Many factors contribute to the success of high performing firms. A clear and quantifiable distinction for the Best 25% of firms analyzed is all have C-suite mentors at other large brokerage firms through a formalized peer exchange network. In the insurance industry, it’s easy to get caught up in the daily whirlwind of new business and renewals, but sales are only one component of a healthy firm. Staffing, technology, calibrating the pace and rate of growth, remaining relevant, having a strong value proposition and when to take action are often the things that keep leaders up at night
Many executives can become paralyzed addressing top problems in their firm. Often, the biggest challenge is knowing where to start and how to tackle each problem effectively. One of the best ways to get un-stuck from this paralysis is to join an executive peer exchange network. Peer exchange is a collection of like-minded people dedicated to problem-solving, best practice sharing not to help each other be just a little better but significantly better. The most powerful peer exchange networks help business owners benchmark company performance and drive accountability for meaningful progress.
The cornerstone of any peer exchange should be financial benchmarking. In MarshBerry’s experience, firms that are part of the Connect Network, see firsthand just how significantly top tier firms financially outperform their rivals, usually by 200% - 300%. Critical financial metrics provide an objective way to measure the return of their peer exchange investment as well as a comparison of their performance compared to the rest of the insurance industry. For example, according to MarshBerry’s proprietary financial benchmarking system, Perspectives for High Performance (PHP), the Best 25% of MarshBerry’s Connect Network members have an organic growth rate of 12.9%. This is over three times more than firms that never join a peer exchange. In addition, Connect Network members have an average EBITDA of 30.1% compared to only 15.6% for firms that never joined the Connect Network. These are only two examples of quantitative outcomes that demonstrate how peer exchange participation can be more powerful than tackling change and growth alone.
Peer exchange also drives a level of accountability an owner may not experience with their internal team. Many in leadership roles within their firm don’t feel they have the partners, infrastructure or culture to transparently discuss company initiatives let alone ensure they are given the attention needed to make meaningful change. A strong peer exchange facilitator and group can act as a de facto outside board of directors who ask the tough questions, require regular updates on company goals as well as discussion around why a milestone is at risk if not being met.
For those considering peer exchange, it’s imperative that goals and challenges are re-evaluated regularly. This encourages members to revisit and troubleshoot initiatives proactively. Members that do not make consistent progress are often challenged by their peers on their true intentions for the firm’s future. Constructive confrontations can be a powerful accountability measure to keep a firm on track for their long-term goals.
Being a member requires dedication to achieving short-term goals that yield long-term growth for your company. This type of dedication can be daunting, but the hard work can feel more manageable with other peer leaders and facilitators dedicated to your success. Simply put, joining a peer exchange network requires an openness to changing your business model and a boldness to go beyond just talking about it.
If you have questions about Today’s ViewPoint, or would like to learn more about how MarshBerry’s Connect Network is helping firms power growth, please email or call Brooke Lugonjic, Vice President – Connect Network, at 616.828.0741.
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Sources: MarshBerry proprietary financial management system Perspectives for High Performance (“PHP”). Results based on available historic information within PHP. For illustrative purposes only. Individual results may vary. Past Performance not indicative of future results. Data for 9/30 trailing twelve months as of 12/15/20. EBITDA: Earnings Before Interest, Taxes, Depreciation, and Amortization.