I have been fortunate to have been in this industry since 1981. I came from an independent agency family, majored in insurance at college and have spent time on both the company and agency sides of the business. I've had the chance to watch this industry go through major changes in product development, technology, regulation and personnel.

But the one thing that continues to stand out to me is that independent agency owners must evolve into agency leaders to ensure their future success. Here are three reasons why:

1) Talent shortages. There are 32,900 more sales agents expected to come into the industry between 2021-2031, according to the Bureau of Labor Statistics. However, it is expected that there will be 52,700 openings for insurance sales agents, each year, over the entire decade.

This shortage will create increased competition for talent and the necessity to develop, train and guide agency staff to offset the decrease in experience as seasoned personnel retires. Also, hiring younger will call for your agency to implement modern ways to prospect and connect with new accounts, requiring agency owners to become more adept at marketing strategies and using social media and other communication tools to differentiate themselves in their geographic marketplace.

2) Disruption. The rapid development of InsurTech companies will continue to disrupt the industry. Companies like Lemonade, Biberk and Boost all offer seamless platforms to quote and service clients. Commercial lines comparative rater platforms will also continue to expand and turn small commercial lines business into a commodity.

When this happens, agency owners are going to be forced into changing strategy to reduce the handling costs to the agency—as more efficiency in processing at the carrier level will result in lower premiums and loss of revenue for the agency due to savings being passed along through rate.

3) Decentralization. Agency owners need to consider what the future structure of the agency will look like over the next decade. The pandemic forced agents to work remotely. This was the first time that insurance agencies moved to a decentralized structure. The result was that many employees did not opt to return to a centralized location. The challenge going forward is to consider how to manage and monitor results to achieve the goals and objectives of the agency.

At this point, you might be thinking to yourself, “This doesn't apply to me. I'm a small agency and I know what is going on in my agency." But knowing what is going on and knowing where you are going are two very different things.

Most people don't just jump into their car for a vacation without knowing where they are going and making plans. Yet, many of the agents I have worked with, regardless of size, don't think about what they want their agency to look like in the future and what needs to get done to make it a reality. The hard truth is that many agency owners cannot find the time to think about the future or are not trained in leadership techniques to steer the process.

Here are four keys to becoming an agency leader:

Vision. Look at your present situation, determine what you want the agency to look like in the future and define how to get there. Seeing what something can become, not just what it is now, is a unique ability. If you find that you are not a visionary, get help.

Also, develop a vision statement for your agency and communicate it within the agency. This statement will describe what you want to achieve over a stated time, usually three to five years. It defines a path that will be taken to develop values, strategies and plans to get there.

Values. Values have recently been a hot topic in our society. Corporations are publicizing their value statements in an attempt to demonstrate that they care and are in touch with today's issues. In my opinion, this is a defensive reaction to criticism and it's far better to communicate those values proactively with clients, carriers, employees and the community so they know what you stand for in advance.

Also, develop a value statement that reflects why somebody should do business with you from an ethical perspective. It should communicate what matters most to you in terms of the specific values you want to see in your culture: integrity, honesty and humility, to name a few.

Your value statement will align with your vision statement and act as your social conscience as you work toward your vision.

Strategy. Close the distance between where your agency is today and where you want it to go. Developing a strategy should include input from everyone who has a stake in ensuring the agency achieves its vision. This is particularly important in small agencies. Owners of small agencies sometimes need to consider that their staff may have insight that they do not because they are dealing with clients so the owner can focus on sales.

Determining milestones and setting goals is a necessity in developing a good strategy. Once a strategy is in place, it becomes the map that will be followed by the agency and will be a major consideration in making important business decisions. Any decisions that do not support the strategy should be vetted very carefully because it will take away resources and delay the completion of key goals that actually support the strategy.

Planning. Building a plan is the point where everything comes together. Planning enables you to take what you have done and turn it into a comprehensive document that will guide your daily activities.

Create a new plan every year. It should contain objectives that are specific, measurable, attainable, realistic and time-bound—also known as SMART. The plan then takes each of these goals and objectives and develops action steps that will be taken to complete the objective. Most importantly, plans need to be consistently reviewed to see if any corrective action is necessary. Your plan will fail if you don't establish accountability for completing the actions.

As an agency owner, you have many things that require your attention and time on a daily basis. Preparing for the future needs to be one of them.

Christopher Clinton is a consultant with SIA of NC, a Big “I" member firm based in Jacksonville, NC.