Why recruiting the right executives is key to next-generation success.
By Rick Glass
Editor's note: This select print feature originally appeared in the July 2016 issue of MReport magazine.
Should leaders be concerned that tried and true leadership principles won’t be as effective when dealing with younger team members? Most definitely. It is not hyperbole to say that there has never been a time when developing new leadership principles has been more important.
In fact, to employ the same methods that have been used for generations would be a grave mistake for managers when dealing with millennial employees, particularly those who are salespeople. Their expectations, experiences, and strengths are governed by a vastly different set of values from those of earlier generations. This does not mean their values are diminished by comparison, though. In many respects they are much more evolved.
At the center of the matter is something that famed author Patrick Lencioni wrote about in his book, “The Five Dysfunctions of a Team: A Leadership Fable.” Specifically, it’s what he refers to as the “dysfunction of trust.” Generational differences have been the source of distrust throughout time, but they can be moderated through enlightened management. For example, if management insists on rigid adherence to the status quo and rejects new approaches, they are often expressing distrust in the ideas of the next generation, something that can severely limit their potential for success. If they are to lead millennials effectively, executives must understand and connect with them on several levels.
Additionally, leadership that can build for the future possesses the ability to identify and tap “real” potential. Only the most conscientious executives will truly be able to uncover, recognize, and tap the potential often overlooked in the overly bureaucratic, politically correct, and structured “old school” environments we frequently see in our industry.
What Makes Millennials Different as Employees?
It really starts with their aforementioned values. This young group of professionals seems very concerned with things other than income alone, which has been the main driver for so many generations in the past. Millennials have grown up at a time when all things seem possible—something they have witnessed and experienced daily thanks to technology, entertainment, and media accessibility. At the same time, they have seen global conflict that is also unprecedented and is extremely difficult to understand when compared to past conflicts. What has this meant to their development during their formative years? Many believe that this generation is more concerned with doing something right for the world rather than simply making a buck, but it is more than that. Millennials are very strong team players and are highly interested in making a difference in the organization’s success. This is a significant departure from the past, when commissioned loan agents hopped from one company to the next whenever a competitor offered a better compensation carrot. Employers will do well to keep this in mind as they seek to inspire millennials to their highest performance.
SmartCEO magazine writes extensively on this idea and on managing millennials in general. A recent article was particularly revealing; one of its points was that if millennials believe a company’s product will improve the quality of daily life for its users, then they will be especially engaged in making a greater contribution to the end result in order to gain a sense of purpose in their work. Following that logic, lenders may want to stress the importance of the mortgage lending mission in a more meaningful context: helping people acquire homes that will enrich their lives and their financial futures. And while there is good money to be made in the process, the millennial is more fulfilled when everyone pulls together to be successful.
Additionally, millennials are going to do better in a less structured environment, one with fewer restrictive factors surrounding schedules and protocols they regard as old-fashioned. Time magazine cited a report from 2013 from PwC, a global consulting and accounting firm, which showed that millennials prefer flexibility that permits them to start their workdays later and put in time at night. They do best when they don’t feel like “slaves to a desk” or dependent on face time with the boss. While mortgage office workers need predictable schedules, it is less true for MLOs, particularly considering that millennials truly live with their mobile devices and are accessible virtually 24 hours a day. The traditional “my way or the highway” approach was a fact of life for a very long time in the mortgage business, but it is less likely to be successful with the millennial generation, due largely to their collaborative experiences in so many facets of their lives.
The “Shared Economy” Makes Things Fundamentally Different
The shared economy is a great example of the collaborative experience that is fundamental to the millennial mindset. This is the largest generation in U.S. history, and they have never known a time when the world’s information was not at their fingertips. They have grown up with the capability of having almost everything they could possibly want to buy online and deliverable within 24 to 48 hours. They have gaming consoles that immerse them in virtual environments with cinematic-level graphic realism, and they have seen economic and geopolitical catastrophes that have changed the way they think about careers, indebtedness, travel, and many other aspects of society. They communicate instantaneously with one another, both individually and collectively, from anywhere in the world. All this has led to what Forbes refers to as “an economic model where technologies enable people to get what they need from each other—rather than from centralized institutions.”
