Spinning Wheels:
How Resistance, Culture, and Assumed Continuity
Interact to Paralyze a Company
Diane T. Keil-Hipp, MOD
Bowling Green State University
Diane T. Keil-Hipp is a doctoral
student at Bowling Green State
University (BGSU), where she earned
a Master of Organization Development
degree in 1998. She is COO at Knight Insurance Group,
an independent insurance agency in Toledo, Ohio, and has
spent over thirty years in the insurance industry. Diane is
currently researching how organizations, specifically small
businesses, counteract the effects of the Spinning Wheels
model.
Author’s
Contact Information:
Diane T. Keil-Hipp, MOD
Doctoral student, BGSU
COO at Knight Insurance Group
Email: dthipp@bgsu.edu
Keil-Hipp
Abstract
This article details the development of a model that
includes familiar OD concepts: resistance to change,
cultural lock-in, and assumed continuity. Through
the examination of behaviors that caused the demise
of once-large companies, a model describing the
behaviors was developed. The Spinning Wheel
model identifies three factors (called C3) that
interact to paralyze a company, causing blindness
to market forces. These factors—resistance to
change, cultural lock-in, and assumed continuity—
spin and reinforce the dysfunctional behavior in
each of them, impeding an organization’s progress.
If these factors go uncorrected, the company’s
existence can be jeopardized. While these factors
have been individually researched, there is little
documentation on their interrelationship. The
model is then applied to small business, an often
ignored yet significant component of the American
economy. This paper will provide a viewpoint that,
in fact, small businesses suffer from spinning wheels
just as do large corporations. The severity is much
the same; only the dollars on the income statement
and employee count are smaller. One particular
segment of small business—independent insurance
agencies—is used to test the applicability of the
model. Through research and first-hand experience,
the author provides evidence of the Spinning Wheel
model’s equally relevant and crippling impact to
small business.
Keywords: Resistance to change, cultural
lock-in, assumed continuity, corporate culture,
small business, blindness to the market, insurance,
insurance agencies, independent insurance agencies,
market forces
_______________
45
 There are countless articles, books, and
editorials about how once-large corporations such
as Kodak and Sears have dwindled to a fraction of
their size or died completely. Companies that once
dominated their industries, all but controlling their
markets, lost their dominance, and ultimately found
themselves fighting for their survival. How did these
once untouchable companies lose their dominance?
Why were they unable to change course before it
was too late? The fall was not quick or sudden
in the case of Kodak or Sears. These companies
seemingly had time to turn themselves around. Yet
they did not act to correct their failings in time to
remain on top.
In researching the academic literature and
practitioner articles, three factors consistently
rise to the top as impediments toward long-term
organization success: resistance to change, assumed
continuity, and cultural lock-in. For Kodak, Sears,
General Motors, and others, these three factors
played a role in the companies’ downturns.
The Spinning Wheel model illustrates the
interaction of the three factors and their impact
on an organization’s ability to react to market
forces. The model is explained in the context of
large organizations, first looking at historically
dominant organizations that are well reported. The
article then addresses the model’s impact on small
business, a segment often ignored by researchers
because of issues related to scale, similarity, and
data limitations. This article breaks through those
limitations by using independent insurance agencies
as the small business segment. Evidence of the
model’s equally relevant and crippling impact on
small business (independent insurance agencies)
is demonstrated, with concluding remarks about
implications for research.
Forbes Top 100 Companies
In 2017, the 100th anniversary of the
Forbes Top 100 Companies list, Forbes Magazine
published an article comparing the original list
to the lists from 1967 and 2017 (Noer & Kauflin,
2017). The changes are staggering. Table 1 shows
that from the 1917 list to the 1967 list, only AT&T
and Standard Oil of N.J. remained in the Top 10.
General Motors rose to the #4 spot, Sears, Roebuck
to #7, and General Electric to #8. Fewer than half
46 Organization Development Journal l Spring 2021
of the companies on the 1917 list existed in their
original form by 1967. This comparative ranking
suggests it is more common for a company to lose
its dominance than to maintain it over the long
term.
Table 1
Forbes Top 10 Companies, 1967
Rank Name Ranking in 1917
1 International Business Machines —
2 American Telephone & Telegraph 2
3 Eastman Kodak —
4 General Motors 34
5 Standard Oil of N.J. 3
6 Texaco —
7 Sears, Roebuck 36
8 General Electric 11
9 Polaroid — (founded 1937)
10 Gulf Oil —
Note. Adapted from “America’s Top 50 Companies 1917-
2017,” by M. Noer & J. Kauflin, 2017, September 19, Forbes
