As I have spoken with CEOs around the country, I’ve found that one of the most challenging problems leaders are facing in the industry today is uncertainty about what to do with underperforming loan officers. These are the LOs who are not generating significant business or contributing to the greater success of the company. Managers need to quickly develop these underperformers into successful originators, but many are not sure where to begin.

Here’s the good news: underperformers are not a lost cause. They are simply in need of someone who will invest in them and help facilitate their development. In fact, by implementing the steps outlined here, managers can empower their loan officers to experience significant growth and become strong producers.

DETERMINE THE REASON FOR UNDERPERFORMANCE

Underperformers fall into two categories: they either lack the will or the skill to succeed. Those who lack the will are simply unwilling to do what it takes to increase their production. However, other loan officers lack the skill, meaning they want to improve but do not know how. These are the people who have not been trained, pushed, or held accountable.

The industry assumes that if someone has been working for five years, they should have the experience they need to be successful. However, five years of bad practices are not going to improve anyone’s business. Instead, they have just built bad habits that keep them from reaching their full potential. If a manager is going to grow their team’s production, they need to identify the people who are eager to improve but have not been given the proper tools to do so.

When leaders talk with their underperformers, they can start with a question: “Are you pleased with where you are?” If loan officers say they are not, the leader can pivot the conversation to their future, finding out what kind of business they would like to be doing.

If their reply is something along the lines of, “I’m currently at two units and would like to be doing four,” managers should learn why this goal is important. LOs need to identify their “why,” determining the reason that improvement is necessary for them both professionally and personally. When they are open to this conversation and can say, “I’m not at my best, I need to get better, and this is the reason why,” leaders can assume that this is a person who lacks the skill, not the will. They are ready and willing to change. Now, the manager can begin the process of developing them into the producer they aspire to be.