Bob Mansur, CMB, AMP: Your Actions When Your LOs Won’t Do It?

Bob Mansur, CMB, AMP, is a mortgage industry veteran and the Managing Partner of Credit Employee Performance Solutions. CEPS changes behavior to increase productivity and reduce risk in the mortgage industry so company leaders can sleep peacefully. They do this by analyzing, recommending and implementing the six critical elements of employee performance to overcome current and future challenges and transferring to your leadership the knowledge and skills to perpetuate that success. He can be contacted at bob.mansur@crediteps.com or 317-517-1892.

(This is the last of a four-part series.)

Our three previous articles made the argument for behavioral standards, how to set those expectations, and a valuable response to an LO’s efforts to meet your requirements. Those presentations assumed LOs are willing to change their actions to deliver required results. In this part we address how you might effectively respond when an underperforming LO lacks the motivation to make those changes.

Can they do it? Will they do it?

We started this series of articles differentiating between those LOs who will change their behaviors to be successful and those who won’t change their behaviors. As we’ve said, the first group needs your clear behavioral expectations and feedback. You’ll also need to provide skills training to help them perform the actions you require. You have the opportunity to change them from “can’t do it” to “can do it”.

But what about the LO who won’t do it? Let’s be clear, here: we’re talking about LOs who are not achieving the production goals to which they’ve agreed. Once again, if an LO is reaching those goals ethically, morally, and legally, leave them alone. In this article we’re looking at the LO who rejects the behavioral expectations you set for her/him to follow a consistent process. Remember, a consistent process will not always work, but using one increases your LOs’ likelihood of success.

So, why are some LOs so resistant to making the changes you expect? Is there too much comfort (and obviously unacceptable results) in doing it their own way? Are they not believers in the potential benefits? Or do they see the ramifications of their actions as just not worth the effort?

In all these cases and many others, you really have two sequential options after you’ve set the standard actions you expect and provided performance feedback against those standards:

• change the consequences and/or
• change the occupant of this LO position.

The current situation – despite all your efforts to help – isn’t working. Change is necessary.

We call these options “progressive” because the costs of taking an LO off the job and replacing them are high. So, it’s worth trying to change the consequences before cutting someone loose. And when we say “consequences”, we’re actually talking about two factors: incentives and penalties. In other words, the carrot and the stick. You, as the LO’s leader, have influence in motivating her/him.

Let’s work on the principle that you cannot motivate a person long-term. Yes, fear or intimidation might move someone for a short period, but it generally doesn’t last. Rather than you motivating the individual, you have a greater responsibility to create an environment in which people will motivate themselves. When that LO wakes up in the morning, you can not determine their outlook on the day. But you certainly influence whether they dread or they look forward to going to work. Your actions set the climate for where they’ll spend at least one-third of their day. So, how do incentives and penalties impact the LOs work environment?

Effective incentives involve multiple parties.

1. There are the incentives provided and largely controlled by the company. Examples of these include compensation, perks (e.g., invitations to sales rallies, travel opportunities, etc.), promotions, and awards.
2. You also have some control by using informal and formal complimentary recognition, sales contests, meals, tickets and other enticements.
3. And the final party in determining which incentives create a motivating environment is the LO. What do they find particularly valuable for themselves, worthy enough to want to change behaviors so they can close the loans that generate their income? Commission is certainly high on their list, so continued and productive employment is a significant incentive.

Similarly, these three parties impact the penalties available to you. Your employer may have a policy that says you’ll have to fire any LO whose volume lands in the bottom 10% of the entire salesforce. And perhaps your company sets a standard commission structure for all loan production. You have the authority to recommend termination from the job, to restrict the LO’s access to certain loan products, or to perhaps ask HR to make a negative exception to their compensation. And much of motivation that’s affected by penalties is determined by your LO. Do they dread the loss of their job, resent cuts to their compensation, or really dislike it when you reprimand them? Nobody likes to be penalized for not performing up to expectations.

If you’ve made the decision that your underperforming LO is not willing to change their sales behaviors as you require, it’s probably time to change the person in that position. There are two ways to do that:

• create for that LO an environment in which she/he realizes they don’t fit and voluntarily leaves or
• take the necessary action that gives the LO an opportunity to pursue a new employer.

You have a lot of influence to make both of these actions happen by applying penalties available to you, including termination from the job.

But before you eventually face these difficult situations of LOs refusing to change their behaviors to improve performance, ask yourself the question, “Am I hiring the right people?” Individuals joining your company bring with them their personal, ingrained principles and values. And you must accept that you will have very little impact on changing them. Those principles and values are typically hardwired by the time we reach adulthood and generally change only as the result of a significant emotional event. With your prospective LO, do their personal rules, beliefs, attitudes, and opinions line up with what you know about your organization and yourself? Is this person a cultural fit for the company, your team, and you? Interviewing to hire a new LO can be hard. Getting an understanding of what guides their life is job one when trying to find your next LO.

As Mark Twain said, “The secret of getting ahead is getting started.” Can you find the right people who will favorably respond – including making necessary changes – to an environment where people know what’s expected of them and will motivate themselves to consistently apply the behaviors that result in success? After all, isn’t that a huge part of making your job easier?

(Views expressed in this article do not necessarily reflect policy of the Mortgage Bankers Association, nor do they connote an MBA endorsement of a specific company, product or service. MBA NewsLink welcomes your submissions. Inquiries can be sent to Mike Sorohan, editor, at msorohan@mba.org; or Michael Tucker, editorial manager, at mtucker@mba.org.)