Magazine.
A century later, only two companies—
General Electric and AT&T—survived under their
own names, but were no longer on the Top 10 List.
AT&T was #12 and General Electric #16. Only nine
of the companies in the 1967 Top 50 List survived
into 2017, and only two of them made it to the
2017 Top 10 List (Johnson & Johnson and Exxon
Mobil). Of the companies on the 2017 Top 10
List, five of the top six were less than 45 years old.
And not surprising to today’s reader, the top four
were tech companies: Apple, Alphabet, Microsoft,
and Amazon. There were 11 tech companies on
the 2017 Forbes Top 50 list. To quote Bob Dylan
(1964), “The times, they are a-changin.”
The Forbes lists illustrate how few businesses
thrive over the course of a century. Myriad reasons
can be suggested for those that failed, such as
antiquated products, dated technology, ineffective
marketing, and price competition. All of those
may be true, but behind them is something more
far-reaching—an inability to respond to changing
market forces. Two corporations previously
mentioned, Kodak and Sears were on the 1917
and 1967 lists. These companies dominated their
respective industries for many years; they were
untouchable in market share, brand awareness, and (and countless others). These organizations were
overall sales. Over time, they lost touch with the very busy, following their processes, filling out
market, and then found themselves unable to change their paperwork, sending decisions up the chain of
to current market demands. As a result, these well- command. More importantly, because they were
known names are now shells of their former selves. spinning their wheels, they were blind to the fact
that the market had moved in a different direction.
Table 2 The "spinning wheel" organization will never reach
Forbes Top 10 Companies, 2017 the market’s new destination without a change in its
Rank Name Ranking in 1967 situation.
A dynamic set of factors must be at play
1 Apple — (founded 1976)
over a long period for companies the size of Kodak
2 Alphabet — (Google founded 1998)
and Sears to become spinning wheels. Resistance to
3 Microsoft — (founded 1975)
change certainly comes to mind first as a contributor,
4 Amazon — (founded 1994)
but it is obviously more complex. Other factors
5 Berkshire Hathaway — (founded 1839)
interact with resistance to change, reinforcing the
6 Facebook — (founded 2004)
status quo, and blinding leaders to marketplace
7 Johnson & Johnson 50 (founded 1886)
changes. A dysfunctional culture is at play here—
8 Exxon Mobil 15 (founded 1911)
one that prevents an organization from looking
9 JPMorgan Chase — (founded 1937)
beyond its current successes. While it may sound
10 Wells Fargo & Co. — (founded 1852)
counter-intuitive, highly successful companies risk
Note. Adapted from “America’s Top 50 Companies 1917- arrogance, overconfidence, egotism, and myopia—
2017,” by M. Noer & J. Kauflin, 2017, September 19, Forbes traits that are observable in the corporate culture
Magazine. (Gino & Pisano, 2011). When these behaviors
combine with resistance to change, the organization
This article asserts that the inability is spinning its wheels.
to respond to market forces stems from three The third factor in the model is the concept
interrelated factors: resistance to change, cultural of assumed continuity. This contributes to the other
lock-in, and assumed continuity (introduced in the two factors with reinforcing organizational beliefs
next section as C3). such as, “We’ll be around forever,” or “No one is
worried about our company’s future.” When these
The Spinning Wheels Journey thoughts permeate a company which already suffers
from resistance to change and a dysfunctional
Consider the image of a car stuck in the culture, it can be a deadly combination—a resistance
mud. Without traction, its tires spin but the car to new ideas and innovation, an arrogance and
doesn’t move—it is still stuck in the mud. The myopia about the company’s market position, and
car is expending a lot of energy, but not moving a belief that the company’s future is guaranteed.
forward. Without some change in the situation, the Such a company is very busy spinning its wheels,
car will continue to be stuck in the mud. Hence the fine-tuning existing processes, yet blind to the
metaphor that is commonly used when a person or direction of the market, and unaware that their
group is very busy, but accomplishing very little— survival requires significant change.
they are “spinning their wheels.” Often times, they C3 is used to define this set of three
are blind to the fact that they are spinning their interrelated factors that create a crippling effect
wheels because they are so busy doing their busy inside an organization. C3 comes from:
work—another term with a similar connotation. • Resistance to Change
This metaphor illustrates the Spinning Wheels • Cultural Lock-In
model. • Assumption of Continuity
The image of spinning wheels came to mind The interaction of these three factors creates
when thinking about the commonalities between an environment that blinds the organization to
failing companies, such as Kodak and Sears Roebuck changes in market forces.

