"These are the times that try men's souls." Thomas Paine once said, "The summer solider and the sunshine patriot will, in this crisis, shrink from the service of their country; but he that stands by it now, deserves the love and thanks of man and woman."
These often-quoted words apply aptly to patriotism, but they also have particular relevance to business. Everyone appears to be successful when the sun is shining. When the economy is going strong, the market is up, and the industry is thriving, the best and worst of mortgage professionals can eke out a living. It's the downturns, the recessions, and the unwelcome industry shifts that reveal who the true winners are. When it's no longer all sunshine and rainbows, who's left still fighting the good fight? That's what counts.
We see that, when times get tough, there are many companies and loan originators that stop producing. Their revenues shrink. Their profits shrink. Their market share shrinks. And they find consolation, if not comfort, in the fact that they can blame the economy. It's happening to everyone else too, right? Well, not exactly. Despite troubling economic times, there are still those companies who seem to pull through and even thrive when times are hard. There are loan originators who actually grow when the market is down. How do they do it? What separates the companies that fail in tough times from those that succeed? What's the trick?
When you look at the differences between successful companies and companies just riding the waves of a good economy, there is always one thing that stands out: The company culture. It isn't necessarily that there is one "right" culture, but it can clearly be seen that there are bad company cultures and there are good ones. So what makes a culture good or bad? I don't know very many organizations that have set out to create bad corporate cultures. That just doesn't happen. What does happen is this: Companies fail to be proactive in creating good corporate cultures and they end with bad corporate cultures as a result.
You cannot plot a course to where you want to go until you know where you're at. Culture is knowing who you are. If you aren't deliberate about defining where you stand and creating the right environment for success, you'll end up with whatever culture happens to develop on accident. You can't not have a culture. If you don't create one, one will be created for you. It's up to you as to whether or not you'll set the direction.
A good company culture will play to its strengths. As a leader, you will know what your organization is best at doing. Build your culture around that. Don't compromise and try to be all things to all people. Being all things to all people amounts to being nothing to anybody. When you focus on your core competencies, you give your team something to rally behind.
Create a community in which employees feel like they're part of something. Don't just motivate people with money—that only goes so far. Motivate them with purpose. Don't just allow them to do their jobs. Allow them to build something bigger than themselves. For those who don't fit with your organization, for whatever reason, don't be afraid to let them go. Help people go be successful somewhere else if they aren't being successful with you.
As you go about creating a winning culture in your organization, there are some key items you'll need to consider. I call them "The 7 Cs of Leadership," and I've written about them before. But, for this article, I just one to cover one. It is the foundation upon which any solid culture is built. Without this one thing, everything else loses its meaning. What am I talking about? I'm talking about “Character.”
A culture with strong character is a culture with integrity. It's creating a space in which people feel comfortable doing the right thing and uncomfortable doing the wrong thing. In your organization, do people feel comfortable pushing the legal and ethical limits to secure a deal? If so, your organizational culture is probably weak in character. You want to hire people with solid character and then nurture the environment that encourages them to make the right decisions.
Successful organizations are founded upon character. Such organizations succeed because they are able to keep the trust of their employees, customers, investors and communities. When you deal with someone who has character, you know exactly what you're getting. That's the kind of organizational culture you want to develop.
There is a famous story I would like to share with you that conveys the point I'm trying to get across about the importance of character. A CEO was nearing retirement and he wanted to choose a worthy successor for his company. Instead of choosing one of his children or someone from the board of directors, he decided that he would give his executive team a shot. On the day that he announced his retirement, he gave each member of his executive team a pot of soil containing a seed. He told them that he would allow each of them a month to nurture the seed into a plant. When the month was up, he would make his decision.
Steve, one of the CEO's vice presidents, tried all he could to get the plant to grow. He watered it three times a day. He sat it by the window so that it could get as much sun as possible. He even got some special fertilizer from a local garden center. But, no matter what he did, he couldn't get even a single sprout to come out of the dirt. When the month was up, he had to return to his boss with nothing but a pot of soil.
When he entered the boardroom on that day, he instantly felt his stomach turn. All of the other executives had somehow managed to grow a beautiful array of plants. There were all sorts of different colors, arrangements, shapes and sizes. How, he wondered, had his turned out so poorly? At the front of the room, the CEO called everyone to his attention. He said that, based upon what he had seen in the room, he had made his decision as to who would be the next CEO. Steve swallowed hard. Not only did he not have a shot at being the next CEO, but he would probably be fired. But then something amazing happened.
"Steve," said the CEO, "I have chosen you to be my successor!" Every jaw in the room, including Steve's, hit the floor. How could this be possible? The CEO continued, "You see, in every pot of soil that I gave to each member of the executive team, there was no seed. There was only dirt. Therefore, nothing could have possibly grown. Each of you have shown me that you care more about getting ahead than you do about maintaining your integrity. Steve is the only one whose character has withstood the test. More than anyone, he deserves to be my successor."
Can you imagine what the result would be in an organization in which everyone was willing to lie and cheat to get ahead? Surely, that's a culture that's headed for destruction. A culture built on strong character and integrity, however, will withstand just about anything.
Sometimes, "character" can be somewhat of a fuzzy concept to understand. But it really all comes down to values. Character is an anchor that allows you to determine the right course of action when you must make a decision. If you have character, you will know what to do. You won't even have to thinking about it, because you will be driven by your values. But character isn't just reactive; it's also proactive. Character is also a compass that helps you understand what new projects to undertake, which new people to take on as part of your team, and so on. It is both the foundation that keeps you grounded and the springboard that pushes you forward.
Speaking of the Christian faith, St. Francis of Assisi has famously said, "Preach the gospel, and if necessary, use words." It's the same way in the mortgage business. If you are creating a culture founded on character, people will know it by the way your business is run. You won't even have to say anything. On the other hand, advertising your integrity might not be such a bad thing. It will make the promise public and give you and your team something to which you must be held accountable.
There are many things that help organizations create a winning culture and survive tough economic conditions, but the foundation is always character. Organizations founded on poor character will most likely end up facing some regulatory struggle. But, even if they can evade all legal issues, customers just don't want to do business with people who don't have integrity. Build an organization founded on character, and the rest will likely take care of itself.
David Lykken is president of mortgage strategies and managing partner with Mortgage Banking Solutions. He has more than 35 years of industry experience and has garnered a national reputation, and has become a frequent guest on FOX Business News with Neil Cavuto, Stuart Varney, Liz Claman and Dave Asman with additional guest appearances on the CBS Evening News, Bloomberg TV and radio. He may be reached by phone at (512) 977-9900, ext. 10, or e-mail [email protected]
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