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The beginning of a new year is a good time to discuss leadership and management. In this article, we are going to consider starting to manage or the first time manager.   Many of the managers we have worked with over the years have told us how they would manage differently if they were just starting out or given a second chance.

For example, when Chris Hanson started as a manager, he says that he was not a good listener.  In individual and team interactions, he was often so convinced he knew the answer, he interrupted employees before they had time to finish asking the question or offering opinions. In essence, he acted as if he did not care what his coworkers and teammates had to contribute. Employees soon stopped asking Chris questions, or offering their opinions. They learned quickly it did not really matter what they thought.  Early on in his management career, Chris might have been called a poor communicator and therefore less effective as a manager.

Many new or first time managers make the mistake of believing they need to know (have) all the answers.  For all managers there is a fine line between arrogance, confidence, and ignorance when employees seek answers or advice from a manager.  Managers can easily get into trouble when they make decisions in haste, fail to consider all the facts, or pretend they are certain when they are not.  Such managers falsely assume their job is to know all the answers.  Faced with not knowing an answer, our advice is to tell the employee you do not know the answer, and promise you will get back to the person with the answer in a timely manner.  Determining the best or right answer means talking to other managers with more experience, seeking outside professional advice, and finally, discussing the issue with your team.

In compiling the content for Chapter 8 in our book, we decided to provide a checklist of factors new managers starting to manage should consider.  Here is a sample of the advice we offer:

• Be honest and direct.  Say what you are going to do and do it.  Say what you will do and follow through. The worst thing you can do is to promise something and not deliver on your promise.
• Be Accessible.  Leave the cave; talk to employee and meet customers. We know many managers who retreat to their offices and do not come out until the end of the day.  All managers, but especially new managers, need to be visible.
• Listen well.  Ask questions and when the employee answers, repeat back what you have heard. Try saying: “This is what I heard you say…is that correct?” Some authors call this Active Listening.
• Be proactive.  For the new manager, being proactive means not waiting for a problem to develop or continue after you are made aware of the problem. When there is a problem on your unit, act directly and quickly, but make sure your supervisor is informed about issue before they need to ask you about it.
• Don’t hesitate to delegate tasks. One of the major mistakes of a new or any manager is they are a do it yourself manager. If you find your say “I’ll do that” often, you are probably a DIY manager.  As a new manager, you are not expected to do everything. You are expected to manage others, not do the work that others should be doing. However, it is never a bad idea to roll up your sleeves and show that you can pitch in and help when the situation calls for it.
• Be careful of friendships.  The transition to management is often difficult for the manager who has been promoted and now has to manage employees that once were peers.  The job of a manager is to help others achieve their best.  In doing that job, a manager must be fair, not show favoritism, and often that requires drawing a line in the sand of friendship. Once you are a manager, there will be certain things you will no longer be able to do at work with your friends. These activities must be reserved for after work.
• Manage your time.  New managers are faced with many new tasks. Tasks that you cannot do all at once. Understanding the scope of your daily, weekly and monthly activities and parceling your time out carefully will make your job and life as a manager so much better.  We have seen new managers who only work on the most immediately or biggest problem. Such near sighted managers need to step back to understand the bigger picture.  They need to consider all their tasks or goals and manage their time and priorities accordingly.  There is an old saying, control your time; do not let your time control you.
• Develop a plan for your first 90 days.  In the first 3 months of managing, it is important to learn about your employees and their work.  It is important that you make an initial good impression with your employees and they come to respect and trust you.  As a communicator, you need to gain employee input, and try to understand the work environment and the issues employees face, developing a consistent management approach, and setting clear expectations.

In the end, every manager is judged by the results he/she achieves and the methods and processes the manager uses to achieve their results through others.

If you would like more information on actions new managers should take in starting to manage, please refer to Chapter 8, Starting to Manage, in our book Finding The Right Path: A Guide To Leading And Managing A Title Insurance Company.  If you would like more information regarding how CBA can help you improve and develop your company, please visit our website at www.cbaltd.biz  or contact us directly.

Employee Morale is an elusive concept.  We often know when morale is low or negative, but it is hard to get our arms around what we can do to improve it.  Employee Morale describes how a group of employees collectively feel about the company, their leaders and managers, and their work.  Morale is affected by a number of variables, including: the employees we hire, the type of work people are assigned, work methods, management and leadership practices, and the physical work environment, to name a few.

The grocery retailer Whole Foods has been touted for its management practices that include giving small teams of employees in each store, a broad range of decision making freedom. For example, teams choose who will be hired to join their team; they govern how products will be displayed, work assignments, and what local vendors to use. The employees in each team are directly compensated based on the performance of their particular section of the store.  These practices undoubtedly contribute to team investment in the work and good morale.

