Are you still hiring “mad dogs”?

I recently spoke to an experienced mortgage executive about an increasingly common problem: the “order-taker” originator. The executive described the following scenario: The producer has an inconsistent sales track record, some months originating three units but most months less than that. Five years ago, the originator made a six-figure income. Today, the individual makes half that amount. The originator was upset about receiving limited processor support since the office processor was assigned to top producers.

The originator said he could originate more loans if he did not have to stay inside the office working the loan and trying to close his production. The manager had the standard “you need to improve” conversations about production performance but nothing changed. Does this story sound familiar?

Many companies are still recruiting this type of “order-taker” originator — someone who cannot bring new business to the lender and relies on the same referral sources for “leftover” business. Prospecting is something they never do.

I call these types of originators “mad dogs.” They fight over a few loans instead of prospecting and expanding their client base. Refinance markets carry them. Unfortunately, order-takers are the norm at many sales organizations.

In 2012, why are mad dogs still in the industry? More importantly, why do companies still hire them when the economics of poor performance is so costly?

Management teams believe mad dogs are experienced and that they will flourish because the new company’s system is better than the competitor’s. The problem is that mad dogs are really order-takers and when the market shifts, their lack of having the right personality characteristics for consultative selling is glaring. No amount of training will improve their performance and having processors dedicated to them does not make economic sense.

How does a sales organization avoid adding mad dogs to their sales team? Establishing and implementing a structured interview process is critical for sales success and ensuring that the best candidates are being brought into the company.

An effective hiring process has three steps:

1. Train managers in the correct hiring process.

2. Use a validated pre-hire assessment to screen out the mad dogs so you are not wasting your time interviewing them.

3. Measure and hold accountable all field managers for their hiring selections.

Unless all three parts are put in place, a sales organization will have high turnover and unsatisfactory LO productivity. When there is no structured selection process, each local branch manager does his or her own thing. The net impact is that mad dogs will rule and companies will be tasked with supporting people who cannot sell. Soaring costs and compliance risks are the result. So, when planning for 2013, management should take action to avoid hiring mad dogs while culling the current sales force of order-takers.