New Year’s Resolutions…

My car’s headlights showed a wild blizzard of flying snow ahead of us. We slithered sideways turning the corner, and I spun the wheel in the opposite direction to straighten up. A car going the other way hooted its horn angrily then quickly disappeared into the wall of darkness behind. “Whoopsie, Dave!” my boss Fred chirped. “Aren’t you glad you’re driving a company car, eh?”

It was the first week in January, and my boss and I were slogging through winter’s first blizzard to our annual “boys’ night out”. This was a free-wheeling evening of cards, darts, indoor putting contests and pool for a group of independent brokers, insurance company people and others. This time, the event was being held at the home of our longtime broker friend, Bob Davies. He was co-owner of a successful midtown brokerage which had represented our firm for more years than I could remember.

My boss Fred Wilson was the manager of our downtown branch office, and as the company’s senior marketing representative I knew virtually all the participants in tonight’s cheerful event on a first name basis. With us in the car was broker Larry, whose suburban office provided us with a nice volume of commercial and personal business. Not even tonight’s gale-force winds and arctic conditions could have kept us away, and as we turned a last corner the street lights showed us several other cars already huddled outside Bob’s home. We clumped our way in, and were soon in Bob’s large recreation room with a dozen other industry types sprawled around the blazing fireplace. Greetings were exchanged, drinks appeared, and we settled in for some socializing before the games began.

“Well, here we go into another year,” Fred said cheerfully as we plumped down on a couch. “Is everyone happy with that prospect?” Bob Davies came over carrying two drinks for us. “Well, it certainly beats the alternative,” he said with a smile. “I’m sure your company’s operational plan is all squared away nicely. Now all you have to do is hit all those big target numbers and reach your strategic goals.”

“We’ll give it our best shot!” I answered, “but I’d be willing to bet that a lot of you use the start of a new year to check out your own operations and to make any changes that are needed.” That brought a nod from Al, a broker I knew well. His operation was in a small town 160 kilometers from the city, and I knew from calling on him that it was a very efficient one indeed. “Yes, Dave, that’s exactly what I do at this time of year. I call it ‘taking inventory’. There’s usually a short lull after Christmas and the New Year before our business cranks up to normal speed. I use this time for my own internal assessments. In other words I take stock of how my operation performed over the past year.”

Beside me, my boss Fred popped a quick question. “What sort of ground do you cover in your inventory, Al?” Al set down his drink and held up two fingers of one hand. “Two main areas: my staff and my administration. On the staff issue my inventory runs down a checklist of questions. Is my staff training keeping up to the demands made of them? Did they get to enough training programs during the past year? Are they adequately cross-trained? Are any of them ready to move up to new responsibilities? Did any areas of unnecessary stress keep showing up – and if so, why?” He paused for a second, gathering his thoughts, then continued. “As for administration, I ask myself what problems showed up most often in the office. Were they caused by outside sources, or by ourselves? This often means that I spend quite a few hours reviewing all the minutes of last year’s staff meetings. These notes can be invaluable in pinpointing trouble that crops up again and again.”

“Helluva good idea to keep notes of staff meetings, Al!” The voice came from Don, a city broker I knew but who did not represent our company. “We tend to hear out problems as they occur at our staff meetings and we try to solve them on the spot. Trouble is, we don’t keep a record of them, and we probably should.” That brought a quick grunt from Larry, who was standing by the fireplace. “I agree with you, Don. We used to have a staff meeting only when we felt we needed one. Then we suddenly ran into a major blow-up in our office between two people who didn’t see eye-to-eye. It’s the sort of situation I should have seen coming. The issue could have been raised and resolved at a staff meeting. But because there was no chance to talk out their differences they just simmered until it all blew up in our faces.”

Fred nodded sympathetically. “Staff meetings can be tiresome because people sometimes use them to let off steam. But that is also their great value. They’re an escape valve where you get an opportunity to air your grievances with a chance they’ll be resolved.” Al leaned forward as my boss finished talking. “There’s another huge advantage to regular staff meetings, in my experience. When you ask your people for their input and ideas on everything from work stations to lighting, or software or hardware, you give them a sense of control. They feel they’re part of the decision-making process, not just cogs in the big machine. To my way of thinking that’s a big stress-reliever.”

I took a quick swig of my drink, then another thought occurred to me. “What about the hard costs of doing business, of running your agencies? Do any of you use this time of year to look at these?” Broker Don nodded. “I do, Dave. It’s precisely because it’s a little quieter at the turn of the year that I use this time to do a review of our fixed cost structure from top to bottom. Are our office rental costs likely to increase, and by how much? How about phone costs, both landline and portables? Are we getting the best possible price breaks?” He looked around at us. “Competition is so fierce now in that business there’s almost a new package of phone services being offered every week. Trouble is, the service providers don’t always tell you of the latest bundles they’re offering. You have to call them to find out. But it can be well worthwhile doing that. Last year at this time I was able to cut my combined landline and cell phone costs by about 15%.”

“Speaking of income and expenses, guys.” It was broker Larry who was speaking. “Look’s as if we’re going to lose our contingent profit commissions following those Canadian and U.S. studies. The question is, how did you handle that extra income? Did you add it to general revenue, spread it among your staff, or just keep it for your own account? Whatever you did with it, you’ll have to come to grips with the expectation that it’s probably not going to be around for much longer.”

