Hope your holiday was great! Last year certainly flew by. Now, 2016 is here and the market challenges are upon us. This is a good time to think about what it takes to be a successful manager in a volatile marketplace and what drives failure.
For some insight we can look at the hottest topic in the NFL: Chip Kelly, coach of the Philadelphia Eagles was fired last week one game before the end of the season. While Kelly was successful his first two seasons, his third year was highly unsuccessful with the team going 7-9. This was especially disappointing since expectations were so high for the team. So how did it turn out that one of the highest paid coaches was terminated after being considered a genius not that long ago? The general consensus is that three reasons brought about Chip Kelly’s downfall:
- Poor talent selection/evaluation in the draft and free agency.
- Poor communication skills throughout the organization and lack of emotional intelligence.
- Failure to adjust to changing circumstances as teams caught up with Kelly’s plays. Stubbornness.
These issues are the same for all business managers and are not unique to football team coaches. When you think about it, both managers’ and coaches’ success is a function of how they select team members, how they coach to improve performance and how they adjust and deliver results in a constantly changing marketplace.
No one is saying it is easy to manage or to be a football coach. The turnover in these positions certainly reconfirms that not everyone has the talent or skills to manager or coach today. But in high-stakes environments such as football or business, the leash is short for managers and the pressure to deliver immediate results is immense. The long-term good can be jettisoned quickly when there is another game or month to meet volume goals. Unfortunately, when the pressure is on, it is easy to ignore the next right step. So what happened to Chip Kelly, a very smart coach?
In Kelly’s case, it was lack of critical skills which resulted in termination. In his draft and free agent selections, Kelly overvalued players that graduated from Oregon where he coached before—he staffed his team with these players because he knew them. The second problem was lack of emotional intelligence which is the ability to recognize the feelings of the other person and your own and then to act accordingly. Kelly apparently did not interface well with his players or the owners of the team—they felt he did not create a caring culture. It was all football all the time. When players can go to any team, retention will suffer quickly if the team members feel their wellbeing is not a priority. Finally, Kelly was too stubborn to change when plays were not working because he believed his approach was the best. This managing strategy that “there is only one way or the highway” caused players to feel stifled and not listened to. These failings are not unique to coaches or for that matter, managers in business.
In mortgage banking, the long-running refinance market has lessened the need for superior managing skills. But as we know, all good things must eventually come to end. Not managing well, poor hiring, ineffective coaching and failing to adapt to new market conditions can lead managers to the same professional fate as Chip Kelly. In our more challenging purchase money market — where a dependence on marketing services agreement won’t work anymore — management teams must rethink who they hire as first-line managers and start to invest in improving their managing skills.
In 2016, wowing the customer will be a top priority in mortgage origination. This requires a high level of individual execution at every stage of the customer experience. Our new world of origination requires a much more skilled manager who selects candidates not because he/she worked with them before or might have heard of them but who uses a more scientific/structured approach in hiring evaluation; who coaches their employees not once in a while but regularly and who recognizes that the old ways don’t work anymore and sets the example of learning new ways to sell in the information age. The lesson we can learn from Kelly’s failure is that just because he had prior success doesn’t mean that the same approach will work in a changing environment. If we expect our originators to learn and change, shouldn’t we require this of our leaders.