There has been so much written about leadership. It's the subject of books, articles and academic papers all defining what makes a great leader. After all of the discussion, there is one point we can all agree on: Being a leader is not easy in today's business environment and certainly has become much more challenging for those at the top of mortgage banking companies. As the industry begins to regroup and rethink how it will operate in the future, strong leadership is essential in shaping the behaviors and decisions of those within an individual organization or those who will shape an industry.
That is why today's leaders in the mortgage banking industry will be best served if they never again abandon the great responsibilities placed on them as providers of "The American Dream!"
Leadership is not doing what everyone else is doing better than they do it; it is about doing what you know to be right, thereby creating trust and respect. A dedication to ethical principles, integrity and customer well-being will always be the best course for your business or our industry. It is ironic that some look to recreate the very products and lack of customer focus that led our industry into the most difficult economy since the Great Depression.
Hard lessons are all soon forgotten. These same people continue to ignore regulations on compensation and controlled business arrangements, paving the way for a stronger regulatory enforcement. They are the worst examples of industry leaders, and as always, they cast a bad light on all those who abide by our industry's regulations. Leadership within an industry or a company is based on the same principles. Clearly, it is an absence of these principles that will ultimately lead to the same fate—as it always has in the past—failure.
Unlike some experts, I do not believe a person must be born with natural leadership skills nor are they all mastered by participating in a college course or MBA program. Rather, they are developed over time, not dissimilar to a great wine that matures over the years, increasing in fullness and complexity. A large contributor to becoming a great leader is the accumulated knowledge and experience that one gains through a variety of market cycles which ultimately forms the basis for educated decision-making. It has been said that the more you know, the more you realize what you do not know. It is that accumulation of experience that helps someone become a better, stronger leader. In looking back over the years, a person must learn from their mistakes, realizing that everything is a learning process. True leaders accept responsibility for their decisions and learn from their successes or failures, and then move on to the next challenge.
I believe a key principle of leadership is creating an understandable and realistic vision of what can be achieved and then motivating your team to accomplish the task or plan. I also believe, as a person grows in their career, understanding what caused others to succeed or fail becomes a fundamental element in shaping your capabilities. The goal is to develop perhaps the most important and yet rarest of leadership capabilities—the one that guides a company to success, avoiding lethal pitfalls along the way. While experience and vision developed over time are key elements of leadership, so are individual skills and traits. You only need to look at those you have considered mentors and those who have inspired you to achieve things you thought impossible! The words, "dependability," "trust," "respect," "vision" and "fairness," all come to mind. Do not confuse fairness with a passive nature. In many cases, a highly-respected leader is both regimented and driven. In fact, it is their dedication that inspires others to follow, as long as they feel they are part of a team and treated with dignity and respect.
As previously mentioned, a leader both perspires and inspires. Yet, while Thomas Edison said that "genius was one percent inspiration and 99 percent perspiration," leadership today typically involves quite a bit more inspiration in terms of motivating today's educated workforce. The perspiration often comes in how this inspiration is achieved. What creates inspiration and loyalty? Two fundamental prerequisites are trust and integrity. Simply stated, talented people typically do not remain for extended periods of time with executives they cannot trust.
I also believe loyalty and dedication are by-products of the environment we create. In successful organizations where employees are valued, they perform significantly better and are an inspiration to other employees because they are encouraged to be top performers and strive for excellence. It is a leader's responsibility to provide the tools and guidance necessary, enabling everyone in the organization to raise the bar on company excellence and individual performance. This is especially true in today's lending environment, which places a large premium on creating absolutely perfect loans.
Lastly, a great leader must be an honest communicator, one of many areas where integrity is essential. An organization's talent should be able to trust that their leader will share information, whether it is good news or bad news. It can be said that people can stand good news and bad news, but what they cannot stand is no news. Corporate goals need to be communicated throughout all levels of the company. It is important that everyone has a basic knowledge of the overall plan and how they contribute to the accomplishment of those goals. Celebrate the wins but, more importantly, stand up and share the bad news when necessary. It has been my experience that employees who are kept well-informed pull together during difficult cycles and often become the difference when weathering a storm. Honest communication is a must and absolutely essential to the creation of trust. Credibility trumps all.
Leadership is the ability to face tough challenges, make the hard decisions, and not compromise on integrity that ultimately sets real leaders apart. Being handed a title does not make someone a leader. This has become even more critical due to the failure of leadership in the mortgage banking business in the first decade of the new millennium. Bad decisions were made at every link in the business chain where leaders compromised the best interests of customers to further profit goals. Underwriting standards, which had stood for years as a testament to a disciplined and rationale approach to mortgage lending, were cast aside.
Now, as the mortgage banking industry regains its footing, it is time to see who can lead and reestablish customer trust and confidence. In looking for leadership material, it is important to select those who understand that the industry's well-being is critical to our individual success. They need to have the intelligence, vision and inspiration to influence their peers, the willingness and stamina to make the difficult decisions, and an unwavering dedication to always put our customers' interests first. A person can be a boss, but it is entirely different to be a leader who is respected. That comes from having integrity, building trust, communicating a clear vision and inspiring those around you through your actions. Mortgage banking companies need true leaders at the helm once again. Only then will our industry help consumers make the American Dream of homeownership a reality.
John M. Robbins, CMB is former chairman of the Mortgage Bankers Association (MBA) and is currently CEO and president of Bexil American Mortgage, a company he founded in late 2011. Its wholesale business unit, American Mortgage Network, is dedicated to serving the broker community. Robbins is a 40-year veteran of the mortgage banking industry. He founded American Residential Mortgage, which was sold to Chase Manhattan Bank in 1994, and American Mortgage Network, which was sold to Wachovia Bank in 2005. He may be reached by phone at (877) 255-2266 or e-mail [email protected]
"Being handed a title does not make someone a leader. This has become even more critical due to the failure of leadership in the mortgage banking business in the first decade of the new millennium."