Well over ninety percent of the production managers in this industry are what we call “producing managers or owners.” That is—they carry a personal pipeline of production in addition to managing other producers. Why is this so?
- Most producers become managers not because of their potential to become great managers, but because of their success at personal production. The personal production makes the producer a target for recruiting and the management slot is a tool for this recruiting.
- The personal production of a manager helps support the branch economically. It provides a base of income for the branch that the company can leverage towards profitability. If the branch needs six million in monthly production to be profitable and the manager producers three million monthly, the branch is that much closer to profitability.
- Most companies that hire branch managers provide a compensation plan that encourages personal production. That is, the salary is a lower level and the overrides do not provide major income unless the branch grows very large. Keep in mind that a high producer may be used to earning $100,000 to $500,000 or more annually. A base salary in the $20,000 to $40,000 range is not going to be significant part of their income.
Of course, explaining why we have producing managers dominating the industry does not at all help us make a decision as to whether a manager should halt personal production in favor of growing the branch larger. As a matter of fact, for the most part the industry assumes the manager is producing and attempts to reconcile both goals instead of making it an “either/or” decision.