Remembering Dick and Myra Larkin - National Association of ...

featureThe Road Ahead –Canada Here We Come…BY NANCY AND JIM FISHThe recent company announcementfrom Joe Richardson regarding thework in Home Office to “transform theorganization” is filled with informationyou need to know. Pay attention, becauseyou’ll have to read between the lines tosee the agent’s true role in the company’sgrand plan.Unsatisfied with its agency model forclose to three decades, the company isnow touting its “Ideal Agency Model”as the best thing since sliced bread forthe Allstate agencies of the future. Anyagent with a memory will recall themany makeovers of the agency model.From the booth, agents would be promotedto NSOs or LSOs and the oldtimerswould be sent home to work asGAs. These were mostly agents underthe R830 contract. Then, in its first bigcost-shifting move, the company introducedthe Neighborhood Office Agency(NOA) model, which gave agents a tasteof entrepreneurship, but saddled themwith a cost-sharing program that wasburdensome for many. By this time, thecompany had introduced the R1500 contract,but allowed R830 agents to keeptheir existing contracts.The EA program started around1990. And while the program has continued,agents have endured many changes,few of which have been beneficial. In theearly days, back when the vast majorityof agents were still employees, convertingto the EA contract was not a slam-dunk.Agents actually had to “qualify” for theprivilege to convert. Looking at it from acorporate point of view, this requirementmade no sense at all. After all, EAs payfor everything themselves, a huge savingsfor Allstate. Then one day, a lightbulb came on in the head of someone inHome Office. “Think of the cost-savingswe could realize if we converted moreagents to the EA contract,” one canimagine senior managers saying. Thisrealization then led to an ingenious, butmuch more diabolical plan. “Let’s fire theemployee agents and force them to takethe EA contract. We’ll bamboozle theminto thinking they’re independent contractorsand then, when they’re least expectingit, we’ll start treating them moreand more like employees again. We’lllook like heroes on Wall Street and thinkof the bonuses we’ll earn,” is a sentimentyou might have heard from senior managersat the time. This plan, known asPreparing for the Future, was rolled outin November 1999 and the mass conversiontook place on July 1, 2000.While Allstate agents still operateunder the EA Agreement, it has steadilydevolved since it was introduced in 1990.For one thing, the TPP was fixed at 1.5times annual commissions and guaranteedin the contract. Since late 1999,however, the TPP is no longer part of theEA contract. It has been moved over tothe Supplement, which means it can bechanged or eliminated at any time.Other changes followed. In the beginningany Allstate agent was “qualified”to buy a book. Today only a handful ofagents in any given region qualify. At first,no satellite offices were allowed. Later onthe company demanded that any additionalagency be purchased as a satellite.Early on, these satellites had to be withinclose proximity to the agent’s main location.A while later, any new satellites hadto have “a different market reach” than theprimary location in order to be approved.For a long time, mergers of satellite officeswere not allowed even though it madeeconomic sense for many agents. Thenalong came the Multi Book Location Testin which agents could merge the physicallocation of two offices, but still had tomaintain two agent numbers and two setsof Expected Results.The preceding are just a few examplesof wishy-washy management decisions24 — Exclusivefocus Summer 2009