One way to determine whether morale is an issue in your company is to either formally or informally conduct an assessment. Several business authors have suggested that behaviors associated with the concept of employee engagement are linked to morale.  The Ritz-Carlton Hotel group for example, measures employee engagement on a regular basis. The engagement surveys they use have shown the hotels with the highest levels of employee engagement are among the highest producing in terms of bottom-line results.

Using a formal process to assess employee morale may be more than you need at this moment, so we suggest a simpler process.  On page 114 of our book, Finding The Right Path, we list twenty questions about employee morale.  For example, we ask:

• Do employees say positive things about the company?
• Do employees talk positively about customers?
• Do employees interact with each other often?
• Do employees initiate actions without being asked or told?
• Do employees offer new ideas or solutions?
• Do employees recommend your company to their friends?

Answering yes to these questions suggest a company with positive morale. Answering no or affirming the opposite (Employees say negative things about the company, etc.) would indicate a condition of low morale.

One way to address these questions is to observe employee behavior as you walk around the office and ask your managers to do the same. Observe during staff meetings, when employees talk to customers, or when you have an opportunity to participate in direct work, like sitting in on a closing. Talk with your customers to help you answer these questions and finally, talk with your employees individually. When you are done, if you can answer “Yes” to the majority of the twenty questions, it is likely your employees are engaged and employee morale is high.  However, if you answered “No” to more than half the questions, it is likely you have a morale problem.

On pages 114 to 116 in our book you will find tactics to improve engagement.  Here is one of the simplest ideas for you and your managers to follow:  Provide frequent encouragement and praise to your employees.  Praising desired performance is a commonly understood management practice, and yet we seldom see enough of it in the work place.

In our experience, positive engagement can never be praised too much, however what one employee finds encouraging or reinforcing other employees may not. The old saying, “different strokes for different folks” seems to apply when we talk about praising.  For some employees, praise works best when it is private and delivered individual.  For others the more public the praise the better.

We all have different likes and dislikes and it is important to understand what people will favor.  We often turn to the DiSC personal profile system to help us determine how to provide encouragement and praise to different employees.  The DiSC categorizes people as Dominate (D), Influencer (I), Steady (S), and Conscientious (C).

For example, if we know an employee is a “D”, we know that person likes to focus on results.  Knowing this, we might praise the employee for completing an above average number of files for the day.  On the other hand, if we know the employee has predominantly an “I” profile, we know that person is very comfortable with people interactions and typically has good social skills. For that employee we might focus on providing praise for taking the initiative to interact with a new employee, a member from another team in the company, or a customer.

Additional guidelines for providing praise and encouragement include delivering your praise soon after you see the behavior you want to reinforce. The closer you deliver praise after the behavior you want, the greater likely hood your praise will be effective.  If you wait a day or two after the behavior occurs, your praise will be less effective, and waiting a week or longer may have no effect at all.

There are certainly lots of ways to praise and encourage our employees day in and day out.  Some of the things we can do are simple and informal, others more complex and require some planning. As a manager, one of the best things you can do is to have a broad and varied array of methods and ideas to choose from and use. The mangers job is to match praise and encouragement, with the needs and interests of specific employees, to fit the particular situation at hand.  A one-size fits all approach is the wrong approach.  Below is a short list of additional ideas that will help you facilitate your praise and encouragement. This list is small in comparison to the total number of ideas and methods possible. Think of our list as a starter. Add to the list with your own ideas.

• Perform a daily “walk around” in your office first thing in the morning. Stop and chat informally with employees and find ways to encourage them or praise them for their performance the past day.  Comment on something you recently observed.
• Review a file.  Verbally praise the employee for a closing package that has been prepared correctly and efficiently.
• Sit in the lunch room with who has ever assembled there.  Informally talk about work and how things are going in the office.  Find one or two things to praise in terms of overall team work or individual work.
• Give an employee a special project or task that will take advantage of his or her particular skills and will be seen as a challenge and exciting or interesting to the employee you have chosen.
• Sit down with an employee in their cubicle or office. Simply ask them how they are doing and ask them if there is anything you can do to help them with their job. Listen to what they have to say.  Show them that you are listening.
• Call an employee at home and personally thank them for a hard day’s work well done.  “I usually do not make a practice of calling staff during off-hours, but I know you had a tough day and I wanted to personally thank you for your effort today.”
• Plan ahead for your staff meetings on what you will praise and encourage.  Staff meetings create many opportunities to praise group performance and acknowledge individual staff excellence. When reviewing production or order count reports, find a way to praise for group performance. Praise for the overall production volume handled. Praise for getting up to date on policies. Praise for meeting a turn-time target for the month.  Praise on quality measures such as low error rates or decreasing error rates.  Acknowledge comments by customers in closings that refer to work well done.  Acknowledge phone calls you have received from customers that relate to overall team performance.
• Smile, show enthusiasm, get excited, exhibit some positive emotion. Your actions as a manager become encouraging to staff if they (i.e. your actions) contribute more to a positive and stimulating work environment. “When my manager gets excited, I get excited….it is nice to see!”

