It’s Not Rocket Science!

During recent visits with lenders, the number one question I am asked is “How can we improve our sales team’s results?” In my opinion, there are only three things that change sales results — everything else is fluff. If you are serious about having better results, you need to implement these strategies today!

One of our long-term clients (a top 15 lender), who averages 300% better sales production per LO vs. their competitors and peer group, commits to three core strategies. The lender doesn’t have the best pricing, the greatest technology or non-traditional products — the typical solutions managers turn to when production is weak. This lender has been consistently successful through good production markets and bad. So what are they doing?

1. They hire quality originators and have standards in the hiring process.
2. They require coaching to be delivered by their managers and measure that the manager is doing it. A manager must be a good coach because a manager’s job is to develop their staff.
3. They are serious about performance standards. Everyone’s results — I mean everyone — are measured and if employees fall below the budget goals, they are systematically removed. Even if the originator is a long-term employee. Standards matter.

What is the common thread of these strategies? It’s all about people management and leadership. Pricing and products can only get you so far. At some point, the competitive advantage always comes down to the quality of your employees.

All managers say they have a hiring process but in reality, when the local manager calls the shots and is the chief driver of selecting people, there is no system in place. When I ask executives if their managers have been taught how to interview; if they use assessments validated for the position and if they have a written process that all managers must follow, the answers I receive are vague and stumbling. Frankly, to have no systematic hiring process is alarming considering we live in a CFB world.

When it comes to coaching originators, all companies will tell you that they want their managers to coach. In fact, they will even say that coaching is critical and a top priority. However, their answers fall short when I ask if they select managers who have the coaching competency determined by objective analysis? If the person doesn’t have the coaching competency, how is the company helping the manager to develop it? Do they provide personal coaching? If they are good coaches, does the company provide coaching materials and a coaching structure? How does the company measure a manager’s coaching? If the manager is not a good coach, is the person removed from the position? Companies are not serious about coaching their originators unless they hire managers who can coach and are monitored in the process. If you are not willing to fire a bad coach, you are not serious about coaching.

Finally, performance standards. Last week I discussed that performance goals should be sacrosanct in mortgage lending. They represent what it takes to be a profitable and sustainable business. In a way, they represent a contract between the originator and the company. If they are not met, there is a breach of contract that must be addressed quickly. Looking the other way or ignoring the lack of performance is a sure way to de-motivate the remaining employees. Most importantly, it conveys to your top producers that management is weak and not to be taken seriously. What would the Navy Seals or Green Berets have achieved if they let anyone into their group or kept anyone on even when they didn’t perform? Certainly, they would not have accomplished as much.

What I frequently see is senior managers who are afraid to take a stand on these important issues. I’ve heard the usual excuses, “production is off” or “expense control won’t allow them to address these critical issues.” The real reason is that they are afraid that by having standards or processes in people management, they won’t be able to recruit anybody. The truth is having standards makes you more attractive to originators because not everyone can join your group. Senior managers need to make the hard choices today if they want to outperform their peers.

Do you want to learn more about putting hiring and coaching processes in place? Let’s chat.