In today’s post we discuss Alibaba’s revenue rise and explain why you need to make the necessary changes to achieve revenue growth even when your insurance agency is commercially successful.
Alibaba Group Holding Limited, a Chinese e-commerce company, reported a significant rise in revenue on Thursday May 7, 2015. Its revenue soared to $2.8 billion, which was a dramatic increase from March 31 when its net profit was a disappointing $463 million, down 49 percent from the same period a year earlier. Alibaba delivered more good news when it announced that Daniel Zhang would soon replace Jonathan Lu as the company’s chief executive. The company’s founder Jack Ma made the decision after promising employees the previous week that he would address inefficiencies in the company. Fellow colleagues hold Daniel Zhang, who has been at Alibaba for eight years, in high esteem for his public speaking, charisma and his cosmopolitan management style. This will not be the only change made to staff at the company, as several other Alibaba leaders will delegate some of their work to younger executives so they have greater responsibility and gain new skills. Mr. Ma highlighted that more than 95 percent of the management team was born in the ’70s and ’80s, which he believes is important in order to make the company more dynamic and profitable.
There was a positive market response to these two announcements. Shares increased from $68 to $86, which was great news for the company, whose shares had steadily declined from a November peak of $119.15. The main reason for this was its involvement in a public disagreement with a Chinese regulator over fake items on its shopping sites. This was combined with a disappointing performance last quarter when it missed revenue targets. Jack Ma has brought the company back into profitability and is more focused than ever on beating the company’s biggest rival, Tencent. During his speech he renewed his commitment to “making it easier for customers to do business across the world.”
It is easy to become complacent when your company is doing well, but you must remember that your competitors will always be looking for ways to attract your customers. You need to make sure that your insurance agency is dynamic and finds the best combination of competent managers who are fresh faces with new ideas. This idea is commonplace in all successful businesses. However, a great deal of independent insurance owners fail to grasp the basic concept of fresh faces and new ideas. We often get a chuckle about a client who bragged that one their employees had been with the agency for 65 years.
It is sometimes difficult to make dramatic changes especially if not everyone on your team agrees with your plans. You need to describe your vision for the company and explain how these changes will improve the company’s value and greatly increase its revenue. Nobody wants the business to just be chugging along. Most good employees are motivated by their desire to see the company significantly outperforming competitors. It is important for everyone to put their heads together to achieve this goal. It is not only paramount for your insurance agency’s short-term plans but also for its long-term goals. If you plan to sell your insurance agency, then you need to build a high-value business that potential buyers will view as a “premium agency.” There is no better way to achieve that premium value than to have an agency that is growing and who is viewed in the market as one that seeks new ideas and strategies on behalf of its clients.