Keil-Hipp 47
 Figure 1.

Spinning Wheels Model

Figure 1
Spinning Wheels Model

Figure 1 demonstrates how the C3 factors

is a popular area of focus in the Organization
interrelate and reinforce each other. A resistant-
Development (OD) profession. Many articles
to-change organization has a culture that locks in
have been written about resistance to change
resistance. An organization that assumes its own
over the past 75 years, and yet it still befuddles
continuity will have no reason to change. These
organizations, from front-line employees to C-suite
factors have several characteristics in common,
executives. Concepts such as stability, tradition,
such as slow pace, egotism, resistance, myopia,
and continuity all discourage change. Jick (1990)
and chauvinism (Foster & Kaplan, 2001; O’Toole,
provides a simple definition of a person who is
1995). The organization’s earlier successes, likely
resistant to change: “it describes anyone who
the innovations that propelled the company to
doesn’t change as fast as we do, as well as people
prominence, led to their current state. What first
who seemingly refuse to budge.” (Organizational
made the company successful may not be applicable
Change: A Comprehensive Reader, 2009, p. 412).
today. Market forces move beyond the spinning
Bareil’s (2013) definition of resistance to change is
wheel; the forces that drive the market of the future
“a change-specific behavioral response of a change
will likely be different than the forces driving
recipient such as opposing, refusing, defying,
present-day markets. Future success requires new
rejecting, etc.” (p. 63). It is one of the hardest
and different approaches. But an organization
things to overcome because there are so many ways
spinning in circles cannot see where the market is
and reasons to resist (O’Toole, 1995).
moving. Organizations are groups of people; if people
As stated previously, there is considerable
resist, the organization mirrors their behavior. In
research on these topics as separate, siloed concepts
2003, Prosci, a change management consulting
(Foster & Kaplan, 2001; Jick, 1990; Lewin, 1947;
firm, identified employee resistance as the greatest
O’Toole, 1995; Schein, 1990). An examination
obstacle to a change effort (Vales, 2007). Three
of each factor as well as its interaction within the
of the four primary obstacles to change identified
model follows. by Prosci in its 2012 Change Management
Benchmarking Study involve resistance at various
Resistance to Change organizational levels (Bareil, 2013):
The concept of resistance to change 1. Ineffective change management
48 Organization Development Journal l Spring 2021
 sponsorship from senior leaders
2. Insufficient change management
resourcing
3. Resistance to change from employees
4. Middle-management resistance
Many in the OD field have illuminated this
concept. Kurt Lewin’s Force Field Analysis , first
presented in 1933 (Swanson & Creed, 2014) and
Gleicher’s Formula for Change, first published in
1975 and later modified by Dannemiller Tyson
(Cady et al., 2014) are two resistance to change
models that have stood the test of time, continuing
to guide practitioners today.
Lewin’s force-field theory states that
driving forces for change collide with restraining
forces opposing change. In the center is the present
state or desired state. In order for change to happen,
the present state (equilibrium) must be upset,
either by adding conditions favorable to change
or by reducing resisting forces (Lewin, 1947). In
practice this is difficult to implement. Emotion,
attitude, protectionism, and defensiveness are a
few of the factors pushing and pulling in relation to
the change. This model still resonates today, many
decades later.
The second resistance to change theory,
the Formula for Change, is one of the most widely
recognized organization development tools created
in the last fifty years (Cady et al., 2014). The
Formula for Change, also known as the Paradigm
Shift Model, (Dannemiller Tyson Associates, 2000),
highlights the elements which must be present in
order to overcome the resistance to change:
The existence of these elements in an
organization will influence its ability to change
course, alter strategy, develop new innovations,
and continue to prosper. If DVF do not exist,
resistance will take hold. This resistance plays out
in organizations in five ways: conformity to norms,
Figure 2.
Figure 2
Formula for Change
Formula for change
DxVxF>R
Dissatisfaction with
Vision for First steps
Will overcome factors. But as Figure 1 shows, all three factors
the current state Resistance to
combined with the future toward that Change
future
(Dannemiller Tyson Associates,(Dannemiller
2000). Tyson Associates, 2000) In fact, the two reinforce each other; when there is a
Keil-Hipp
systemic and cultural coherence, vested interests,
the sacrosanct, and rejection of “outsiders” (Watson,
1967).
Consider Kodak in this light. Conformity to
norms means that employees work in an expected
manner. Anything abnormal or out-of-the-ordinary
is disruptive. When one deviates, others attempt to
change the deviant behavior or ostracize the person.
For example, Steve Sasson, a Kodak employee,
invented the digital camera (Mui, 2012), yet he
was ostracized for suggesting that Kodak move
away from film. Sasson was operating outside of
