Success May be Just an HOV Lane Away

Roger Staubach was the featured speaker at a university sports luncheon I attended recently.  He is more than just a Heisman Trophy/all pro ex-jock.  Staubach  heads a highly successful national commercial real estate business.  In his remarks he described two football teams he played on that had both been at pivotal points in their respective seasons.  One team was at the Naval Academy and the other was when he was with the Dallas Cowboys.  Both turned out to be championship teams, but neither season started out that way.  Apparently, too many players were approaching the season as though it was all about them personally, and the team was secondary.  The teams had a lot of talent but it was not a “one for all” environment.

How many times do we see this in business?  In striving for excellence, individuals focus on their own success and do little or nothing to improve the team or teamwork.  The view can often be that a branch’s monthly production volume may be “interesting” but how everyone else is doing, from producers to support staff, is not my concern.  I celebrate my own success.

Staubach went on to say that after the poor initial start to the season, some of the leaders got the team together to have a real heart-to-heart.  We can imagine the frank locker room conversations that probably took place.  I doubt it was a Knute Rockne “let’s win one for the Gipper” speech.  They demanded renewed thinking about the team, teamwork and team-focused effort.

Staubach’s message was that football, like business, is a team activity and everyone must be with and on the team.  He said it was just like entering the HOV lane on the expressway: every car needs passengers.  When someone is going it alone or is in it for just himself or herself, even a team with abundant individual talent can’t win.  We have to get everyone on board and take them along for the ride, just like in the HOV lane, so everyone gets to the destination.  He also meant that if people are not prepared to execute as required and ready to maximize each individual’s performance, then we need to grab them and bring them along.

Getting people involved and taking them along for the journey helps create the spirit of teamwork necessary to turn what could be mediocre performances into unforgettable ones. As we think about this simple HOV analogy, there are at least five possible actions that come to mind.  It starts with managers and concludes with the idea of raising the bar.

Start with Managers: It should be logical that managers or leaders need to first recognize the importance of teamwork and making sure everyone is on board with a clear understanding of the game plan.  Every once in a while the leadership must take an assessment of how well things are working.  From time to time we need to ask the questions about what is working and what is not, and take an objective look around.  At times we all forget the interdependency that exists within a mortgage branch or sales team and the connection to other parts of the company that support them.

This interdependency must be clearly recognized and understood.  Clear expectations must be set for behavior and results.  The leadership must continually work on resolving issues or removing barriers that get in the way of allowing everyone to be prepared and be able to do the best they can.

Stars are Included: It should also be reasonable that everyone must understand the vision, plan, and direction, and be an active and proactive part of it.  This means everyone, including the star performers.  Most superstars are good because they understand the importance of working with others.  They may want to “over-control” because they want nothing to go wrong.  In time we hope they learn that they can do even better when they help train the team and set clear expectations for others to focus on their own key roles and become freed-up to be even more successful.

But, there may be some superstars that can’t or won’t get this important message.  If they are disruptive to the team and limit the ability of the whole team to be successful, then management and leadership needs to make a decision.  Sometimes it is better to take a step backward in order to leap forward.

Identify Weak Spots: Everyone on the team is important.  Everyone’s role is there for a reason.  If that is not the case the position is not necessary.  You cannot afford to have anyone on the team streaming down their own personal HOV lane oblivious to what is going on around them and what is required.  Managers, leaders, and superstars need to identify every area requiring improvement and focus on fixing it.

This does not have to be a negative or disruptively critical exercise.  But, it must be focused and must be done.  This is not a “hey you, stop screwing up” message, but when you see someone struggling or someone not using a “best practice,” you need to help them get better or change the process.

The focus is to not allow poor performance or poor practices to persist, simply because it is “not directly my job” or you are “too busy with my own stuff.”  Take the time to explain thoroughly how to make things better or right, and have learning sessions where the A-players are coaching others how to do the job better.  We also need to set the right expectations so that everyone has a clear understanding of the performance level required.

Changes May be Necessary: Sometimes people have to leave for the good of the whole. There are predominantly two reasons for change.  The easiest to understand is when the employee either can’t or won’t do the job properly.  It may be skills, motivation, or personal issues, but if after training, support, and expectations have been clearly communicated the performance doesn’t measure up, then a change is necessary.

