Practice Creates Proficiency


In my last two blogs, I have written about how long it takes to become an expert at something.  According to Wharton Professor Adam Grant it takes 10,000 hours.  Years in fact.  I have also noted that this meshes with my experience as a commercial insurance specialist.  But, as I have also pointed out, proficiency until mastery comes is what allows us to make a living, be successful and serve our clients well.

Proficiency, though, requires practice.

Actually so does mastery.  It’s interesting I think that lawyers work in a “law practice” and doctors, no matter their experience, “practice medicine”.  They also continue to train in their profession.  As I write this I am awaiting my instructor for a day of “recurrent” training in my airplane.  Pilots too must train and practice to maintain and increase proficiency.

While I wait, I’m a bit nervous.  Am I as proficient as I hope I am?  While not a test, I know the day will reveal any weaknesses I have.  On the other hand I am looking forward to the experience because I know I will learn some new skill, hone my ability in other areas, and be better when I leave than when I started.  This is what I think a professional in anything does. Practice to proficiency.  Work on making continual progress on developing skills and hope to eventually to demonstrate the mastery of the expert.  At my training, I know we’ll also review accidents.  All of the accidents we review will be pilot failures where practice and proficiency were ignored.  Even by experts.

Those who want to become successful insurance agents and agency owners don’t need to wait to become experts.  But they must practice to gain and maintain their proficiency just as other professionals due. Unfortunately, I frequently see agents who just “wing it” and hope for the best.  Effective practice requires a plan, a briefing of what is to be done and a post practice review and evaluation.  This is what pilots do before every flight and what other professionals due each time before “practicing” their craft.  When they become “expert” they may forgo the checkList in favor of a flow but never the planning, practice Itself or the review.

How about you and your agency?  Are you already an expert or working your way to proficiency? Regardless of your development I encourage you to continue your practice!




One of the things that always provides amusement, for older people, is to hear children plan to do something difficult and complicated.  Their plans are always simple and underestimate the difficulty and time required.  This is because children are natural optimists!

I find that insurance agency entrepreneurs are also optimists, and occasionally share the lack of understanding of the difficulty of doing things that our younger selves did.  This is a tremendous advantage for them because it allows them to try things, and become successful, when others are fearful.

For example, the successful personal lines producer, who sees greater opportunity and income in commercial lines, often underestimates the complexity of the business, and thus, the time required to master it.  The good news is that mastery isn’t required for success!  As I noted last time, mastery seems to take about 10,000 hours of practice, which can take many years.

Proficiency is required to achieve success.  While less costly in time and money to obtain, it isn’t cheap or inconsequential.  Proficiency can be defined as, “a high degree of competence or skill.”  To acquire proficiency in anything requires effort.

I spoke to a highly intelligent and driven young man, several years ago, who wanted to immediately begin his career in insurance as an agency owner specializing in commercial insurance.  I pointed out that all professionals require a great deal of training and usually a lengthy form of apprenticeship before being able to competently work in their field.  As examples, I pointed out doctors, lawyers, and engineers, all of whom study for years, and then work under close supervision for many more years before working independently.  Only when they achieve proficiency are they free to go their own way.

In my experience, commercial insurance is similar.  A talented person can make a living in commercial insurance from the beginning, even though they aren’t skilled or proficient, just as a young doctor can earn a living doing simple tasks while learning the complex.  The difference is that the doctor is supervised in his lengthy training by other doctors whereas the young insurance agency owner may only be supervised by his unsuspecting customer!

Our business is a profession, and requires that we exercise due care to calibrate our business to our knowledge and ability, not to do harm to our customers through unnecessary mistakes.  As we gain proficiency we can work on increasingly complex risks, but we do our own development, and our customer’s finances harm, when we work outside our own proficiency.

Expertise in the field of commercial insurance takes at least 10,000 hours to develop.  Proficiency in a limited area of the field may only take a few dozen hours.  Luckily, we can build an income, and a business, by being proficient in limited ways until we are able to become expert in many!

What is an Expert?

the beatles

Insurance is very complicated.  The first time anyone tries to read an insurance policy that becomes immediately and dramatically obvious.  Commercial insurance, as a specialization, is much more difficult to understand and master, than personal lines. Virtually, everyone in the insurance agency industry believes this, and those that don’t, find out very quickly that it is when they try to enter into the business of selling it.

