With the pro football season finally underway, the enthusiasm for my team — the Philadephia Eagles — is high. When you haven’t won a championship since 1960, every year could be THE year. This season, I find it interesting that the Eagles head coach Chip Kelly has replaced 40% of his team, even though he had wins in the last two years. Kelly has observed, “yes we won some games, but the team was not good enough to win a Super Bowl.” When you look at the stats of previous Super Bowl winners in any given year, a team might replace less than 20% of its players (due to contract negotiations and free agency etc) but 40% is a high percentage. This is a bold move that is controversial here in Philly and whether his daring strategy works won’t be known for months. A similar scenario is taking place in mortgage banking. Let me explain.
For a recent book project, I have been asked to discuss what hiring in mortgage banking will be like five years from now. I have contacted many senior mortgage executives to get their opinions and while many agree that the business will be dramatically different five years from now, the vast majority believe that our current hiring practices will be the same. How can this be? The business will be different but we will still hire the same? The equation doesn’t add up. As one executive commented, “The way hiring is conducted today cannot sustain itself; but there always seems to be a more desperate company who ruins it for others.”
There seems to be no question that the two biggest issues facing the mortgage business is its aging salesforce and how to sell to Gen Y consumers. Most managers agree that these are game-changers for our industry yet executives resist making large-scale adjustments to ensure success. So what is really going on here? In my opinion, the answer is simple: our industry needs more leaders.
In Harvard Business School Professor John Kotter’s great book, Force for Change – How Leadership Differs from Management, he does an outstanding job differentiating leadership from management. According to Kotter, the attributes that define a great leader are almost diametrically opposed to the attributes that define a great manager, and rarely does one individual excel in both arenas. This probably comes as no surprise, since a leader’s impetus is to drive change and a manager’s interest is to keep things status quo.
Kotter contends that prevalence of managers running corporate America vs. leaders is the direct result of the hierarchical bureaucracy being the dominant organizational form for the last century and a half. The dominance of this structure has led to a situation where most organizations are run by eminently capable managers who have been selected for their management skills first, and their leadership skills second. Kotter further says what is needed is not third parties developing a change strategy, but consultants training managers on how to lead. I think Kotter makes a great point and I must say rarely do I see a company committed to providing managers with professional leadership training. And I don’t mean hiring the Blue Angels for a sales rally.
Why do managers choose unremarkable strategies over a chance for greatness? Why is it that the industry’s challenges are met with uninspiring solutions? Coach Kelly is smart to make a bold move because with decisive action, he at least has a chance for winning big and not just being mediocre.