norms. Vested interests, another way organizations
resist change, played out at Kodak, which had a
vested interest in keeping film alive. Suggesting a
technology other than film was a threat to Kodak’s
brand and understanding of its success. Kodak
resisted anything that threatened the status quo.
Systemic and cultural coherence means that
changes in one part will affect another part (think of
departments within an organization). According to
the Gestalt principle, parts of a whole are affected
by their relationships to the whole (Watson, 1967).
Individuals prefer consistency and coherence in
an organization, and when change happens in one
area, “the world” may become unstable elsewhere.
When organizational change results in unpleasant
outcomes—employees are laid off, prior skills
are no longer needed, long-term employees are
bypassed for a promotion in favor of younger, tech-
savvy employees—it is unsurprising that employees
resist the change.
Leaders can also resist change, but the stakes
are often higher and an organization’s existence
may even be at risk. It is the leader’s responsibility
to take action when the organization’s survival is
threatened (Conceição & Altman, 2011). If the
leader is unwilling or unable to lead change, the
organization is facing a serious situation. In the
Prosci ranking, the number one obstacle to change
was “ineffective change management sponsorship
from senior leadership” (Bareil, 2013, p. 60).
Based upon this research, resistance to
change is the first factor in the Spinning Wheel
model, noting its impact in triggering the other two
interrelate. Resistance to change often manifests
itself in organizations with a very defined culture.
49
deeply embedded culture; resistance to any change
to that culture hardens.
Cultural Lock-In
Corporate culture has been extensively
studied and researched, and there appears to be
no clarity on the factors that ensure a positive and
productive culture. A finely tuned corporate culture
is more powerful than strategy, and a dysfunctional
culture, a serious impediment to organizational
success.
Schein (1990) defined culture as the
“pattern of basic assumptions that a given group
has invented, discovered, or developed in learning
to cope with its problems of external adaptation and
internal integration.” Other definitions include:
“Culture is a system of shared beliefs and values”
(Levin & Gottlieb, 2009, p. 32) and the “Social or
normative glue that holds an organization together”
(Smircich, 1983, p. 344). Perhaps none is as simple
and as clear as Burke’s (2018) definition of culture:
“the way we do things” (p. 245). Culture is neither
good nor bad, but it is how an organization lives its
culture that makes it an asset or a liability, strength
or a weakness.
Cultural lock-in is a form of organizational
paralysis that is so ingrained and embedded that
it prevents the organization from responding to
market changes. Foster and Kaplan (2001) define
cultural lock-in as “the inability to change the
corporate culture even in the face of clear market
threats" (p. 43). In other words, an organization that
is captive to its own culture, even when faced with a
threat to its survival is unable to change. When an
organization’s culture is dysfunctional and locked
in, innovation suffers, risk taking is minimized, and
employees demonstrate little passion for their work
and the organization (Foster & Kaplan, 2001). The
organization’s survival is clearly at risk.
Culture lies beneath the surface of written
procedures and processes, documented vision and
mission statements, and corporate communications.
Schein calls culture a pattern of underlying
assumptions, and to understand culture, these
underlying assumptions must be uncovered (Burke,
2018). Unfortunately, employees often cannot
verbalize the assumptions. They are so entrenched
in the culture that employees are often at a loss to
describe them. They permeate everyday behavior
more powerfully than vision, mission, or strategy.
50 Organization Development Journal l Spring 2021
As Burke (2018) points out, these assumptions are
taken for granted, cannot be confronted or debated,
and are therefore difficult to change.
Ironically, start-up organizations often have
a very defined culture, based upon innovation,
creativity, and ingenuity. Start-ups are known for
thinking out of the box and creating something on
very little investment. Over time, successful start-
ups begin to look more like corporate America,
and as they do, the same corporate culture
emerges, often becoming an impediment to future
innovation. If that happens, leaders are responsible
to design and promote a change (Levin & Gottlieb,
2009). Without leaders who are willing to break
the cultural lock-in, the organization will begin to
languish in its daily operations, and become blind
to market forces.
General Motors (GM) in the late 1980s is a
good example of this. GM lost 17% of its market
share from the early 1970s to the late 1980s. The
then-CEO, Roger Smith, grew up in the company.
He knew that change was needed in many areas—
quality improvement, union cooperation, reduction
of layers within the company—but he was so much
a part of the existing culture that he could not drive
the change. The change initiatives were in his
head, but not his heart (O’Toole, 1995). Under his
leadership, GM was a victim of cultural lock-in.
