Why the Harbaughs’ Winning Strategies Matter

As we near the Super Bowl, the stories about competing coaches John and Jim Harbaugh seem to be everywhere. The one I find most interesting is where both brothers removed key personnel during the season while on a winning streak. This was considered a radical strategy by many football analysts. John (the Baltimore Ravens coach) removed his offensive coordinator in the middle of the season when they were winning. Jim (the 49ers coach) replaced his starting quarterback with a rookie even after the quarterback had recovered from an injury — also when they were winning. Typically, managers (and coaches) act only when they are losing, not when they are winning. I think that the Harbaughs’ actions offer an important lesson for mortgage bankers whose profits are record-breaking.

In my recent conversations, mortgage executives often say they recognize that sales and social media are changing the purchase-decision model; they realize that purchase money is just around the bend and that refinancing will end sometime this year; and they know that producing managers are not very good coaches of their sales employees. They realize that they need to make a change but things are going well so why rock the boat? As one manager once said to me: “Pat, I have five more years. I am just going to ride the wave!”

Research backs up the Harbaugh brothers’ actions that change should be made when things are going good, not when things are going poorly: In a strong market, the financial investment can support the change initiatives compared to a weak market where funds may be limited.

Of course, this is not to say that meaningful change can’t happen when the market has shifted but the odds are better when the business environment is supportive and investments can be made.

Is there a scientific reason for this trend line? In a word, yes. The phenomenon is called an “S” curve, a mathematical model that describes the growth of one variable in terms of another variable over time. This model is found in nearly every field of study from biology and physics to business and technology.

When applied to the business world, the S curve indicates that all businesses (and individuals for that matter) have periods of growth, success and inevitable decline starting with when the status quo sets in. The status quo is a good sign that there is a need for change and relearning. In other words, a business should reinvent itself when successful in order to meet changing market conditions. This requires management leaders to make changes when things are going well and not to worry about what other companies are doing. For individuals, this means developing core skills and continuing to learn new sales techniques.

Why is it so hard to initiate change? Human nature, conditioning, ego and pride can all hamper change efforts and enable us to rationalize that while we could change, not growing isn’t our fault. We begin to believe that our lack of growth really isn’t as much our fault as the economy, the government or the company we work at. The truth is that awareness that change is needed is never enough; what is needed is the will to set goals and the commitment to take action. As always, that is an internal issue that each person from a top executive to an originator must address. When should you change? Today is a good day to start. What action are you going take to change your business or your skill level?