How To Identify The Next Leader of Your Agency

Identifying the best candidate(s) to be the next leader of your agency through perpetuation is a critical decision when it comes to succeeding in allowing the agency to continue operations long after the original principal(s) has/have left. 

Download our Free Report “Agency Perpetuation: What You Need To Know Before You Sell”

Mindset:  Entrepreneur vs. Employee

There is virtually EVERY type of person and personality type working within the insurance industry, as is the case in the Retail Insurance Agency / Broker channel.  To maintain simplicity in our analysis we will divide the workforce into two main categories; (1) Entrepreneurs and (2) Employees.  Neither one is superior or inferior to the other, but rather they are different.  They are motivated differently, have different risk tolerances, etc.; and both are equally important to the industry. 

Your Next Leader

But one key difference is their outlook on Time and Money.  More specifically, how they look at their career is telling; do they look at it as a mere transaction of selling part of their life for money, or in terms of investing/contributing their time and talents to reap greater benefits in the future?  

Many people like the idea of being a business owner, but far fewer both appreciate the demands of entrepreneurship and the skills necessary to succeed.  One problem in perpetuation scenarios is where the founder (Generation 1, “Gen1”) is entrepreneurial in nature and desires to “pass along” or transition the agency to their posterity (Generation 2, “Gen2”) when Gen2 is not entrepreneurially minded.  In these cases, it may make sense to identify another person(s) within the organization who possesses the correct attributes or to look for an outside hire/partner to bring on to bridge any gaps.

Download our Free Report “Agency Perpetuation: What You Need To Know Before You Sell”

Key Points to Analyze of a potential leader:

Weaknesses of Family Perpetuation

It’s common industry knowledge, and somewhat demoralizing, that many Gen2 and younger agency personnel are given positions in family run agencies rather than earning them; and in turn are not as aware of the actual effort required to succeed in the industry.  Many Gen1 principals fall victim to the idea that its to their children’s (Gen2) benefit to provide a smoother transition and entry into the agency, when in fact by doing so may create a slew of other issues that may cause more harm than good.  Such issues may include resentment from other employees, failure to train the family member(s) adequately, etc.

When principals provide all the opportunities that they can to their working children, many times the children then do not appreciate the demands of business ownership.

A Message From Our President

I am personally a product of a family agency and an avid student of the industry. What better industry is there other than insurance? I’ll tell you that there isn’t one. Here’s a link to my bio in case you want to look me up – Matt’s Bio.

Work with a Professional

GDI Insurance Agency, Inc. has been in business for nearly 30 years and have bought, sold and merged with various entities for over 20 years.  We pride ourselves on providing accurate and honest opinions to our friends and partners and invite anyone looking to sell in the states of California, Arizona, Nevada, and Oregon to reach out to us for a consultation.

For a Confidential and Professional Conversation

Contact Matthew Davis to discuss Agency Perpetuation in detail. Matthew Davis, MBA, CPCU, AAI