Newsletter Sign-up

Morgan City, La. is a small town on the Atchafalaya River. It's a short distance from the Gulf of Mexico and bumps up against disappearing wetlands in Louisiana. A 24-foot sea wall protects the city from the ravages of hurricanes and rising waters.

Louisiana is home to 40 percent of the nation's wetlands and 80 percent of all costal wetland loss in the continental United States, according to Restore or Retreat, a non-profit coastal advocacy group. The state has lost more than 1,500 square miles of wetlands since 1930.

Unfortunately on the morning of June 14, a painter, doing final touch up work, noticed a crack in a wall. By mid-afternoon, the building sunk. People in Morgan City know how to build in the swamp. This particular structure was built on 75 foot pilings.A reputable contractor and architect were involved. These folks didn't get stupid overnight.

I believe when the autopsy of this disaster is complete it will be discovered that the engineering and architecture followed best practices. Permits and inspections were done according to code and the builder followed the plans of the architect and engineer. What I believe will be discovered is that the swamp has changed. I believe when more is known we'll learn that the coast is eroding not only from salt water intrusion, hurricanes, chemicals and oil spills but also from killing trees, grass and vegetation that are the swamp.

I've discussed this mess and my premise about the cause with builders, engineers and city permit officers. None of us are sure what happened but all agree that my theory may prove true. One engineer said you must "drive pilings to refusal." My interpretation -- you must be better than the practices needed tomorrow vs. assuring your practices are equal to what works best today. Market awareness, client intimacy and innovation must be your new benchmark.

As an agent sitting in mile high Denver or on the bedrock of New York City -- you might think, "Who cares?" or "What does this have to do with us, our agency, our industry and our future?" Read my lips: "Your swamp is changing as well."

In 40 years I've seen much erosion in the ecosystem of Independent Agents and our industry. Government intrusion, alternative funding mechanisms, defaulting much of personal lines to direct writers and now direct writing by "our" carriers are obvious. Also today, the cost of what we sell is becoming more and more unaffordable to the consumers. This is particularly true in hard economic times.

Technology has been a godsend in terms of administrative efficiency and profit opportunities. Unfortunately the other side of the coin is that technology gives power to the people -- to buy what they want, when and where they want it. Today the consumer is truly King. Technology and social media are now being utilized to "commoditize" our products, services, underwriting processes, relationships and knowledge.

Politics, Occupy Wall Street, demonization of selected industries by government, the media and the public, our self-inflicted injuries in the 2008 meltdown and subsequent problems are symptoms.

We sell an intangible -- trust, peace of mind, security. Our industry's credibility has been damaged significantly. Some of this we deserve. Some is guilt by association. Regardless there is significant cost to us. Loss of trust is the disease.

Forget what you know. Look at the marketplace as it will be. Talk to your clients, thinkers, innovators, political leaders, the Gen X and Ys, and other folks that are different from you. Think less about yesterday and more about tomorrow.

Based upon what you learn, carefully study all you do -- ask if each of these functions and activities needs to be done at all? If yes, then ask how can these be done better? Talk less to your peer group and "peer" more into the heads and hearts of the citizens in the marketplace of tomorrow.

Change your language. Ban forever, "the devil's in the detail." Embrace Michelangelo's belief, that "God is in the detail." Know that "Different isn't always better but better is always different (Dale Dauten)." Commit to innovation.

Remember: "the weasel, stalking nose to the ground, never hears footsteps of the hawk" (Andrew Vachss). Your intense focus on your performance (policies/procedures and historical success) may deafen you to the "footsteps of the hawk" and blind you to the marketplace erosion that is "changing the swamp."

August 8, 2012

Copyright 2012© LRP Publications