Sears and Kodak also suffered from cultural
lock-in. Both were inward-focused rather than
market-focused. According to Katz (1988), in the
1980s, the Sears Tower in Chicago employed only
managers who had been promoted from the inside.
This inbred culture did not promote outside thinking.
In Kodak’s case, the company’s leaders were not
open to change (Mui, 2012). Ironically, Kodak’s
founder, George Eastman, adopted disruptive
photographic technology on two occasions in his
years building the company.
Assumption of Continuity
Most of America’s top corporations have
operated under assumed continuity for years. The
top corporations (General Motors, Sears, and Xerox)
on the 1917 and 1967 Forbes’ lists were bellwethers
of America. Assumption of continuity means that
the corporation’s own continuation is expected.
The attitude is, "Of course, we’ll exist—we’re too
big to fail.” Under this form of corporate egotism,
the organization focuses on its operations, not on innovate. It feels better to protect a beloved brand
innovation or creativity (Foster & Kaplan, 2001). than to cannibalize it. All of these choices promote
Over time assumed continuity leads to increased blindness to market forces.
layers of bureaucracy, an elevation of certain When an organization does not respond to
protocols and procedures under the mantra of a changing market, its competitors or new entrants
“that’s the way we do it around here,” continuation often will. The market embraces competition and
of silos when collaboration across the organization change, which is why it lies beyond the spinning
is needed, and control processes taking priority over wheel of C3 factors. Resistance to change, cultural
innovation and creativity. lock-in, and assumed continuity are the antithesis
Certain behaviors signify the existence of of market forces. Companies that are victims of the
an assumption of continuity: an organizational ego Spinning Wheel model experience defensiveness,
that blinds management to reality, a satisfaction dysfunction, egotism, control, status quo, and
with the status quo, and chauvinistic actions resistance (Foster & Kaplan, 2001). These are in
(O’Toole, 1995). As the model demonstrates, opposition to the behaviors that the market favors—
assumed continuity interacts with both resistance to discontinuity, disruption, divergent thinking, and
change and cultural lock-in. When it interacts with innovation.
cultural lock-in, resistance to change is significantly Kodak is an example of an organization
increased. Slow pace and stifled ideas result that became blind to the market. Kodak invented
from assuming that current practices will assure the digital camera, yet it closeted the invention
the organization’s continuation. The inability to because it mistakenly believed it controlled the
respond to the market leaves the organization in market. Kodak was blind to a market where
a very precarious, often uncompetitive, position. picture taking did not require film. As late as 2007,
Ironically, Sears’ corporate executives used to say, Kodak published a marketing video hailing film
“All we need to do is do what we do a little better,” and denouncing digital (Mui, 2012). Because the
(Katz, 1988). leadership remained in denial about what was to
become the biggest disrupter of its corporate life,
Blindness to Market Forces they did not realize the criticality of changing the
culture and shifting to a new paradigm. Kodak
The C3 factors cause blindness to changes filed for bankruptcy in 2012, and today are a much
in the market, which restricts innovation in smaller company.
organizations. Blindness to market forces is the
inability to see how the market is changing and Applicability to Small Business
where the market is moving (Foster & Kaplan,
2001). The market is unforgiving, disloyal, ruthless, Following the chronology of large businesses
and fast-moving. It does not slow down so that a is not difficult. Household-name companies get a
bell weather company can catch up. It does not lot of attention from pundits, the media, business
care about legacy, history, controls, or processes. It analysts, consultants, and academia. From their
demands competition, creativity, and innovation. stories, researchers can analyze their missteps,
Once established, organizations tend to test hypotheses, and hopefully learn from them.
focus on operating efficiently rather than evolving However, it is less common to see attention paid
quickly. Consider Kodak’s production of film to the rise and fall of small businesses and one
and paper. The design of film and paper was can understand why. The smallest Mom & Pop
done long ago; their focus was on manufacturing shops may not be run by qualified business leaders.
those products as efficiently as possible in order to Perhaps the small business was never created with
maximize profits. For this reason, being blind to the intention of long-term existence. Perhaps the
market forces—or at least blurry-eyed—is an easy business was really just a hobby. Some would
trap to fall into. It is easier to drive efficiencies into say that analyzing these types of small businesses
a widget-making process than to create a whole offers little-to-no gains to academics or business
new widget. It is easier to shave costs than to practitioners. Yet, small business represents over 85