Millennials understandably view the world as a collaborative place where access to transportation, goods, rooms, relationships, opportunities, and ideas are shared concepts. We have been an acquisitive society for a very long time, but the next generation is more interested in sharing goods, services, and ideas than necessarily purchasing them. How can this not make things fundamentally different when it comes to motivating and leading them? Some estimates anticipate that the mortgage industry will need as many as 200,000 new loan officers over the next 10 years, and the business needs to understand, attract, train, and lead those employees. That necessitates having managers and executives capable of recognizing potential in young people and tapping that potential if their companies are going to be successful.
Every C-suite executive should be determining whether their managers can adapt to and lead in this inevitable paradigm shift, and just as importantly, what questions they should ask millennials to identify the desired potential in their character. What experiences demonstrate their innate ability to adapt and thrive in shifting environments like today’s mortgage industry? How have they dealt with complex challenges within tightly matrixed parameters analogous to the highly regulated lending world? How do they blend a personal approach with technology to create highly positive borrower experiences? Executives in every aspect of lending need to understand and embrace new thinking if they are to lead millennials successfully—and it is up to the C-suite people to find those top executives.
Leading Millennials to Succeed
Renowned customer service expert and consultant Tony Marbury has written extensively about maximizing millennial potential by unlocking their passion, igniting and fostering their creativity, and by encouraging teamwork. A mortgage lens focused on leading millennials reveals several key governing points:
- Be idealistic. Make certain the message is not all about market dominance, growth, and making money. Emphasize personal development, group dynamics, and the social purpose of the business. What is the company doing to make the world a better place? How can a young individual contribute to the organization’s success? Millennials want to do something important, to make an impact and be inspired. Do you have the platform to encourage and enable this? Many do not.
- Be inspiring. Lenders are in the business of helping people fulfill their dreams of homeownership and building environments that help families and America thrive. When you look at it that way, few businesses are positioned to do more important work. Inspiration should be part of your communication culture.
- Be electronic. If your company has not invested in technology, particularly mobile capabilities that allow the sales force to do everything remotely that they can do in the office, it is time. Fortunately, there is great cloud-based technology out there that is surprisingly inexpensive to deploy. The mobile technology should not stop there, however; it must also be aimed at millennial borrowers and others who do most of their Internet activities on phones and tablets rather than on desktop computers.
- Be networked and team-oriented. You may not be able to have regular meetings with all employees attending in person, but you can communicate regularly via other networking tools. Millennials like being included and staying in the know, particularly using the mobile devices that are rarely out of their reach.
- Be respectful. When you live in a world where so much of what you do and say can be shared globally in seconds, you learn respect. Millennials are renowned for their ability to get along with others, to pull and assess information, and to learn and adapt. They will seek professional environments that encourage and prosper by expanding those capabilities.
The C-Suite Challenge
CEOs may not have to have all the answers on hiring, training, inspiring, and managing younger professionals, but it is imperative for them to have executives who do. This is not as simple as it sounds. Experience has taught us that identifying the right executives, tactfully approaching them with an attractive and meaningful value proposition, and then accurately evaluating them has never been easy. It is something that requires exhaustive research, significant experience, and deep industry connectivity, along with a persistent, disciplined focus and tremendous amounts of time. Now, with the differences involved in leading millennials, we are adding an entirely new dimension to the executive recruiting challenge. If you expect to manage and inspire the next generation, you must consider leadership talent that understands the vastly different needs of millennials, recognizes their potential, and is capable of harnessing that potential to make a real difference. These added dimensions complicate the executive search effort enormously, but take heart: The recruiting sector has been preparing for this for a long time. Expert advice is available to help senior leaders prevail over this critical C-suite challenge.