The Agent Alliance, a consortium of 16 telecom agencies, has dropped its volunteer-based management structure in favor of a full-time paid staff, including a CEO. The group has tapped alliance member company ARG to provide management services, including the leadership of its president Bill Power as the alliances new CEO.
The groups part-time executive director Ernie Kellys contract ends in May. His administrative role will fall to Power and support staff at ARG.
Power has divested his responsibilities (not ownership) at ARG to take on the role, which marks a significant change for the consortium, which over the years has evolved from a networking organization to a buying consortium. Kelly was pivotal in helping manage the initial transition, Power said.
The alliance really did grow to be a business, said Agent Alliance President Ben Humphreys, president of COMTEL Communications, explaining the need for the change to a commercial leadership structure. He added that the alliance itself holds $50 million to $60 million in five carrier contracts.
In addition to bringing on a CEO, the group is considering changes to its elected leadership, said Humphreys. Last year the group empowered its seven-member executive committee to make decisions. Humphreys expects that to continue. The group also is considering two-year terms for committee members. If that change to the bylaws is approved at the alliance meeting in March, then Humphreys likely will stay on as president through 2008.
Humphreys said the need for the CEO became apparent to him when he took office last March. By April 15, I was screaming, Uncle!, he said, noting that it became immediately clear that the group was leaving opportunities on the table. In the volunteer format, we could manage fires, but we couldnt go be offensive as a unit.
Humphreys lead the initiative to change the leadership of the group and felt strongly that an effective CEO be an insider someone that not only knew what it meant to run an agency, but also someone who was familiar with the members. I felt we needed him to hit the ground running instead of taking six to eight months to get comfortable, Humphreys said.
Power is a past president of the Agent Alliance and also one of the founding members of the group. In addition, his resume includes 15 years in association management, so he brings translatable experience to the new post. Power says ARG has spent the past few months reorganizing to free up Powers day-to-day responsibilities for the agency in order to focus exclusively on the alliance business. His efforts began in October, but the management contract was signed in January and began Feb. 1.
Power credits the alliances contract with TNCI as the catalyst for this next step, saying that it opened the members eyes to the potential opportunity. The alliance signed what it called a ground-breaking contract with TNCI last March. It has been in production mode for the past four or five months. Power has been on-boarding the member companies with the carrier since 13 of the 16 are new agents for TNCI.
If successful achieving the goals of the contract, Power says it could literally change the face of the alternate channel. What he means is that it can offer a blueprint for a true partnership between carriers and agents by showing how such a collaboration can be lucrative for both parties. Imagine if in two or three years, we can show how collectively we have had success putting business on and keeping it on in an environment of true partnership, he said.
In particular, he hopes that it will usher in a change in the common compensation structures commission plus bonus to include more substantial financial incentives for billing based growth. I dont what to leave the impression that its all about our compensation, he added. Its more about what, through a cooperative partnership with a production channel, a carrier can achieve.
Realizing the benefits of the TNCI contract is a primary goal for Power, but he also will be the liaison with the alliances other carriers except Qwest, which will be managed by Humphreys as it has been over the years.
In addition to carrier relations, Power will be charged with looking at other ways to coalesce functions common to the group like health insurance or back-office systems. These are among the many ideas the alliance has discussed over the years that have not materialized under the volunteer-based format, he said.
The management contract with ARG includes a monthly fee and performance-based bonuses. This, in addition to the benefits ARG receives as a member, are incentives for Power to realize the groups goals. The annual contract renews automatically and is expected to be multiyear.
The alliance does not have a membership recruitment goal, but Power said that it must increase its production either through its existing members, adding more subagents under existing members or by bringing on new members.