Keil-Hipp 51
percent of the economic impact in the United States 2018, there were nearly 350 (Nockengust, 2019).
(USSBA, 2018) and many are run by qualified These numbers are evidence that an industry with
business people who have a long-term vison. a reputation for owner stability is experiencing
Clearly there is value in studying small businesses. unprecedented change.
Small businesses are not immune to the Agency owners have sold their businesses
Spinning Wheel model, however. The severity is rather than continue for a variety of reasons: “The
much the same as for large corporations; only the sale price was phenomenal,” “My kids didn’t
dollars on the income statement and employee count want to be in insurance,” “I had no one to take it
are smaller. This paper will consider one industry over,” “I was ready to retire.” Much like the large
segment filled with small businesses and show how corporations addressed earlier, these reasons are
the Spinning Wheel model can apply there also. really symptoms of a larger problem. In many cases,
the reasons are related to the components of the
Independent Insurance Agencies: A Primer Spinning Wheel model. The next section examines
Independent insurance agencies are each of the factors in relation to independent
quintessentially American. Historically, these insurance agencies (IIA).
agencies were established and run by families,
often passed down from one generation to the IIA Resistance to Change
next. The term, independent, is key. It indicates Recall that in the Prosci ranking, the major
that the agency is not controlled by an insurance obstacle was “ineffective change management
carrier, unlike State Farm or American Family sponsorship from senior leadership” (Bareil, 2013,
agencies. Those agencies represent just one carrier, p. 60). In a small business, “senior leadership”
they utilize the technology provided by that carrier, is the owner(s). Small business owners have
advertise that carrier’s brand, and have a contract everything invested in their companies, and their
that requires their client list to be sold back to the personal finances are linked to the business’
carrier upon retirement. In contrast, independent success. They often have an entrepreneurial spirit,
insurance agencies represent numerous carriers which is contagious among their employees. But
and select a carrier’s policies based upon clients’ when the leader experiences any of the C3 factors,
needs. In this way, the carrier is a vendor to the those behaviors quickly permeate the organization.
agency, earning its business one policy at a time. Why are small business leaders resistant to
Not only do independent agencies make carrier change? James O’Toole (1995) provides a list of 33
choices, they make all the business decisions that of the most common hypotheses about why people
every small business owner has to make, in areas resist change. Table 3 lists eight of these with an
such as advertising, hiring, training, technology, insurance agency commentary.
procedures, etc.
In 2018, the industry trade association, IIA Cultural Lock-In
Independent Insurance Agents & Brokers of
America (IIABA) estimated the total number “To survive for more than 100 years, you have
of independent agencies to be 36,500. Of those, to be willing to adapt to change, both external
35% have less than $150,000 in revenue and 2% change that is forced on you and internal change
have more than $10 million in revenue (Agency that you force on yourself.”
Universe One Study, 2018). These agencies write F. Christian Wright IV, President
57% of all property/casualty premiums (Simpson, Wright-Gardner Insurance, Inc.
2015). Contrast that with 1996, when there were (Boone, 2019, p. 57)
44,000 independent agencies across the United
States. Over 23 years, the industry has experienced The culture at any given independent
a net loss of 7,500 agencies. Industry observers insurance agency is as unique as the firm itself.
have watched agencies merge with larger agencies, And like many large corporations, it often starts
go out of business or sell entirely. In 2005, there with a strong founder. When the agency is a family
were two acquisitions by private equity firms; in business, the desire to perpetuate the founder’s