As I reflect on my early career as a commercial insurance producer, I have often thought that it took me about five years before I began to feel reasonably competent.  Speaking to colleagues, they all report a similar period of time during which they believed they weren’t quite ready for prime time.  As an agency owner I have learned that customer service agents take a similar amount of time to become really expert at what they do.

Now, insurance is complicated, but what is it about five years that seems to be our common thread?  In his new book “Outliers” Wharton Business School professor Malcom Gladwell provides the answer.  It seems that to master any complex skill, whether it is athletic, academic or professional, requires the average human being about 10,000 hours of purposeful participation.

Gladwell gives a lot of examples of this, one of whom is the rock group the Beatles.  In Gladwell’s telling, it took the Beatles seven years and 10,000 hours of performing to break through.  They were able to amass those hours in only seven because of an unusual set of circumstances.  Similarly, some insurance people are able to gain mastery in 5 years, and for others it takes much longer.

The implications for this, in our work and staffing, are many and interesting.  I think an understanding of the time required, gives us perspective on how to judge our performance and progress.  It also helps us understand the true value of the experienced team member.  Hopefully, it serves as a cautionary note to the over confident who want to charge into the business without adequate preparation.

Clearly, it takes a long time to really master our work, but that does not mean that we cannot be good at it in the meantime.  There is a difference between mastery (being an expert) and proficiency (being a professional).  Mastery isn’t required for success, but proficiency is.  More on that next time.


Beyond Benchmarking


I’m a committed believer in the value of benchmarking operational results, and comparing them to the results of other similar businesses. I’ve written about that many times, but essentially the idea is to answer the question, “is my business running well or not?” To answer that question in a realistic and helpful way, the second question should be, “compared to what?” That is where industry benchmarks come into play. They answer the second question, and allow the business owner interested in improving performance to compare his/her business against peers.

This exercise, in and of itself, is incredibly valuable because it can highlight areas that may need attention.

It may also be in comparing your business to others, you see an anomaly, but the cause isn’t immediately apparent. Now what? This is where inviting other business people, in a similar business(es) to look in detail at certain parts of your operations, may be very helpful.

Recently, we had several key people, from a similar business in a different part of the country, visit us to “audit” our operations. I wanted to try to better understand how good a job we were doing, where we might improve, and perhaps return the favor by allowing others to learn from us. In my invitation, I was clear that no question was off limits, everything was available to see, and our employees should cooperate as fully as possible.

This takes a willingness to be humble! After all, you’re essentially parading naked down Main Street, in a metaphorical sense.

The results of the visit we had over three days were extremely helpful to us, and allowed us to better understand the impact of our operations on our numbers. We got a lot of great ideas for improvement and had meaningful conversations on a range of issues that affect our business. Yes, the debrief required a lack of defensiveness, but the learning was outstanding. Our colleagues also benefitted as they learned some new ideas as well. It was a tremendous win for everyone.

Have you ever tried something like this? If not, I hope our experience is motivating to you. With a properly prepared, “non-disclosure agreement” and colleagues who are not competitors, you can’t lose! Benchmarks may tell you something could be better. Going beyond benchmarking can show you how.


Internal Controls

A few years ago someone close to me was having a lot of issues with a problematic employee.  This employee had gotten really difficult to deal with and become really unpleasant.  My friend resolved to have the unpleasant fix-it-or-go conversation when his employee blurted out, “I’ve been stealing from you for years”.  Now he knew where the attitude problem came from.  Stress from stealing.

But the problem was bigger than attitude obviously.  As he dug in with a hired CPA he discovered that the amount stolen from him was huge, and the covering of tracks by his employee very clever. The thefts didn’t bankrupt his business, but they did hurt it severely.  As it turned out, much of the thefts could have been prevented with some fairly simple internal controls.

Small businesses have trouble with segregation of duties.  Often they only have one bookkeeper who may perform those duties as one job of many.  Certainly most small companies don’t have multiple people in accounting.  So, they fail to segregate.

Here are some basics.  You need to segregate who agrees to buy things from the person who pays for them.  And you need to segregate who balances the check book from who writes the checks.  If this means the business owner has to be one of those people, or a part-time out-sourced service has to be used, that’s better than being stolen blind like my friend.

Another basic that gets ignored often is requiring people who deal with your money to take at least one full week off a year.  That means a total of nine days.  Being gone that long allows things to show up.  Not everything will, but it makes the job of covering tracks harder.

