With the United States’ participation in the World Cup and Wimbledon behind us, the media was temporarily obsessed with providing hourly updates of where pro hoopers Lebron James and Carmelo Anthony would be playing when their contracts were up.
Considering the constant barrage of far more important news from around the world, it’s amazing the disproportionate amount of attention these basketball players garner—at least in the media.
But buried in these sports headlines is actually an important lesson for independent insurance agents.
Long ago, players were associated with their teams—and teams rarely traded their star players. Bill Russell and Bob Cousy played their entire careers in Boston; Jerry West did the same with the Los Angeles Lakers. In fact, it’s interesting to note that for its first 20 years, the NBA had a “territorial” draft rule: In order in gain the support of the local fan base, the NBA allowed a team to forfeit its first-round draft pick and then select any player from within a 50-mile radius of its home arena. This privilege ended in 1966.
One example: According to John McPhee’s book on Princeton legend and U.S. Senator Bill Bradley, Princeton was geographically located one mile closer to Philadelphia than New York City. The New York Knicks desperately wanted to draft Bradley, so when Syracuse wanted to move the franchise to Philadelphia—which required the approval of the other teams—the Knicks agreed only on the condition that Philadelphia could not use the territorial pick to claim Bradley. Philadelphia agreed, and the rest is history—Bradley helped lead the Knicks to two NBA championships. Interestingly, Bradley did not head directly into the NBA but rather studied at Oxford as a Rhodes Scholar.
So what’s the message for independent agents? Star performers want to go to winning teams. They look at the management, the other players on the team and the commitment to winning a championship—and it’s not just about money. The three stars of reigning NBA champions, the San Antonio Spurs—Tim Duncan, Tony Parker and Manu Ginobili—make less than $30 million annually in total. They could each make more money as free agents but prefer to play for their coach, Greg Popovich, and continue to dominate the NBA (the Spurs have won five titles).
The questions for independent insurance agency principals are: Are you overseeing a winning organization? Are you committed to the types of resources to win in the future? Convincing star performers to join your agency requires thinking hard about the capabilities your agency invests in generating new business and maintaining current clients. How often does your agency benchmark its metrics versus those of Best Practices agencies? Does your agency invest in quality staff, technology, digital marketing and client-based services that enable your business to truly thrive?
It’s more challenging than ever to grow organically and compete with the other insurance distribution channels. Recruiting dedicated staff is critical to the future success of the agency—but talented people have options. Assuming a competitive pay and benefits package, star professionals choose the organizations they work for based on the appeal of the business culture and the resources that are available to help them serve clients.
Don’t lose the free agent battle. Focus on being a vibrant general manager and you’ll put a winning team on the floor.
Dave Evans is a certified financial planner and an IA contributor.