Pat’s Blog

“Precisely because change is a constant, the foundations have to be extra strong.” — Peter Drucker

At a recent speaking engagement, I had two very different conversations that illustrate a growing problem in our industry: lowering our standards of excellence. One firm I spoke with said their average production per loan officer was $1 million which they felt was “pretty good” considering current marketplace conditions. Another company I spoke with averages $20 million per loan officer. When companies lower their standards and “settle for less,” the result is a mediocre sales culture. A tougher selling environment like the one we’re experiencing demands higher performance not lower to ensure success.

“`What is value to the customer?’ may be the most important question, yet the one least often asked.” — Peter Drucker

In my opinion, the most successful financial firms view sales as a process and have adopted a systematic approach to improvement. The first step in any process improvement is to identify how the customer defines value. The reason? The customer’s definition of value changes frequently. What was important yesterday may not be important today. Any potential process change must be held against the litmus test of “What does it mean to the customer?” Will the “improvement” make the customer’s life easier or harder?

“In an ecology, the ‘whole” has to be seen and understood and the ‘parts’ exist only in contemplation of the whole.” — Peter Drucker

When traveling for my consulting business, too often, I see financial firms still using the standard measurement of volume and units to evaluate results. This approach may have been fine 20 years ago, but it is not effective now. Volume and units are short-term measurements which is like looking at a daily stock price of a company which doesn’t really tell you the company’s value and long-term prospects.
Granted, volume and units are easy to deal with but the truth is that calculating profitability is more involved than merely looking at volume. Any sales process approach should be rooted in data to provide the context, in which a sales force gets information, discusses problems, makes their decisions and takes action. Any data collection should be anchored on understanding the parts of the process and how they interact. Parts of the process can be simplified into activities that the sales people perform and the decisions they make and the actions that the customer takes or declines to take.