This summer my wife Iryna and I visited Bordeaux, wine capital of the world. I enjoy California Cabs and a nice Pinot, Barolo or port, but you’ve got to love the history and staying power of French winemakers.
As much as my wife and I enjoy the wines themselves, we appreciate even more the care that these winemakers put into their work—knowing every square foot of their land and vine stock, skillfully responding to weather variations through the growing and harvesting seasons, and experimenting with a wine’s components until the blend transcends the specific lots that went into it.
I hate to say I think about insurance broking on my winery tours, but there’s no escaping the similarities between running a brokerage and crafting fine wine.
Appreciating a good wine is about appreciating all of its parts. First you admire the color and take in the scents the wine gives off. Then you enjoy its flavors and texture, and, last but not least, the length and the finish. When all these elements come together as a deeply enjoyable whole, the same wine variety grown in the same area can command a much higher price and reputation in the marketplace.
In the same way, brokerage firms—through the people you hire, the way you operate and the product and service innovations you advance—strive to bring together the essential elements that will allow your brand to age well and rise in value.
If all the elements in the firm are not well attended, however, there is an imbalance. In the winemaking world, this would equate to a wine being over-oaked, too sweet or too simple. One part of the wine is overshadowing the others, to the detriment of the whole. Here are some examples from the brokerage world for how to ensure a good blend:
Your producers. The top line is the most important one on your profit and loss statement, and your producers are the primary drivers of that line. But if your producers engage in limited new client prospecting and collaboration with your service and support team, then something is wrong with the blend. In these cases, it’s important to regain focus on the elements that direct and influence the activities of producers. These include strong management and supervision practices, service standards and innovations, and well designed incentives, as well as interpersonal skills like modeling values, having difficult conversations and handling resistance.
Short-term goals and activities. It is great to have action-oriented, real-world, grounded leadership and management principles, but they can overshadow other elements a firm needs to be successful over time. These include strategic plans and major project initiatives, staff development programs, succession plans, and continuously improving your standard operating procedures and business processes. Short-term priorities are best balanced with longer-term efforts to better understand and learn from performance trends, mine for new opportunities, and manage risks before they trigger a crisis.
Clients and staff. It makes a lot of sense to focus on making our clients happy, but research on client decision making suggests that what matters most are the insights we provide that trigger breakthroughs in our clients’ business and product and service innovations. So getting the blend right between satisfaction and impact is key to client retention. This principle also holds true for how we engage our employees. They’re more likely to be committed to the firm and develop professionally when we focus on building diverse teams, setting high standards, running meetings and projects systematically, and holding staff accountable for performance and follow-through.
Support functions. Firms often rely on the human resources, IT, and finance functions to enforce the rules and “make the trains run on time.” But each of these functional areas is capable of providing value far beyond this foundational level. Staff members in these functions should be encouraged to approach their products and services like you do your firm’s clients. In addition to their basic responsibilities, they should coach and influence managers to create the culture you desire and serve as vital contributors to the strategies you articulate.
Talent. In our field today, the word “talent” is at risk of becoming overused. There’s no denying what an A-player can accomplish but only when supported with clear roles, a strategy to advance, effective supervision, and solid practices and tools for working with clients, partners and each other. The world of sports makes clear that talent alone rarely trumps a good playbook executed with discipline, even by average players.
The best leaders and managers of our firms, like the great winemakers, understand the timelessness of the core elements of their system. When creating your master blend, begin with these steps: build high-trust partnerships, collaborate to advance sound strategies and plans, employ effective management practices, invest in developing others, and live your values.
With that good start, your firm should develop strong legs and give you a satisfying finish.