There are other prudent business practices everyone ought to engage in, but most do not.  Those who don’t are just an employee personal problem away from serious financial harm.  It’s worth asking your outside CPA for counsel on.


Ginsu Knives

I can remember watching TV commercials as a kid featuring Ron Popeil and his amazing kitchen gadgets, and commercials for Ginsu knives with fascination.  Not only were the products amazing they also seemed a bit unbelievable.  They did so many things for so little money.

Of course other people were suspicious too and that was why these products always offered “free gifts”.  The free items were there to enhance the already incredible value.  But they were also there for an even more important reason: risk reversal.

One of the problems all marketers face is how to get potential customers to take the risk to buy the products they are selling.  People don’t want to waste their money and they are skeptical.  One of the smart marketers deal with this is to reverse the perceived risk by not only offering money back guarantees but actually making people better off, even if they don’t like their purchase, with items of value they get to keep.  Thus, “if you don’t like it return it for a full refund – but keep the knives as our gift” tag line of all those early TV commercials.

This is powerful!  The question is how can insurance agency owners make use of it?  After all rebating premium, or giving gifts worth very much, is usually against the law.

One way to do this is to develop a basket of services, or inexpensive goods, that you provide to new customers that come with every new account.  Even if the customer is unhappy later they get to keep those things.  I’ve seen this work as a real value add in agencies.  You don’t have to spend a lot of money to put things like iTunes gift cards, electronic devices, vouchers for restaurant meals and similar things in your basket.  Promote its value and let people know that even if they try your agency and don’t like the experience they can “keep the knives”.

There are lots of ways to reverse risk, and it’s still an important psychological marketing tool even to today’s sophisticated consumers.  What ways can you think of to reverse risk?

Giving It Away, Two  


ideas-twoIn my last post, I talked about the reluctance of many to share, contrasting it with what a mindset of abundance can do for those willing to share.  My thesis was that giving things away, instead of always trying to see how much you can get for them, can lead to greater prosperity.  In this post, I’d like to tell you about one of the ways I am putting my money where my mouth is.

I decided to start a new company because (what else!) I saw a need.  The need was for our member agencies to be able to make more money on some of the business they write.  As I worked on the pro forma I was conservative in my estimates but projected a 35% annual growth rate for the business.  In reviewing my numbers with our CFO, he pointed out that if we could get to our 5 year revenue estimate in the first year we’d make a lot more cumulative profit over that period.  Duh!

I was challenged.  How could we grow the revenue that fast?

My thinking centered on how we could make this new company’s product absolutely irresistible to those who use it and sell its services.  After a lot of thought, and tinkering, I decided to create an industry best compensation program and, in addition to that, give half of the net profits to those who use and sell the product.  That would let me cover our costs, make a reasonable return on capital and be irresistible in the bargain.  It would let us become true joint venture partners with our customers and sellers without their needing to make any investment or take on any risk.

So, that’s what we’ve done.  In the first three weeks since we launched, we’ve booked 300% more revenue than my original forecast!  And we’ve arrived about where I thought we’d be at the end of year 5!  In addition to that, we’ve only marketed to about one third of our prospect base – so we have every reason to expect our first year numbers to blow our wildest dreams away.

I’ll be the first to admit that the results we are seeing far exceed what I expected.  But I did expect something remarkable to happen.  Sharing opens up the possibility that the part that you keep can be much bigger than what you would have had if you had kept the whole thing.  In my experience the same thing happens when you share ideas as well as profits – they multiply – and you’re richer for having donated your wisdom to others.

To some this probably sounds crazy.  But I’d like to challenge you to think about what you have that you can give away, or share with others.  What are the possible positive outcomes for your business?  I believe they are virtually unlimited.

Taking the Long View


Do you have any problems in your business right now?  Of course, you do.  There are always problems!  I was talking about that this afternoon with a very experienced consultant who has worked with a lot of business owners over her career.  And as we talked about this it occurred to me that those who become truly successful as business people tend to overlook their problems.

On the contrary, I’ve noticed that many people seem to go from one problem to the next.  Often solving one thing brilliantly before moving on to another.  But as they go they are constantly focused on problems.  Often they are frustrated and sometimes, it seems, perpetually so.

Others seem to almost glide past the temporary difficulties of life, and business, in an almost glib or cavalier fashion.  Serious people may even look at them with a certain disdain for their seeming carelessness.  Yet, these people seem to do very well.

I think the difference is vision.

