The Top 10 Challenges

“Learn to think tactically and globally; it helps add the perspective required to manage others.”

Is your to-do list getting longer? Does it seem there is more to do every day to effectively manage your business? The mortgage business can tax anyone’s management skills, regardless of the interest rate environment. It is as hard as ever, if not harder, to manage successfully.

For the last several years, the mortgage industry has reportedly been in transition. This simply means the business is in the midst of a significant change, from a business of predictability to one far less known. Today, managers face new competition from traditional and non-traditional players. Mortgage companies are going out of business, either through acquisition or business failure. New technologies are bringing new methods, new challenges, and perhaps new barriers to the business. Finding competent sales and support staff that fits well with your company is getting more difficult. To meet the challenges, you need a personal game plan.

Your plan should contain the major management challenges to be conquered. Lists may vary, depending on individual responsibilities. Consider the 10 challenges outlined below and keep a similar list in front of you at all times so you can work on them regularly.

Keeping Your Winning Edge
The business issues facing today’s managers are formidable. The to-do list can be quite long and include many critical tasks. With so much to do, it is easy to forget that at the top of your list must be making sure you’re keeping your own “winning edge.” You must be at the top of your game every day if you are to direct and lead others to be the best.

If you are a producing or an originating manager, you must make sure your own business is solid. Keep on top of your business plan. Reassess what is working and what isn’t. Review your plan regularly and don’t take what you have built for granted. Don’t neglect your own business. Be as disciplined and organized as possible so you can more effectively coach and lead your team.

Whether a producing manager or not, you don’t want to be so single-minded that you forget what is going on around you. Keep yourself informed about what is going on in your area of responsibility, your market, and in the overall mortgage industry. Keep a list of major events and trends and what it could mean to your business. It may also help to find a mentor, someone you respect and trust, so you can discuss ideas and directions and have a sounding board. Learn to think tactically and globally; it helps add the perspective required to manage others.

When your personal production is solid and you are well informed about the mortgage business around you, with knowledge of major trends and someone to share ideas, you should have the confidence to keep your winning edge.

Basic Business Growth
Growing production volume can solve a lot of challenges. Managing expenses is critical, but increasing sales is always important. If you are a producing manager, you know the challenges firsthand. Use your market knowledge to make sure your business plan is one that works today.

Everyone in your organization should be focused on sales. Every loan officer must have a personal business plan. You or a sales manager should review the results of each plan regularly. Make sure everyone knows what sales results are expected.

Get everyone into the referral business. Everyone should produce leads. Make it a contest. Post each new individual and team sales records. Celebrate success. Make a winning team part of your culture.

Creating the Best Team
Having quality people in every position can be a challenge. Recruiting, training, and retaining staff to create the best mortgage team should be part of any game plan.

Assess your staff regularly. Make sure everyone is an “A player” or has the potential to be one. If there are weak team members, make sure you and they know what is expected. Reassess their skills to do the job. Know what skills are needed and sharpen your recruiting efforts. Keep a list of the people you need, including new loan officers, and make it a weekly task to search for the best people you can find.

Don’t forget training at every level. As long as you have people willing to learn and commit to the team, you can build a better business.Training should be ongoing and a regular part of how you do business.

Maximizing Bottom Line Profit
Production is critical, but profits determine your long-term success. It is easy to not earn enough and waste money in the process. Part of the reason for not collecting enough fees or spending too much on travel or business supplies is that employees do not understand what it takes to be profitable.

Take the time to review your company’s sources of revenue and expenses with your staff. Discuss areas where fees and other revenue can be increased. Do the same for all expenses. When everyone sees what it takes to be profitable, there is a greater interest in looking for ways to improve the bottom line.

Creating a Success Plan
There is no practical way for your employees to help execute your plan if it is not in writing. This does not mean you should create a document suitable for a Harvard Business School case study. It means a plan that everyone on your team can understand and work toward achieving.

At a minimum, you must outline specific goals and the strategy to achieve them. Define everyone’s role in accomplishing your goals. Everyone must have specific, measurable goals. Their results must be reviewed monthly, if not daily or weekly. Be prepared to make changes quickly because market conditions change.

Impact of Technology
New technologies are being introduced almost weekly. Deal with technology by first keeping things simple. You need some innovation to be competitive today. You need an efficient loan origination system; connectivity to Desktop Underwriter, Loan Prospector, or some automated underwriting engine; contact or database system to manage the sales efforts; and company and loan officer websites. Laptops for loan officers are useful, but not yet critical. These are the basics.

As you hear or see new technologies being introduced, add them to a list for evaluation. Learn enough about them to estimate the impact on your business and the associated costs. Don’t get caught up in the hype of what’s new. Make sure it adds real business value.

Handling Change
Handling change effectively must become part of an organization’s culture. A fact of life in mortgage business today is dealing with change. We must handle regulatory and technology change. New products, investors, and a changing interest rate environment are a way of life. New business models, new systems, and new operating concepts are changing the mortgage business forever. Don’t react to every change, new idea, or concept. But be ready to evaluate each one objectively.

Motivating Success
No matter how good the team or how big the commitment is to success, they individually and collectively need to be recognized, rewarded, and motivated to continue to work toward success. In the midst of everything there is to do, something falls through the cracks. Don’t allow celebrating your team’s success to be forgotten.

Don’t Forget the Customer
One element of your business is to satisfy the customer. In the midst of trying to maintain, grow, and build a team, the customer’s needs come first. This is not the loan officer’s sole responsibility. Everyone on the team can influence customer satisfaction. Discuss how each person’s role impacts the customer satisfaction and find new ways to impress the customer in the future.

Remember the Unexpected
Just when you are doing everything needed to be successful, the unexpected happens. It may be that your company is bought or buys another. Or, unfortunately, it goes out of business. These events are happening. The unexpected can happen, but don’t let it be a distraction. There is always a place for a solid, profitable team. Good people are wanted everywhere. Make sure you have the best and your and their future is better assured.

by Jerry Baker