In the development of developing a company or branch culture, we must start by setting your expectations.
These expectations will many times take the form of standards. The standards of your branch or company will be a reflection of your expectations. In addition, they set the stage for effective coaching and monitoring—two topics that we focus upon in our leadership course.
The Most Significant Standard?
It is more likely that the branch or company will have a productivity standard than any other standard. For loan officers this may include volume, number of loans or gross revenue produced per month, quarter and/or on a yearly basis. For a processor or closer, it may be the number of files that go to closing each month. We will address the question mark after the above caption in a few moments. First, let’s address a very central question—
For commissioned loan officers, should there be a production standard?
Some would argue that a loan officer on 100% commission that is not using a desk and is not being provided with benefits, costs the branch nothing. Therefore, any loan brought in is an additional revenue source without adding to the expenses significantly. In reality, you cannot take a look at the costs in monetary terms. The loan officer, especially if they are less productive, will use resources of the branch—from processing to the manager’s time. There are a limited number of resources and the use of these by a low-level producer may preclude the use of resources for other important tasks such as recruiting. It could also be argued that less productive loan officers use a disproportionate amount of the company’s resources in this regard.
Another issue is the development of a company culture or atmosphere. Top producers tend to want to participate in an environment in which they are challenged. It is hard to be challenged by those producing one loan each quarter. That is why very productive branches tend to get stronger. And these branches are likely to have significant production standards.