Some seem to focus only what is right in front of them and when that is troublesome what they see is trouble.  Others have focused their attention on the future, and while potholes appear in their path, they don’t focus on those rather keeping their gaze far out in front.

The difference is a bit like landing an airplane.  When you first begin to learn to fly, and land, an airplane you are taught to focus your eyes at the far end of the runway and not the part closest to you.  This is the key to a successful and smooth landing.  When you forget that and look where you’re landing you tend to bounce, skitter and slide.

Like landing an airplane, keeping the long view in sight is important to running a business well.  It is what keeps the little bumps that are normal from becoming the focus.  There are always bumps but they will be smaller, and less impactful, if you are looking at the future instead of the present.

When you find yourself beset with trouble, and it seems that your days are filled with problems, try looking down the runway to the end and see if things just don’t go a whole lot smoother.

Giving it Away


I’ve had two conversations recently, about the same topic, that are bothering me.  In the first a new friend in our industry observed that sales people in general, and insurance people don’t like to share.  And by that, he meant share ideas.  In the other, a colleague wondered why I don’t sell some of my ideas to others and instead give them away.

The first conversation was bothersome because I recognize that my friend is right.  In fact, I frequently encounter agency owners who view everything they do as a secret, that if others copied, they would lose opportunity or business.

The second conversation is a concern because it implies that not being greedy, or not always seeking to profit from my ideas, is foolish, short sighted or somehow contributes to a smaller degree of success.

For the last couple of years, I’ve read and listened to Peter Diamandis, the author of “Abundance: The Future is Better Than You Think” and the developer of the Abundance 360 conference. One of the things Peter talks about is the demonetization of products and ideas.  The other is how truly abundant almost everything of value in the world is.

Peter’s teaching, along with my own personal philosophy of casting bread on the water has caused me to share increasingly those things that others might call “trade secrets” or some other appellation of value.  My thinking, as it has evolved, is that there is more business available to me than I can ever possibly garner and what little I know of is probably already known anyway – so what is the harm in sharing? I also have discovered that the more I am willing to share, the more I am shared with.

In fact, while it isn’t the primary motivator for me, I’ve had the interesting experience that the more I give away the more I receive.  I’ve written before about Adam Grant’s book “Give and Take: Why Helping Others Drives Our Success” and about how powerful, in terms of human interaction, relationship and ultimate achievement giving is.  In contrast, my own personal observation is selfishness is often the root of failure.

Selfishness and greed are born of a mindset of scarcity Diamandis tells us.  And these characteristics repel while generosity and giving attract according to Grant.

As a practical matter, I cannot possibly sell every prospect in my market nor could I take care of them if I did.  If sharing with others means they can, so what?  But what if sharing opens me to the gifts of others?  In my experience, it has and that has led, in business, financial and satisfaction terms to more success than I ever dreamed of.

So, who is the fool?  The one who shares or the one who secrets away?  We all get to make this distinction ourselves, and in our own business the decision.

Tuition for Something Else

diceI recently read an article by a well-known business leader who listed seven things which he believes separates highly effective, successful people from ordinary ones.  One of those seven things was a willingness to risk failure.

In our business we talk about failing a lot.  We do this because I believe that if you don’t risk failing you can’t make progress.  You can’t push your own envelope.  In fact, I tell team members that if they never fail, they aren’t doing the work I expect them to.

Among other things, failure is a wonderful teacher.  We don’t just learn what not to do when we fail, we also learn how to do things better.  A few years ago I decided that we should try an experiment and see if we could teach two complete insurance neophytes how to be successful agency owners.  This was way beyond our company’s skill set and my team was dead set against it.  I understood their reservations, admitted that we would likely fail, but also believed we’d learn a lot that would help us with the core of our business: developing successful agencies.

We put a lot of effort into teaching these two people and mentoring them.  Today, a bit over two years later, one of them is out of the business and the other one is still struggling.  Clearly, this wasn’t a runaway success on its face. But, there is much more to the story.  What we learned from the process has been invaluable in the teaching, training and mentoring of several dozen new agency owners since then.  Our “failure” taught us a great deal that has been very useful.

In business, experimenting, taking risks and facing potential failure pays tuition for an education in something besides the experiment.  We’re paying tuition for something else.  Looked at in this way, the routine of taking risks becomes in some ways easier, or more normal.  Certainly it helps us see the value of doing it.  As business leaders, if we wish to be really effective, this risk-taking skill is incredibly valuable.