Canadian Underwriter

Master Class

October 3, 2011   by Terri Goveia

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There’s no obvious connection between Steven Wagler and Starbucks chairman Howard Schultz. One sells insurance; the other, premium coffee. One oversees 50 employees at his southwestern Ontario brokerages, while the other presides over more than 100,000 global baristas and corporate workers.

But there are parallels between the company that changed the way North Americans drink coffee—a tall soy no whip latte anyone?—and insurance brokers of all sizes. With both facing challenging market conditions and fierce competition, the java giant offers lessons in change management and a model for any business trying to stay ahead of the game, according to a new program aimed at raising the bar for Ontario insurance brokers.

Rebranding. Rethinking business. Haven’t brokers been here before? They have, but a shifting competitive landscape, the move toward a 24-hour sales cycle and research that shows brokers losing market share in personal lines makes evolution non-negotiable, says Lucy Arkell, education manager for the Insurance Brokers Association of Ontario (IBAO).

The association’s Beyond Best in Class program won’t vanquish new challenges, but it gives brokers the chance to step back from their businesses to regroup and consider how to plot the way forward on key issues like branding, the larger market and meeting the 21st century customer. “Things are changing and we need to do something to make sure we’re focusing on growth,” says Arkell, who developed the five-day program with consultants at Navicom Inc.

Wagler, a partner at Josselin Insurance Brokers Ltd. in Kitchener, Ontario, joined five other brokers for the program’s first workshop in April. Canadian Insurance Top Broker will follow him and fellow participant James Chmiel in their efforts to change the game.

Rethinking Engagement: Josselin Insurance

Although Wagler didn’t head into the program with specific business issues in mind, the first phase—which had brokers examine high profile corporate models, work on fictitious brokerage case studies and highlight their own real-world challenges—gave him a chance to revisit a key part of his business strategy.

Almost two years ago, he unveiled a plan to help his brokerage distinguish itself from local counterparts. But day-to-day operations made it hard to take time to put the plan in motion. “We started on the path, and got swallowed up by operations,” he says, calling the pilot “a catalyst to move some things forward.”

It also prompted a look at gaps in the brokerage’s formal strategy—and the chance to develop one for human resources. “That’s what we’re weakest at in all of it and I don’t think we’re alone,” he says of brokers’ tendencies to focus on operations.

To that end, the broker plans to “check the temperature” of the office culture with an online employee survey, and with that, help the brokerage make incremental changes with everyone in the loop. “It’s hard to ask people to think of change, without us fully considering how we can free up some time,” he says. “We have to be cognizant of the fact that if a desk is full, we can’t add anything to it.”

Putting the firm’s people at the centre of any change recognizes how crucial they are to the business and any future transformation, he says. “It’s got to resonate with our people before it can ever resonate with our clients.”

Added to the transformation plans: a scaled-up mindset. “We have 50 employees,” Wagler says. “We’re a small enterprise, but we can’t operate like a small enterprise anymore.” And although the program used several high-profile corporations, like Apple and FedEx as examples, the Starbucks model resonates for him.

“If you think it’s all about selling a cup of coffee, it’s not,” he points out. “If all we do as insurance brokers is sell an insurance policy, we’re going to lose the war. We may win some battles, but we’ll lose the war.”

Mission Possible: Erb and Erb Insurance

Broker James Chmiel runs an insurance brokerage in the same region as Wagler. And while brokers look to each other for business ideas, the Kitchener-based president of Erb and Erb Insurance Brokers Ltd. says the program’s advice to look outside the industry is timely.

“Look at the top five or 10 companies in Forbes,” he says. “Those are the ones you can take tips from.”

For him, the program emphasized the value of his brokerage’s mission statement. When asked to recite their own statement, many participants didn’t know them by heart, he said. “It’s not something you just look at. When things happen you need something that will help you steer back on course.”

Chmiel plans to reemphasize the mission and guiding principles with his employees and even his clients, as a way of involving everyone in the firm’s core values. He also wants to strengthen the firm’s community ties by emphasizing some of its strengths—like its green initiatives—and bring in consultants for client service workshops.

On the nuts and bolts front, he plans to create a more “active” renewal process, and bump up the brokerage’s web presence.

The workshop has helped recalibrate some of the firm’s goals and ongoing efforts, he says, adding that after the first session, “you took what was going to work in your shop, with your people. [You know] what you need to work on and how to build your own checklist.”

Going Forward: 24-7

Both Wagler and Chmiel face similar challenges going forward. The 24-7 culture that keeps other industries humming through online outlets is pressing up against their—and other—brokerages. Extended web reach isn’t impossible for brokers from a cost perspective, but other roadblocks can get in the way, Wagler says. “It’s not like it’s untouchable. It’s just having the resources available to get it done.”

First session discussions among all pilot participants showed that it could be done with creative staffing models—late starts for some staffers could mean extended hours at the other end. “It might seem monumental to make some changes, but it isn’t,” points out Arkell. “People are flexible.”

Both online and in person, brokers must work to make the transaction about more than insurance—the same way Starbucks has forged a connection with its consumers over the way they sell coffee, rather than the beverage itself, both brokers agree.

We need to be more deliberate about what we’re doing to make that emotional connection stick,” Wagler says. “We have an emotional product. We just have to turn it on.”

Chmiel doesn’t drink Starbucks coffee—he thinks it’s kind of expensive—but these days, he’ll give the coffee giant credit where credit is due: “Part of it is the environment–you want to walk in, and be engaged and be part of it,” he says. “It’s up to us to create that same experience.”


Raising the bar

What: IBAO’s Beyond Best in Class Program

Cost: In the $3500 range per participant, although Arkell says insurer sponsorship will likely have brokers and companies sharing the cost.

When: The pilot phase’s second session runs in September 2011, with a new workshop starting in 2012.


Copyright 2011 Rogers Publishing Ltd. This article first appeared in the June 2011 edition of Canadian Insurance Top Broker magazine.

This story was originally published by Canadian Insurance Top Broker.