Tensions – Good, Bad And Ugly

Tensions – Good, Bad And Ugly

Laura L. Nash’s book “Believers In Business” is about resolving the tensions between Christian faith, business ethics, competition and definitions of success.

The book which is based on interviews with successful business people who are Christians, gives interesting and invaluable insights into seven tensions, namely:

1. The love for God and the Pursuit of Profit
2. Love and the Competitive Drive
3. People’s needs and profit obligations
4. Humility and the Ego of success
5. Family and work
6. Charity and wealth
7. Fruitful witness in the secular city

I like the choice of the word “tensions” to describe the competing demands of faith versus business.

There is good tension and bad tension, The right tension of a racket or guitar strings delivers the right shot or music. The tension caused by anxiety and worry is a bad tension that can cause sickness and failure.

There are many instances of tension and hard choices. An employee who informs you that she is pregnant and has a weak womb and she is advised to take leave often during the pregnancy period to protect the baby – how do you react? Her work will be affected, her colleagues will have to bear her workload and she will be on maximum sick leave and possibly hospitalization leave. The loving thing is still to carry her, but it will be costly and will require the cooperation of all.

An employee who informs you she is undergoing treatment for an illness that will likely affect her work. The loving thing is to pray for her and support her and hope she recovers.

Commission-based advisers ask for better terms but which would affect the bottom line. The loving thing is to see what can be done and to be as fair as possible.

A manager who asks for better overriding over his advisers’ production. Improving the terms would affect the compensation for others. The loving thing to do is to be as fair as possible and try to save on other costs so that there will be profits to share.

Just as managing tension can produce good, balancing the competing interests of different parties can bring about the common good. It requires maturity and love and humility to recognise that.

If one gets more from the pie, others get less unless the pie gets bigger – the zero-sum game. The answer then lies in increasing the size of the pie.

Many years ago, I was given an ultimatum by a small group of advisers who wanted to get higher compensation for their production. There was nothing wrong with their making this request. I explained the situation and encouraged them to increase their sales, but to no avail. They left, but years later when they started their own business, they realised that what they were given then was pretty good.

The cost of running a business is often underestimated by those not in the know. I often tell my clients while our service is free, it is costly to make it available. For the record, an independent financial adviser has to bear all the costs of running his business, which the agency managers in insurance companies don’t have to, because the cost is borne by the insurance companies.

So why are IFAs willing to bear the cost which runs into millions per year? Primarily to give choices to clients, so that they can obtain fair and competitive products.

Tied agencies are the most expensive way to obtain business for insurance companies compared to IFAs and banks. Why then do insurance companies still have huge agencies? The answer is CONTROL. They can ensure that their own products are sold by restricting their agents from selling the products of other companies.

The business which IFAs bring to insurers is FREE of overhead expenses. The tension is between supporting their own agents (and exercise control) or depend on IFAs but having to leave the recommendation to them.

The player who holds the key to this tension is the customers.

They are the ones who can benefit from the tension by making insurance companies compete for business by going through IFAs.

With better competition and choices, there will bound to be improvements in products, servicing and claims payment.