The other reason for change, which can be difficult, is when the person performs well but their approach or style is divisive and disruptive.   Some people are too negative and so self-interested that they adversely impact the team and teamwork.  It takes too much management time to the detriment of others.  When this occurs, sometimes the only solution is to make a change.  It may seem like a step back because of the individual’s performance, but results after the change is made are often surprising.  Others on the team usually blossom and the overall team results improve substantially.

When the team really starts functioning as it should, it is time to raise the bar and set expectations higher.  Chances are pretty good that until we really start getting into the HOV lane we do not know how good we can be.  Once we have identified weaknesses, both with processes and people, and energized everyone to make changes and have the patience to wrap their arms around the people who need support, the effect on the team and overall results can be 25 to 50 percent, maybe even 100 percent.  The power of a team committed to teamwork and excellence is a substantial force.

Lean Forward

Life and business are often defined by unpredictability; in the mortgage business we can add a strong dose of volatility and uncertainty.  Yet, if there had ever been a perfect time to be in the mortgage business and execute a new idea, strategy, or plan, it would have been during the last several years when the mortgage business seemed golden.

Few would deny that over the last half-dozen years or so, the phenomenon of several glorious refinance waves has made the mortgage business pretty darn good.  This was true for the originator or relationship manager, although less true for servicing portfolios and secondary marketing.  Nevertheless, good profits were generally made all around.  If something new was tried there was enough business activity to find the resources to make it work.  There was also enough profitability to disguise or cover up poor execution if things didn’t work exactly as planned.

It may now be in the recesses of our memory, but it wasn’t that long ago that a $600 billion annual mortgage market was terrific.  Today, even with rising rates, there have been no projections that reduce the overall mortgage market to a level lower than nearly three times these historical “good” volumes.  So, while the last several years have been great, there is nothing to indicate that the next several years won’t also be filled with opportunity.

There is certainly more than one way to look at our current conditions.  One view is that there was a perfect “window of opportunity” to grow our businesses, but that was before the market changed.  Interest rates are rising; now must not be the time to take chances.  That’s one view of the current environment, but I don’t buy it.

There is another view.  I remember what a former boss told me in the distant past during the end of one of those periods of high refinance volumes.  That year the company had the biggest origination volume in history, $50 billion, and I recall hearing the words, “any idiot could have done that.”  While inspirational, I didn’t buy that point of view either.

Whether we are in the upside or downside of a business cycle, it takes definitive action to create momentous results.  We must ask ourselves what it will take to move forward now.  No matter which way the economic and interest rate winds blow, doing nothing doesn’t work.  Whether the wind is to our back or in our face, we must learn to lean into it.  Have a forward-leaning plan and execute it, especially when the going gets tough.  In the mortgage business the winds can change quickly and blow in different directions.  If we have wind at our back it can be a great advantage; it can accelerate results.  If there is an economic headwind then we must lean into it harder.

There is enough evidence to suggest that in the current environment, which seems like a headwind, there are companies that will loose momentum.  We can already see it.  Success can be fleeting—miscalculations create opportunities for others.  We must be prepared to take advantage of these circumstances, and we can if we are ready and poised to go after them.

What separates and differentiates companies in these down cycles is clarity of focus and action.  These are the times when we must be sharper in every aspect of our business.  Little things count more when the going gets tough.  If we don’t recognize this subtly, then we squander resources and lessen our ability to take advantage of emerging opportunities.

Focus on expenses and processes that are wasting resources unnecessarily.  It is inevitable that during up cycles we throw money at things to get them done.  Why not? Time is of the essence and business is good.  There is plenty of revenue coming in so spending a few extra bucks won’t hurt, right?  Wrong.  We get lulled by prior success and inevitably, as the market tightens, we are slow to change our habits.

Look at every expense and justify that it is the right thing to be doing.  For example, look at such things as cell phone usage.  I am amazed at the variation in cell plans and how much is wasted.  The same applies to travel, entertainment, office supplies, courier, advertising, marketing expenses, and on and on.  We waste a lot more than we realize.   If there is extra space, sublet it.  If leases are coming up for renewal, make an effort to work with your property manager to have your rent reduced.

