.     Create a board of directors that includes non-family members.

9.     Make family members pay for ownership, even if it is at a discount.

10.  Make sure all participating family members agree to these guidelines.