Peter Drucker’s 5 Keys to Being a Great Company

Known by many as the founder of modern management, Peter Drucker was one of the most influential thinkers in the business world. Much of what he wrote over the course of 39 books remains relevant in today’s marketplace. Drucker was a genius and reading his work inspired me to open my own consulting business. Drucker identified five keys to business success which still hold true today. They are:

  1. Customer satisfaction
  2. Employee engagement and development
  3. Innovation
  4. Social responsibility
  5. Financial strength

In 2017, The CEO magazine reviewed the top 50 U.S. companies based on Drucker’s criteria. Not surprisingly, Amazon, Apple and Google were ranked in the top three. In the top 50, not one financial institution made the list!

When looking at these measurements, one thing that strikes me is how many of the criteria are tied directly to employees. Drucker could have listed financial strength as the most important but he didn’t. It was listed last. This raises the question, “If personnel are so important to sustainable success, why aren’t more companies focusing on it?” While most consider the top three companies to be technology wizards, the reality is that all are excellent at focusing on the personnel side of the business.

The current environment in mortgage banking is certainly not easy and the recent MBA conference reflected this sentiment. The trifecta of rising interest rates, limited housing inventory and increased costs has taken its toll. These issues have translated into panic and in my opinion, have prompted companies to make decisions that are not smart in the long run. One example is the trend to remove managers instead of underperforming sales professionals.

In my consulting engagements, one of the most common issues I see is failure to install a structure that focuses on delivering the best customer experience to the borrower.

Three structures that are critical for success include:

  1. An objective assessment for hiring sales candidates
  2. A uniform sales process to deliver a consistent sales message
  3. accountability standards that are enforced

Whether it’s a sports team, military unit or sales force, all winning groups have this structure in place. While this three-part structure seems simple, committing to it distinguishes the best companies from the rest. Here’s a closer look at each element.

First, how you hire and screen sales talent is the Number One priority for any firm that wants to achieve long-term success. This drives everything else at a company. No exceptions. A rigorous interview process is essential to thoroughly evaluate sales candidates. Do prospective employees have the behaviors to originate? Do they match your company’s culture or way of doing things? Are they in alignment with your current sales process? Too often, candidates are hired based on a W-2 and a pipeline review. Can you imagine sports teams using this approach when drafting their players?

Professional sports teams don’t conduct this type of superficial review because it is easy for candidates to talk a good game but not deliver. Making the wrong decision is just too costly. One bad decision can cause lasting damage. Just look at the Cleveland Browns who passed up on Philly quarterback Carson Wentz. For this reason, it is essential that companies screen for innate sales behaviors during the interview process because no training or technology will correct lack of sales talent after the hire has been made.

Second, companies should have a documented sales process based on how their top producers get results so everyone else can follow what works. Letting originators decide what process and sales message they will use when prospecting and handling customer interactions is foolhardy. Best practices are smart, effective shortcuts that can improve the sales process across the board. A good sales process and message eliminates the guesswork for average performers. In a purchase money market, there is not enough time for a trial-and-error approach. Just follow the top producer’s best practices.

Finally, the glue that holds a sales group together is holding originators accountable for their performance. Establishing sales activity benchmarks and adhering to them is essential. Too often, companies have standards but do not implement them. They let underperformers continue on with a litany of excuses that should be addressed and handled when there is a pattern of poor results. Can you imagine a losing sports team say they had a “satisfactory” performance? Of course not. In Philly, they would be kicked out of town in short order. In mortgage banking, every producer should be held to specific performance standards.

It is time to get serious about installing a three-part structure that ensures the best customer experience. Anything less will not cut it in 2019. If companies want to come out on top in the year ahead, they must hire the right people and develop and support them. Drucker was so right.