52 Organization Development Journal l Spring 2021

Table 3
A Partial List of O’Toole’s (1995) Root Causes of Resistance to Change as Related to Insurance
Agencies.

Hypothesis (O’Toole) Insurance Agency Commentary (Hipp)

Lack of ripeness. Change occurs when certain

preconditions have been met. Such conditions The agency prefers life as it was 25 years ago.
are rare and cannot be forced.

Fear. Humans have an innate fear of the

The digital world (and the evolution of artificial
unknown. We prefer to take our chances with
intelligence) scares some agency owners.
the devil we know.

Lack of self-confidence. Change threatens our

With the median agency owner age at 55, there
self-esteem. New conditions require fresh skills,
are a lot of new conditions that require fresh
abilities, and attitudes, but we lack the confidence
skills.
that we are up to the new challenges.

Future shock. When people are overwhelmed by

major changes—as they are in modern society— The magnitude of market changes caused by the
they hunker down and resist because the species digital world can be very overwhelming for some
is capable of only so much adaptation. agencies; it is easier to stay with current practices.

Lack of knowledge. We do not know how to

Agencies that do not invest in IT and marketing
change (or what to change to). Ignorance and
will not reap the benefits of such tools.
faulty analysis get in the way of effective change.

Myopia. Because we cannot see beyond the tips Leaders are too busy selling or servicing to spend
of our noses, we cannot see that change is in our any time thinking about the ‘big picture’.
broader self-interest.

Chauvinistic conditioning. The way we do it is

right; they are wrong. And if you are one of us This is often caused by cultural lock-in and
and you advocate what they do, you are disloyal. tenured staff.

“It’s the way we’ve always done it,” is frequently

Habit. ‘The principle of continuity of experience.’ heard among insurance agencies.

Note. Adapted from “Change Resisted: Thirty-Three Hypotheses Why,” by J. O’Toole, 1995, W. Burke, D. Lake, & J.
Waymire Paine (Eds.). Organization change: A comprehensive reader (website).

Keil-Hipp 53
legacy is often paramount. If culture is a system of
shared beliefs and values, “the way we do things”
(Burke, 2018, p. 245), then how the agency operates
flows from those beliefs and values. How the agency
does everything—from answering the phone, to its
client response time, to its underwriting quality—
flows from its culture. For example, if the agency
has a leader who is not tech savvy, then it is likely
the firm has not embraced the latest trends in social
media. Without social media, the agency will miss
connecting with prospects and clients. Likewise,
if there is no consequence to salespeople who do
not reach their sales goals, then the culture becomes
one of sales mediocrity, and the agency’s revenue
will stagnate.
Recall the change formula, DVF >R, and
apply it to the owner/leader of a small business.
The leader’s satisfaction with the culture determines
whether cultural lock-in has or will occur. If the
leader is not dissatisfied with the current state, he or
she will not be interested in creating a new vision
for the future or taking some first steps. Resistance
will prevail, with little hope of changing the culture.
Cultural lock-in is almost certain to occur.
Cultural lock-in is just as crippling to a
small- to mid-sized agency as to a large corporation.
An agency paralyzed by its culture may believe the
service expectations of yester-year to be adequate
today. Insurance agency owner, F. Christian Wright
IV, said it best. “It used to be accepted practice to
respond to clients with answers in a week or a few
days. Now, if you don’t respond within minutes
or by the end of the business day, clients will think
you don’t care and will move on to another agent”
(Boone, 2019, p. 57).
IIA Assumption of Continuity
Prior to the advent of the internet, provider
choice was limited. A consumer would look in
the phone book and call the local agent. Proud
family employees sat at their desks and waited for
the phone to ring. And because “everyone needs
insurance,” there was enough business to go around
among the local competitors. Many agencies
are still generational businesses, so assumption
of continuity can be very high, even within the
communities they serve.
Assumption of continuity also manifests
itself in carrier representation. Carrier relationships
54 Organization Development Journal l Spring 2021
with independent agencies are based upon contractual
agreements whereby each party has obligations.
Either side may find reasons to sever the relationship,
per the contract. A few years ago, a carrier made
the difficult decision to sever relationships with
some agencies that were not performing to its
expectations. Many of these agencies had 50 to
100-year relationships with the carrier. Because
the relationship was long, the agencies assumed it
would always continue, regardless of performance.
When those relationships were severed, the agencies
were shocked. Assumption of continuity blinded
the agencies to the possibility that the carrier
relationship might not last forever.
Assumption of continuity leads to resistance
to change at agencies too. If an agency is confident
it will be around another 50 years, it is unlikely to
be concerned about changing its business model to
stay relevant.
IIA Blindness to Market Forces
At large corporations, the C3 factors spin
into each other, causing the organization to be blind
to market forces. In independent agencies, the
same occurs. Resistance to change, cultural lock-
in, and assumed continuity spin around, reinforcing
the other, preventing the agency from seeing what
is really going on in the market. Like every other
industry, the insurance marketplace is changing
rapidly and insurance agencies must be able to
move in new directions as dictated by the market.
As in every industry, the internet has
changed how people get their insurance information
and purchase products and services. Today, people
watch YouTube videos to educate themselves about
insurance coverages. They scan insurance websites