Take a good look at processes too.  Are there steps or procedures that are no longer necessary?  Can functions be combined in a new way to provide better service to customers and originators?  What are the metrics in the business?  What are the trends in loans handled per processor and closer?  How much revenue is there per employee?  Is it time to reevaluate fees?  We tend to add staff to get the job done during higher volume times, but don’t make the hard decisions to adjust staff size with the best people as volumes and circumstances change.  When the shop is in order and expenses under control, we always feel a lot more comfortable about continuing to lean forward.

All of this is, of course, easier said than done.  Most business people have trouble doing two somewhat opposite and different actions at the same time.  They watch and control expenses but fail to focus sufficiently on growing the business and investing in key areas wisely.  Doing both at the same time is critical.  It can be hard, but we must keep focused on finding ways to expand what we are doing and also find new opportunities.  They are always there, even more so when the market tightens.

When we think we have found those opportunities we must be clear in our expectations.  So many times managers jump at opportunities without thinking through what it will take to make it work. Understanding what it takes and setting clear expectations up-front is the beginning.  Monitoring progress and holding managers and the team accountable each month for what is expected is part of good results management.

When things don’t work, with the best of plans and people, don’t be afraid to either revamp the plan or start over.  Even if it was the best idea you thought you ever had, let the numbers speak for themselves.  It never pays to throw good money after bad.  Redeploy your resources and human talents and energies toward another opportunity.

Don’t stop leaning forward.

Marketing Portfolio

CountryWide-box1When Jon Byler wanted to feed his Realtor business, he knew that the way to a Realtor’s heart is often through their stomachs. Byler, branch manager of Countrywide Home Loans in Santa Cruz, Calif., provides goodie-filled Realtor Survival Kits to his real estate contacts. While he uses them primarily during open houses, he has also used them at office meetings and other events.   “Morning tour boxes consist of a bagel, cream cheese, jelly, juice, utensils, aspirin, hand wipes, and promotional Countrywide information. The afternoon lunch box is slightly different. I hand make sandwiches, add cookies, chips, and bottled water, plus all of the utility items listed above,” he explains. “Walking into an open house bearing gifts, you have something that is very different than the rest of the marketing crowd,” he says.  Byler cleverly fills the boxes with more food than the Realtors could eat at one time, so the boxes end up going back to their offices. He also includes a card at the bottom of the box inviting them to call for a “free refill.” Byler adds, “When they call to take me up on the offer, that’s when the real marketing begins.” The boxes are printed by Bullseye Boxes at a cost of $200.00 per 100, and Byler spends $10 to $15 to fill them.

recipiecardLooking for the recipe for success? Try just a recipe itself—for Mexican teacakes, sweet and savory chicken, or any other dish that is sure to spice up your clients’ lives.  Andrew Cardina, an originator with First Horizon Home Loans, Lancaster, Pa., sends these monthly recipe cards to all B2B contacts, closed loan customers, and new prospects who have been pre-approved.  The cards offer a comprehensive, creative recipe each month, and credit the individual who sent in the recipe at the bottom.  “These are tangible pieces that can be given to friends or acquaintances if they are looking for a mortgage,” says Cardina.  Cardina subscribes to the cards through his company and is responsible for the $.44 each payment.  Included on the back is Cardina’s picture, accompanied by a friendly reminder of his home financing services, and complete contact information.  Besides being a cost-effective means of keeping his name in front of customers and referring partners, “the piece itself is functional,” says Cardina.  “Since it is a recipe card, customers get other use from it than just the mortgage contact information.”

cellmate2Hold the phone! Shawn Portmann’s unique “Cellmate” will really give the competition a hang-up. The Cellmate is a thin grip pad that “magically” holds a cell phone in place on a car dashboard. “My clients love it,” Portmann says. “They always want more.” Portmann’s name, company, and phone number are conspicuously, yet unobtrusively printed along the bottom. “It keeps my name in front of them at all times. Repetition and consistency is the name of the game.” The idea of placing your name on an everyday item isn’t new, but unlike pens or key chains, this marketing piece grabs the client’s attention because it’s something out of the ordinary—something they probably don’t already own. In the past, Portmann, a loan officer with CityBank Mortgage, Puyallup, Wash., has also sent out such novel marketing items as water bottles, lunch boxes, and Frisbees. He distributes about 1,000 Cellmates per year to customers and 200 to Realtors as part of a larger thank-you package after closing a deal. The Cellmates cost approximately $3.00 a piece, with an initial set-up fee of $45.00.

