Stupid is as Stupid Does

Forrest Gump may not have been smart but he was wise. The title character from the 1994 blockbuster film listened to his Momma.

By Michael G. Manes

Dictionary.com defines stupid as "lacking ordinary quickness and keenness of mind; dull." There are many other definitions. Below is an experience that, in my opinion, demonstrates "stupid."

It was a week or two following Hurricane Katrina. About 600 evacuees had found their way to New Iberia, La. Half were housed in local community centers and others were living on the economy. Most of these folks had lost all they owned or feared they had. Tensions were high and frustration was great.

At the request of Mayor Hilda Curry, I facilitated a meeting allowing evacuees to vent their frustrations. Representatives from FEMA, the American Red Cross and our local office of Emergency Preparedness attended. The questions asked were appropriate and reasonable. The only answer given was to call a 1-800 number (which was not working at the time).

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Finally one evacuee articulated his frustrations in a short concise statement. The local Emergency Preparedness director responded: "sir, you don't understand my problems." I stepped between the two (which may have been stupid on my part) and explained to the Emergency Preparedness director, that it was not his job to understand your problems. It's your job to address his, I said.

"Stupid is as stupid does."

I offer the following quick examples of stupid so that y'all don't think this is a condition limited to FEMA, the Red Cross and the people in Louisiana.

In the 1970s, GM and its dealers were concerned about reaching 65 percent market share. If this happened it was feared that the Fed would break GM up into separate corporations: Chevy, GMC, Cadillac, Oldsmobile and Pontiac.

The good news is that GM remained one company. The bad news is that GM ultimately went into bankruptcy and for the first seven months of 2012, its market share was 18 percent, according to Forbes. Still the company may be headed for bankruptcy again. I assure you it will be if GM doesn't build cars that consumers want and can be purchased at a price they are willing to pay.

Look at most business failures and you'll find companies more focused on their problems than on the problems of their customers. Simply stated they continued to build or sell what is comfortable for them and not what the market demands. Or they continue to charge more than the market is willing or able to pay.

Personal lines sales are changing. Direct writers currently dominate. Distribution through banks and direct competition by carriers will grow. Auto insurance is just the start. Streamline your agency to do more for less commission.

In the shadow of Hurricane Sandy and the new "cat modeling" understand that homeowners insurance will be the next unaffordable offering in our industry. Carriers can choose to innovate, agencies can choose to streamline or the marketplace will demand government intervention. The government is newly empowered by healthcare reform and will accept the homeowners market as its next grand adventure.

December 11, 2012

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