Whether you manage a team of originators or run a mortgage company, the critical issue is always how to move the group to the next level or scale the business. Of course, riding the wave and hoping for the best might work for a while but at some point, selecting a strategy becomes the most important function of leadership. What should the strategy be — technology, price or talent?
Neil Rackham, a well-known business consultant and author of Spin Selling (who inspired my own company to embrace an analytic approach to sales hiring and development) observed that “today, no niche is safe statistically. The average company’s market share has been cut in half because of the huge increase in competition.” It seems clear that the days of dominating a marketplace for years at a time are over. Just look at who the top mortgage firms were in 1980, 1990, 2000 and 2010. The reports show how a different company dominated and then was replaced within a decade.
To compete in today’s marketplace, most senior managers contend that they rely on innovation as the solution for growth. Rackham points out that a growth strategy based on innovation is a hard strategy to sustain. Even Amazon and Apple are challenged with innovation as a growth strategy. It is costly and difficult to come up with the next big thing. What replaces innovation as a growth strategy?
By default, organic growth is the strategy that must be pursued. Organic growth is all about having an excellent sales force who can outsell the competition. Organic growth is very difficult to achieve because who and what got the business to one stage might not be the right ingredients to get to the next. The key issues that leadership must address center on the structure of recruiting, training, managing and growing a sales force. In many ways Rackham says, you are asking sales teams to grow up.
A more adult version of selling in any industry must include more analytics, measurement/logic and research-based strategies.
To scale organically, leadership has to become more serious on the big three issues: hiring, sales training and accountability.
1. A system for hiring above-average originators must be in place.Haphazard hiring practices ultimately translate into high turnover and a poor customer experience — a sure accelerator of market share loss. In my view, failure to structure hiring and setting standards invariably result in a failed leadership team.
2. Every originator must follow the same sales process and must be coached and trained by the manager on it. Today’s reality is that the company is on the hook for the life of the loan. The days of thinking that when the loan is sold, the lender’s responsibility ends are over. Forget regulations. It is how the customer views the relationship with the lender that counts in the long run. A well-defined sales methodology is what drives scaling success by installing a correct way to help the customer through his or her buying journey. Whether the sales person is new or a veteran, the customer demands excellence from all interactions with a company.
3. Accountability for delivery of extraordinary sales process and sales person performance requires an effective manager. The field sales leaders are what drive scaling of a sales force. Allowing poor performance to continue for months and failing to reinforce behavioral changes permits a sales force to perform erratically. The buck must stop with the field manager which requires that leadership ensure they have the right people in this critical spot.
Is 2015 the year you scale your sales force? Call me to discuss how to implement the three drivers.