Renting-FlyerWhile many originators strive to capture the renter’s market, few may create a way to stand out from the crowd.  Michael Gambatese, an originator with Pillar Financial LLC, Palatine, Ill. (a suburb of Chicago), used a catchy, distinct slogan to print on his renter fliers:  “Renting is Hazardous to Your Wealth!”  The text makes a bold statement below a photo of the Chicago skyline, since most of these fliers target high-rise condo renters in the downtown area.  Gambatese prints these fliers in a co-marketing effort (shared costs) with one of his Realtors, and they are mailed to renters paying at least $1,000/month.  The lower half of the flier displays the options to buy for people paying anywhere from $1,000 to 1,750/month. The dollar figures are annotated with details of the loan program used to calculate the numbers.  Gambatese sends out about 200 fliers on a bi-annual basis and says that he just came up with the idea “when thinking of creative ways to target renters.”  The flier is also incorporated with a first-time homebuyer seminar given with the Realtor.  Fliers are generated in-house using PowerPoint, and then printed at Kinko’s on nice stock paper.  The cost is approximately $500, including postage.  “It has been successful because it’s different,” says Gambatese.  “And because this market is saturated with renters paying ridiculous amounts per month in rent.”

Keeping Your Team of Champions Together


Practice “internal recruiting” to retain your best people

Think the recruiting process ends when you hire a new employee? Think again. It continues long after day one on the job. In fact, my personal view of recruiting is that of a relationship—it begins when you first meet a potential hire, but continues when he or she becomes your loan originator (LO) or employee. Just because a person works for your company does not mean the recruiting process has ended. A planned, deliberate retention strategy will help keep your staff happy throughout their tenure. Especially in our business of mortgage originating, it can be a challenge to find and keep good employees. Yet quality people are what drive the business, make or break the transaction, and most importantly, keep your customers coming back for more. 

At my company, we see very little turnover. In fact, less than five percent of our staff has left to work for another mortgage company. I attribute this loyalty to our “high-touch” environment—being responsive to needs, and providing recognition, rewards, and a great workplace. It’s a methodology we use not only with our partners (utilizing strong and effective database management), but also internally with our employees. High-touch equals loyal people; they know that we care about them, and it shows in our retention rate.

Hiring

So how can you excel at retaining your most valuable assets – a good team of loan originators? It starts with the hiring process. Whether you have a staff of recruiters or utilize an outside firm for your searches, it’s important to look for seasoned loan originators with a solid book of business. Typically, these candidates come from banks, retail mortgage banking firms, or brokerages. Then, start a relationship. It’s really no different than building a friendship – opening a dialogue to find out if there’s a mutual fit. In my experience, the success here lies in a values match.  That is, does this person have similar values and goals that match our company philosophy? Can he or she ultimately add value to the business, and in turn, will our company add value to his or her life? 

In regards to predicting if a candidate will be successful in his/her role at UPM there are several types of testing that can be administered.
1. DISC testing is a way of testing a candidate’s outward behavior style.  This type of test can help us predict outward behavioral style.

2. Another type of testing is practical testing.  If we are considering a candidate for a processing role at UPM we will ask them to review a loan file.  Our processing manager will remove some required documentation from that loan file and ask the candidate to evaluate the income of the borrowers and create a list of documentation that will be required for this file to be approved.

3. A third type of testing is internal.  We ask our hiring manager to create a “must have” list.  This list is the qualities or requirements the candidate must possess or meet in order to be hired at UPM.  If the candidate does not meet one or more of the criteria, they will no longer be considered for the position.

Internal Recruiting


Once a values match is affirmed and trust is established, the relationship begins. At this point, we transition to what I call “internal recruiting.”   This is where the high-touch element really comes into play. If an organization is not making a concerted effort on some level to retain its loan originators and employees, it probably has a high turnover rate to match.  We believe not only in fostering a positive work environment, but also in promoting established programs to reward our top producers. Examples of the former include:

  • Full-service branches—processing, underwriting, docs and funding in one place
  • On-staff IT (Information Technology) group
  • Commissions paid every Friday
  • Scenario desk—hugely popular with our originators, this “internal service” allows originators to write scenario e-mails and receive a response (within 24 hours) outlining all of the loan options (prime and subprime).  The LO can e-mail all of the “facts” of the loan (income, assets, credit score, LTV, loan amount, value, doc type, and so on) to the scenario desk; the scenario desk can then use our technology to scan our entire product menu and matrix for programs that will accommodate the required scenario.
  • Subprime subsidiary to help the originators close every type of loan with the best efficiency
  • Personal, individualized coaching and development.

