The McDonald’s Effect

How one brokerage streamlined its business and saw revenue skyrocket

Company: J.T. Insurance Services

President: James Clay 

J.T. Insurance Services was founded in 1969 by my father. I actually didn’t come into the business initially. I worked for the Toronto Dominion Bank and I was going to have nothing to do with the family business. I joined the in 1992, was appointed president in 1996 and actually bought the business in 2000.

When my wife, who previously worked in the franchise field, joined the business, she would say, “You should do things this way. This is how it’s done in the franchise environment.” I would reply, “We don’t do it that way! This is the insurance business.” But I ultimately listened to her. Our thing was, how is it that McDonald’s can be run by a bunch of 13-year-olds? Effectively, you’ve got kids in there running this massive corporation. It comes down to systems and processes. So we went through a complete change and we put everything down in manuals and processes and checklists. We really tried to make sure that everything was being done in exactly the same way so that the product going out the door, whether I signed it or anybody else in the office signed it, would look exactly the same. For example, we don’t let our sales people talk to markets. They’re sales people; they do what they do best and they talk to clients. Marketers deal with the markets and that way our insurance companies know that they’re getting a certain expertise and a certain consistency.

This approach has been the greatest thing for us. It’s actually reduced the workload for the staff. We audit it to make sure that everybody is following the systems and procedures. That allows us to focus our time on what we should be doing, which is sales and servicing our clients. We have 15 employees now and, realistically, we should have 30 to 40 based on the volume of business we’re doing. Our revenue-per-employee numbers are off the charts.

We really tried to make sure that everything was being done in exactly the same way, so that the product going out the door, whether I signed it or anybody else in the office signed it, would look exactly the same.”

We also don’t hire from within the business. Rather than having insurance-trained people trying to learn how to sell, we went the opposite route and said we’re going to go after really good salesmen in the various sectors, bring them in, and teach them the insurance business. For instance, we do a lot insurance for golf courses. To me, it made perfect sense to go and hire a golf pro. So we hired the head golf professional from a local golf club and brought him into the business. A head golf professional knows how to interact with other head golf professionals and probably has a very strong network in that field.

But as much as we try and get the sales people form different sectors, we still have to have good technical people. I find that is a continual challenge. Another big one is growth. You can grow your client base, but for us to deliver a return, we’ve got to start making substantive acquisitions. There are a lot of buyers; there aren’t a lot of sellers. We’ve had two acquisitions recently that failed because we got out bid by an insurance company. It becomes very challenging.

One day we’re going to be a massive success story in Canada and people are going to say we’ve come out of nowhere, and they’re not going to realize that all of these things, the groundwork we laid doing these changes in our procedures and systems are what allowed us to ramp it up.

As told to Regan Reid

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Copyright 2013 Rogers Publishing Ltd. This article first appeared in the April 2013 edition of Canadian Insurance Top Broker magazine.

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Transcontinental Media G.P.