for information on carrier ratings, and usually buy
insurance online, never speaking with an agent. For
several years, industry consultants and carrier CEOs
have been forecasting the demise of independent
agencies:
• A 2013 report by McKinsey claimed
that local independent insurance
agencies would soon be extinct
(Jergler, 2013).
• Industry analysts warned agencies who
were not embracing the digital world
about their long-term viability.
• An industry leader suggested that
 mergers were the only way for smaller
agencies to survive (Simpson, 2015).
• On the news of Google’s entry into
insurance, a respected insurance carrier
CEO stated that independent agencies
should be very scared (Simpson, 2015).
Unfortunately, some agencies are blind to
the changing market. A study in 2018 (Agency
Universe Study) found that 25% of agencies
surveyed had never used Facebook; 60% had not
set up a Google+ account, and 79% were not using
YouTube. The inevitable outcome for agencies
that cannot or will not embrace the technological
changes in their market has to merge with or sell to
an agency if they wish to survive.
The insurance industry and how it is
distributed is changing. Those agencies that
embrace the changes, get in front of them, and
make themselves relevant to clients will remain
competitive. Those agencies that are spinning their
wheels will be left behind by the changes in their
industry.
An example of an emerging industry
change is seen in the sharing economy—renting
transportation that people once owned. In big
cities, people rent scooters, bikes, and even cars on
a by-the-minute basis. These people see no reason
to own a car and incur the expense of a monthly
payment, gasoline, parking fees, and insurance.
Since personal home and auto insurance represents
46% of the average agency’s revenue, this market
trend must be acknowledged and the implications
addressed by both agencies and carriers.
Those independent insurance agencies who
today are not spinning their wheels are embracing
digital opportunities to interact with prospects and
clients. They offer 24/7 service online, and respond
to clients via text, email, the web, social media, and
cell phone. These agencies are also acquiring the
agencies that are resistant to change.
Implications for Research
This article has introduced the Spinning
Wheel model and shown how it relates equally
to small and large businesses. Further research
is needed to better understand the similarities and
differences. Conducting interviews within small
businesses, for example insurance agency owners,
Keil-Hipp
would provide an insight on how small businesses
react and respond to C3 factors as compared to large
corporations. Given the large percentage of business
in this country that falls under the umbrella of "small
business," this would be valuable information.
Implications for Practice
Insurance agency owners and consultants
working in the small business field are typically
pragmatic in nature, so it would follow that they
would want an answer to the question, “How is the
Spinning Wheel model relevant to my business?”
A worthy question. In the words of Kurt Lewin
(1943), “Although we need theory, we will have
to watch out that theory never breaks loose from
its proper place as a servant, as a tool for human
beings” (p. 118). Business owners are good at
reminding academics of theory’s proper place, and
with that reminder, here are some thoughts on how
this model has implications for practice.
This article asserts that the Spinning Wheel
model affects small businesses as significantly as
large corporations. Small businesses that suffer
from all three factors struggle to increase revenue,
maintain existing clients, and/or employ the best
and brightest. For these firms, mere survival in
today’s economy is at risk. What is a business to
do? The first problem to overcome is the leader/
owner’s inability to see the business objectively
and recognize that a problem exists. By definition,
cultural lock-in and assumed continuity tell us
that this could be an insurmountable obstacle.
Resistance to change, if deeply engrained, will
cripple the business from being able to make a
change. The business may be destined to sell or die
a slow death unless the C3 factors can be identified
and first steps for change are taken.
This is the opportunity for a serious look
in the mirror and where the Spinning Wheels
model can be a diagnostic aid. Identification is
the first step toward a solution. Through a series
of diagnostic questions, small business owners
could measure themselves against the C3 factors. A
Spinning Wheels diagnostic questionnaire would
provide that pragmatic tool many business owners
are demanding.
This is just one idea for future development
that would apply an academic model to real-world
55
scenarios and offer a framework for impactful
discussions that guide small businesses to success.
Conclusion

This article shows how resistance to change,

cultural lock-in, and assumed continuity (called
C3 factors) create blindness to market forces. The
Spinning Wheel model illustrates how the factors
interrelate, reinforce each other, and prevent
an organization from changing to meet market
demands. An organization’s ability to innovate
and maintain relevance in the market is severely
hampered if it falls victim to the C3 factors and may
jeopardize its survival if left unchecked.
The Spinning Wheel model affects small
businesses in the same way as major corporations.
Independent insurance agencies were used as a case
example of small businesses, and each of the factors
applied, based upon the first-hand experience of the
author. These factors have an equally crippling
impact on an independent agency’s ability to
survive in today’s economy, prohibiting it from
increasing revenue, maintaining existing clients,
and employing the best and brightest. Small
businesses that can identify the Spinning Wheel
model at work in their organizations have taken
the first step toward addressing the issues that are
preventing them from recognizing and adapting to
the changing market.

~~~~~~~~~~~~~~~

56 Organization Development Journal l Spring 2021

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