Bob Davies brought some fresh bowls of munchies over to our table, and spoke up as he did. “I think you’re right, Larry. I have a feeling that a lot of companies will feel the pressure to drop contingents. But like you Don, my partner and I use the start of the year to look at every item in our budget, from car and equipment leases to staff compensation. It’s so easy to just roll ahead into the year and forget about all those fixed expenses. But, my partner and I make it a personal challenge to find at least one decent cost-saving each in our budget review. We’ve never failed yet.”

“You two are good at what you do,” Fred said admiringly. But, Bob Davies was holding up one finger to let us know he had more to say. “Thanks, Fred. But let me add another thought here. Every three years my partner and I drag out our partnership agreement for a mid-winter check and overhaul. As we all know, partnership is a lot like marriage. You’re going to spend a lot of time together so you have to have a good understanding of each other’s roles, and you have to trust each other. If your agreement was put together some years ago, it might need some updating or repairs. For example, the provisions for valuing an outgoing partner’s share on retirement might need to be updated. And it’s always a good idea to run through the details of your partnership agreement to make sure there’s a fair balance of duties. Why? Becau
se as the business grows and develops, some duties become more time-consuming and critical than others and one partner could wind up with a much heavier load. The goal, as I see it, is to make sure that no matter what conflicts you and your partner may run into, the inherent value of your business stays intact.”

Larry smiled at him. “Sounds like good advice to me, Bob. My senior office manager and I tackle something along the same lines: a full staff review. We assess salaries, benefits and incentives every year at this time. There are usually normal increases of course, but we also look to see if our incentives shouldn’t be tweaked a little. We belong to an informal brokers’ group and we compare notes with other brokers our size to see if they’re doing anything new or different in staff compensation, incentives or bonuses. If someone comes up with an idea that seems to work, we’ll give it a try.”

I could see broker Don nodding his head in agreement. “That makes sense, Larry. What also makes sense to me is taking a long hard look at your present marketing plan, if you have one. Is your ratio of personal business to commercial where you want it to be? If not, how are you going to go about changing it? And more importantly, what do you have to do now to get to where you want to be a year from today? Our market’s changing, there are new players on the scene, and ‘standing pat’ doing things the way you’ve always done them, is not a sensible option.”

Standing beside my chair was another broker who hadn’t spoken yet, but now he did. “You’ve all made some good points, guys,” he said. “But now let me put another question to you. Around this time of year, how many of you have been approached by one of the major insurers, tempting you with big, juicy overrides if you’ll roll over a portfolio to them?” He paused to let that sink in, then shook his head. “There could be a nice payoff for you if you do, but surely you have to give it the basic acid test: would switching companies be in the best interests of your customers?”

As he finished speaking, Al responded. “Can’t disagree with you,” he said forcefully. I’ve told more than one company that I won’t agree to the switch pitch because the real beneficiaries are usually you, and the company you’re switching to – not your customers. And speaking of clients, let me tell you one other thing I do at this time of year. I do an inventory of my customer service. You know, it’s easy to get all hung up on business processing, on workflows and internal staffing problems, but I try to keep reminding myself of the people who ultimately pay all my bills, and all the company bills too.” He let that thought sink in, then continued. “If there’s one important truism in our business it’s this: it’s a lot cheaper to work hard at keeping an existing customer than finding new ones. With that in mind I try to get the email address of my customers, and at the start of a new year I send them an email thanking them for their business, and asking them to get in touch with me if I can do anything more for them. For those not on email, I send them a short letter that says the same thing. I sign each one personally, and for those I know well, I add a short personal note.” He shook his head gently and smiled. “You know, it always amazes me how this small gesture is appreciated. And I’m often surprised at the new business that comes in – just because we kept in touch.”

At this point Bob Davies and son carried in plates of hot food and in short order we were sitting around a huge circular table, tucking into steaks and ribs with all the trimmings. It was Al who spoke up next. “Now that we’re all taking aboard some heavy duty cholesterol, let me tell you what I also make sure I do at this time of year…”

“What’s that, Al?” I said quickly. “Keep plenty of soda bicarbonate on hand?” Al smiled at me. “What I do is set out a program for my fitness and health for the year ahead.” He set down his fork. “It’s my experience that too many of us do the business bit very well. We study, we work hard, we make a good living. But we neglect the one huge asset we all have – our health. We should all get at least thirty minutes of good exercise every day, even a good brisk walk in the evening is better than nothing. Riding around in a golf cart once a week at the club doesn’t do much for your fitness level.”

That brought a grunt of agreement from my boss Fred. “Absolutely right, Al. As some of you know, our company introduced a ‘fitness first policy’ a year ago. We hired professional trainers from one of the national fitness clubs to come to our head-office and to our branch-offices to teach us the simple facts about keeping healthier through better diet and regular exercise. It was an instant success.”

“And the good news is that the number of sick days staff took in our branch office went down immediately,” I added. “When people began to exercise more often, it seems they also kept healthier.” Fred jumped into the conversation, “and just as important, it seems to improve the stress level in the office. Fact is, healthier people seem to cope with daily work pressure a lot better.” As Fred finished speaking, Bob Davies walked to the center of the recreation room with a large collection of golf putters in his hands. He looked around and gave us a large smile. “Gentlemen, speaking of pressure, it’s now time for you to feel some. The shop talk is over, it’s time to prove yourselves in our annual contests of skill.” He handed a club and a golf ball to each of us, and pointed to the miniature putting course he and his son had created across the floor of the recreation room.

“Let the games begin.”