Underwear in the Basement

One of my mentors is a capitalist through and through. An ongoing argument between us has always been Amazon vs. the ‘Lifestyle Agent.’ My contention is that a business exists for the greater good, generally speaking (Amazon), as opposed to his opinion that the business merely exists to serve the sole needs (lifestyle) of the individual running it. If the latter is true, why not maximize your potential earnings by simply selling insurance out of your mom’s basement in your skivvies?

A horrid image I know, but for me the underlying takeaway was: ‘identify focused efficiency in simplicity.’ In other words, if you can tune out the distraction of overhead and simplify your focus through generalization, you can in turn create efficiency. Let’s explore this concept.

The Generalist General

If I were to ask every agency principal out there which business model they would want to emulate, I bet I’d get some fairly uniform responses, in that they want to become ‘the Amazon of our industry.’ Conversely, if I were to pose the question of how to get there, the variety of answers would be almost incalculable. Furthermore, I’m confident that each response would be nothing short of a very hyper-specific dissertation. There are no Bezos here.

I like to say I’ve never even met an agency principal to date–just instead I meet an HR Manager, IT Consultant, Accountant, or Marketing Rep, depending on which day of the week it is. I also like to say I know just enough to be dangerous in each area, and nothing more, which is the generalist ideology in a nutshell.

I’m sure Jeff Bezos would wholeheartedly agree that in knowing too much about anything, your perspective becomes clouded as does your decision-making. When your role is simply to maintain momentum by making sure the wheel continues to turn, you cannot be focused on anything more than the spokes being attached to the wheel, that there are enough of them, and that they are uniformly snug.  

The Devil is the Details

On the other side of the coin is what I call the micro-manager, who firmly believes that growth is only attainable through efficiencies at the cellular level. They risk falling victim to mis-scaling operations in the name of efficiency & productivity, determined to operate like a Progressive or GEICO. What they don’t understand is that an initiative as simple as addressing one more email per day across a 3-person organization is going to have an almost non-existent impact, compared to the same initiative across a 30K+ employee headcount. They are essentially using a different formula in the equation and expecting the same result. Does the granular impact of the one extra email create a morale hazard which drastically outweighs the benefits, and is that hazard in turn transferred to the end consumer?

The Cat with Too Many Hats

Now that we’ve brought up Progressive & GEICO, let’s revisit the generalist’s credo. While the role of agency principal must be somewhat generalized in order to keep the wheel turning smoothly, this only works when each of the spokes (the other roles at the agency) are specialized in their own area, from HR to IT to  Accounting and Marketing. Yet I see, more times than not, most of these roles being delegated to one party: the CSR. The irony is we want to be Progressive & GEICO when it comes to efficiency & productivity, but we refuse to delegate separate resources to each area like those giant corporations do. Last time I checked, the claims adjuster wasn’t the underwriter, and the underwriter wasn’t the agent, and therefore the agent wasn’t the adjuster.

While the agency principal wears many hats, they’re all relatively limited or shallow. A CSR who is asked to implement work in multiple areas of expertise requires a much deeper understanding of each. Don’t ask your CSRs to balance a tower of top hats on their heads when you’re wearing a stack of berets. 

Hanes By Any Other Name

Maybe there is an obscene truth to the idea of the agent in his underwear in the basement that we refuse to “bare” witness to, pun intended. Sometimes it truly is best to keep things simple and not get too big for our metaphorical britches. Don’t make things complicated just for the sake of doing it like an organization that is completely different in size or scale. You always hear about humble beginnings,  from Jobs to Cuban. Like them, we need to remember to put our pants on one leg at a time.

Blog Author:

Michael Tonsetic
President | CEO
Blanchard Insurance, Inc.
Altamonte Springs, Florida