We recommend that our LO’s use a three step process in regards to coaching and training.

1. Todd Duncan.  We believe that Todd Duncan is the best teacher of high trust selling and add value/client for life tools in the mortgage business.  His teachings, events, and book will assist any loan originator in achieving their goals and dreams.

2. Building Champions.  We believe Building Champions is the best one-on-one mortgage coaching company in the industry.  Building Champions uses the tools taught by Todd Duncan and breaks them down one-by-one to ensure the LO masters each tool.

3. Productive Learning & Leisure.  PL&L is a company that specializes in self-awareness.  Becoming more self-aware is key to effective communication and high-trust selling.

  • Regularly scheduled department meetings where issues can be discussed and resolved
  • No micro-management.  We hire experienced, knowledgeable LOs with a client-for-life business plan. These types of LOs do not need to be micro-managed.  For the most part they prefer we allow them to do what they do best within our framework.  We have a V.P. of Sales and owners with an open door policy.  We are available and willing to help in any way we can.
  • New and well-maintained office equipment
  • Healthy and respectful working environment
  • Owners who employ an open-door policy, and who are hands-on in actively leading the company every day

In addition to good pay and traditional benefits, these factors do make a difference in loan originator and other employee retention. A staff that is empowered to do their job in a positive environment with the proper resources and tools will produce better results. In our business, it is all about performance.

Reward programs and personal touches from the top-down are additional ways to keep your employees happy and loyal. Examples of these well-received benefits include:

  • Top producers “club”—includes annual dinner, summer vacation with guests and awards.
  • Quarterly Top LO lunches/top LO Saturday-night dinners.  It is important for us to spend time with our top LOs outside of the office setting.  We prefer to hire people we like and therefore we want to spend social time together.  Our top people have become friends and extended family members.  In addition to enjoying the social time together, we often solicit their opinions on company policies and direction.
  • Retreats/trips
  • In-office massage.  We invite a masseuse to the office and he/she provides our LOs and staff with shoulder and neck massages.  Depending on the number of people in the branch, their visit could last a couple of hours or all day.
  • In-N-Out Burger truck on-site, ice cream socials
· Annual happy hour and dinner, family barbeque and picnics
· Handwritten birthday and anniversary cards from company president
  • Managers “random acts of kindness” to staff (gift certificates, thank-you notes, lunches)
  • Various employee assistance—additional training (within and outside of departments), and salary or commission advances

While some of these examples are more common than others, it’s the “outside of the box” incentives that often are most popular. These and similar gestures of appreciation will go a long way toward keeping your employees satisfied. A contented staff not only tends to stay put, they also improve your reputation on the inside and outside.

Another critical factor in the workplace is balanced life planning.  Happiness breeds success, and without balance, it’s difficult to be happy. One way we take control of time at work is to practice time blocking. For example, one might use mornings to make calls and afternoon to return them, or designate Mondays for current and potential borrowers, and Tuesdays for referral-partner outreach. This is just one way to support being proactive rather than reactive with time in the office.

Feedback


Every employee wants and needs to know how they are doing.  Providing feedback should be a regular function of every manager’s day.  At UPM we have two formal reviews each year.  One is a performance review and one is a compensation review.  They are performed on or about the anniversary date of the employee’s employment.  The two reviews are performed separately.  The main purpose of the performance reviews is to praise and redirect.  Every employee must be praised on what they are doing well and redirected in areas where they can improve.

In addition to the annual reviews it is important to reward employees who go the extra mile to achieve excellence.  We reward this type of behavior with weekend trips, concert tickets, tickets to theatre and sporting events, gift certificates for movies, department stores and restaurants and with handwritten notes expressing our gratitude for the job they do.

Employees are an investment. And it’s much less expensive to retain current loan originators and employees than to train and indoctrinate new people. When you’ve assembled a team of champions, it just makes good sense to do what it takes to keep them together. In addition, if an LO or employee with desire and commitment is struggling with production, I believe in channeling him or her to coaching in order to help that person improve. With a focus on internal recruiting, you can improve employee loyalty and longevity, boast a low turnover rate, and reap the rewards of high producers who enjoy working for your company.