When Producing Managers Won’t Coach

During a recent discussion, a mortgage banking executive brought up how difficult it is to get producing managers to coach LOs. More often than not, producing managers are top originators whose production is critical to branch and corporate results. With the other originators in the branch at either average or below-average, the financial reality is that the producing manager’s volume is essential to the branch’s existence. In a market with strong origination results, what executive wants to rock the boat by shifting to a non-producing manager structure? For middle-tier companies, it is almost impossible to succeed with a non-producing manager structure because of the expense incurred supporting a non-producing manager.

To quote a familiar strategy in the consulting world, there are only four ways to handle a problem:

1. Define the problem and take action. This can be risky in the short-term especially when the market is volatile.

2. Change your perception. Executives often believe that developing coaching and recruiting skills are not worth the effort but actually the opposite is true. Coaching and recruiting are a manager’s most critical responsibilities.

3. Accept the situation. Companies settle for this option because the producing manager’s results are so very important.

4. Stay miserable. Management chooses to “look the other way” because recruiting at the branch-level is difficult.

For a variety of reasons, management teams tend to choose options two through four and as a result, the situation does not improve. While these options may seem wiser (or easier) in the short-term, the long-term ramifications of not handling the problem can be significant.

What does current research say on this topic?

In a recent study, two Stanford University professors explored the value of first line managers (FLMs) and reported that good FLMs are better than bad managers. Not very surprising.

However, the Stanford professors noted two other important findings: (1) the main impact of an effective FLM comes not from motivating the staff, but from teaching better work methods. Teaching or coaching is the biggest component of effective supervision. (2) the most beneficial combination is for effective FLMs to supervise the best workers. Why? Because the best workers increase their volume so much more when working with top FLMs. Poor managers with adequate production do greater harm to high-potential LOs than below-average producers because these individuals have the greatest potential to improve.

In the meantime, the best strategy for companies with a “producing-manager” model is to structure coaching and recruiting efforts and provide managers with tools that help them perform more efficiently.

First, coaching tools should focus on a detailed system with particular attention to how content is delivered. Outsourcing coaching can be problematic because managers don’t reinforce sales skills when they have no ownership of the coaching topics. As a result, we are developing a new web-based coaching checklist that should be available early next year.

Second, assessment tools that help managers identify the behavior and sales skills needed for success are vital. Why make the producing manager guess why the LO is not producing? Today, web-based questionnaires provide scientific analysis of the problems and possible solutions. (I would be happy to discuss what my company has developed in this arena). Asking the producing manager to solve coaching and recruiting issues while they are originating is largely why senior managers do not see coaching being completed.