What Lenders Need Now Are Great Managers!

It seems like every day I receive emails from lenders that want to hire producing branch managers. The job descriptions are usually similar and require the branch manager to be responsible for P&L, lead management and on-time closings; working with processing and underwriting; recruiting and retaining branch sales and support staff; and generating their own production.  Basically, they want a Superman or a Wonder Woman!

So, what does the lender offer to the branch manager in return? One email touted “sales and lead management systems including personalized websites and social media support and great pricing.”  There was no mention that the company had a great culture; developed the individual’s sales and managing skills; or provided a career path for the branch managers. Instead, their best pitch was that a candidate could download their pricing model to confirm their aggressive pricing.

In this difficult marketplace, lenders are desperate for volume and have defaulted to the traditional approach of trying to pirate branch managers and originators from other lenders for their book of business. While I have discussed the problems with this strategy in previous blogs, the fact remains that it is still the favorite approach at many lenders — even if it causes them to be unprofitable by paying guarantees and high splits.

What is interesting about job descriptions like this is the premise that an individual can be a great manager and a top salesperson. Certainly, there are people who can pull this off but the reality is that managing and selling require two different sets of core competencies. Lenders who hire sales candidates who do not possess the characteristics to be good managers means that recruiting and developing personnel will suffer.  As a result, growth at the branch level becomes stagnant which negatively impacts the company’s long-term growth.

In the past, when business was plentiful, it didn’t really matter if a branch manager was a good manager. The volume was there for every lender. Now when production is hard, the branch manager must recruit new sales professionals and help current originators improve their sales skills to do more volume. At the same time, they are asked to produce their own volume to keep the branch afloat. This is craziness at the highest level.

The assumption that a great originator can just flip on his or her managing skill sets at a moment’s notice is foolhardy. What is missing is the lender’s support in helping the branch manager develop hiring and coaching skills. Providing lead management and social media tools rarely generates the lift that a good managing support system would deliver.

Just look at the recruiting part of the manager’s job description. How many managers understand what is even involved in talent evaluation or presenting a value proposition that a potential originator would even be interested in?

Most producing managers view hiring additional originators as just incremental to their own income. The quality of hire from their standpoint is a corporate issue. If they did care, the turnover in the industry would be much lower. I can’t really blame them because there are no repercussions if they hire poorly. The thinking here is “Just get a warm body in place and let corporate worry about growth.”

Likewise, expecting producing managers to develop their salespeople is another fantasy that seldom happens. Coaching others and developing their selling skills involves more than just saying “Do what I do — I am a top producer.” If it were that easy, all originators would be successful which we know isn’t the case.

Coaching others involves identifying the real issue that is holding back the originator and structuring a customized solution based on the individual’s strengths and weaknesses. A producing manager doesn’t have the time or expertise to do either.

What does all this mean for mortgage lenders? In my view, it means recognizing that our present managing model is broken and that we need to make changes.

Can technology help branch managers manage better? Certainly, it can help in reporting but when you look at the actual usage of Blend and Day One Certainty, the failure of the local manager to implement these platforms is another indication that managers are not really managing.

What is the answer? I believe that if lenders valued the contribution that a good manager makes and started hiring individuals who have managerial competencies and investing in developing their hiring and coaching skills, their revenue results would be very different. In fact, I would argue that having good managers is mandatory for companies to succeed in this difficult marketplace.