Many agency owners want their employees to think like an owner. And what we mean by that of course, is we want them to care as much about the business as we do and we want them to make decisions that are in the best interest of the agency rather than themselves or even their department.
In some cases, we’re talking about a leadership team. But the reality is it’s pretty hard to think like an owner when you’ve never been an owner and when you don’t have the weight things like can I make payroll this month?
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00:03Hey, everybody. Drew McLellan here from Agency Management Institute this week. Coming to you from Cleveland, Ohio. You know, we're with a peer group and one of the conversations were having yesterday is this idea that many agency owners want their employees to think like an owner. And what we mean by that of course, is we want them to care as much about the business as we do and we want them to make decisions that are in the best interest of the agency rather than themselves or even their department. In some cases we're talking about a leadership team. But the reality is it's pretty hard to think like an owner when you've never been an owner and when you don't have the weight of gosh, can I make payroll this month? 00:42And am I going to impact people's mortgages and all the other things that come with actually owning the business. But I will tell you that you can get your employees to think like an owner or at least care about the same things that an owner cares about. And the way you do that is making sure that they understand agency math and that there's something in it for them. And this is why it's really important to have a bonus program that is tied to company performance. The KPIs that matter the most to you and to be talking about that throughout the year, so that when the company hits an AGI goal or hits a profitability goal, there is something to be gained by the employees that helps you accomplish those goals. If they see that when the agency does well, basically there's no direct correlation. 01:36Of course there's an indirect correlation. There's raises, there's new computers, there's all of those things. But if there's not a direct correlation like there is for you, then it's going to be much harder for them to care about the things that you care about. So if you want your employees to think like an owner, to behave like an owner, to make decisions like an owner, to have the instincts to protect the whole rather than protect their piece of the pie, whether that's them or their department, you have to give them incentive to do that. The reason you think about it that way is because you own the joint and because you have both the weight and the benefit of owning and running an agency. 02:17They're never going to feel the full weight, but they can feel a proportional amount of the benefit so that they are motivated to help you get the agency to cross the finish lines that matter most to you, the owner, and to the agency as a whole. But to expect someone to just behave that way is highly unlikely. Now all of you probably have a unicorn or two that in the course of your career of owning the agency, on occasion people do show up and are just wired to think like a business owner and are wired to come in as a team member who behaves like an owner. But that is not the norm. 02:56So if you want everybody to think like an owner, you have to build incentives in so that they have skin in the game and they feel the win just like you feel the win. Okay, now you know what? They're never going to feel the loss the way you do, and that's probably okay. Most people aren't wired to sustain that kind of pressure and stress. That's why not everybody owns a business. But everybody wants to be rewarded for accomplishing goals. So make sure you build the rewards around the goals that matter most to you, the actual owner. All right, hopefully that's helpful. See you next week. Our.