If you would like more information on actions you can take to improve employee morale, please refer to Chapter Seven, Employee Culture, in our new book Finding The Right Path: A Guide To Leading and Managing A Title Insurance Company. If you would like more information regarding training for and use of Inscape’s DiSC Personal Profile system, or how CBA can help you improve and develop your company, please visit our website www.cbaltd.biz  or contact us directly.

During the last years, title companies and businesses in general, have let a significant number of employees go. Now, there are positive signs the housing market is starting to improve, although the stability and pace of progress is still uncertain. Most economists agree the country is slowly coming out of recession and the trend will continue into 2013 and beyond. These positive signs mean hiring new employees will be a priority for many companies in the coming months.

Hiring for the future will be more important than ever for title companies because many of the employees who were retained were hired for a different set of skills than those needed today. More often than not, a prior employee was hired because the company had a long-standing opening and work was not being done. In this situation, it is natural to hire the first person who comes along with any technical knowledge, because he/she will have to jump in the job with little or no training. Good technical knowledge is certainly important but what if the person lacks some critical knowledge or is not a good fit with the “Culture” of your company?

Work culture means, “The way things are done around here.” It includes the mix of people you have at work, the number of women and men, race and ethnic identification, along with other demographics like the number of young and old, experienced and inexperienced workers. Company culture also is heavily influenced by the vision, values, and goals of your company / owner, the way work is performed, and how employees work as a team.

We know of an independent title agent who recently hired a new manager who came from a corporate underwriter. Although the new manager had very good experience and a strong technical background, most of his peers in his new company, and the CEO, realized within a few months that the fit was not right. The agent was looking for someone who would be entrepreneurial in his thinking and look outside of the box for new opportunities. What the agent got was a person expected to be told what to do and who only looked on the cost side of the equation. Worst of all, he was not a team player.

Estimates are that a wrong hire will cost a company up to 3 times their salary for each year the person is at work. Having had friends who have recently gone through the process of seeking new employment, we know the landscape for hiring practices has changed dramatically in the last several years. For example, on-line applications and screening processes are now common for larger companies. However, for the smaller agent and most title agencies in general, a few simple steps or rules are important to consider when hiring a new employee:

1. Values. Know who you are as a company. This means for example, it is clear what values the applicant needs to align with yours.
2. Write a job description. Be clear on the job skills needed. Write these down. If you do not have a good job description, create one.
3. Advertise widely. Do not limit your search to one medium. Try social\business networking like LinkedIn, for example.
4. Require a completed job packet before screening. If you do not utilize a section of your website for this, create a manual application packet that prospects have to complete. How complete and thorough an applicant completes this information is a good way to screen applicants. Think of the application as a test.
5. Screen applicants. An easy low-tech process to use as a screen is a phone interview. Phone interviews should not be lengthy; their aim is to quickly eliminate non-contenders and make your time more efficient. Use a script to be consistent.
6.  Interview top candidates using a written interview Guide.  Too many people interview with a blank piece of paper and then wing it. A good interviewer has a carefully prepared set of questions to ask, a Guide. The interview Guide eliminates inconsistencies and ensures you ask a standard set of questions during each interview. Look for more detail on this concept on page 108 in Finding The Right Path: A Guide To Leading And Managing A Title Insurance Company.
7. Score interviewees.  The interview guide also enables you to score each applicant.  Thus you have a systematic way to compare applicants.
8. Bring back your highest scoring applicants for a second round of interviews. Consider enlisting additional key staff members to take part in the interviews for your finalists.
9. Never hire a candidate because you need to fill a hole quickly.  In the end it may cost you.
10. Hire using a 3-month probationary period.  Make sure you explain this to your new hires upfront.

Here is one final idea we like but often do not see in title companies.  We recommend creating a job skills sample or test for applicants you bring back for a second round of interviews.  This means asking the applicant to perform some aspect of their future work.  For example, for an applicant who is interviewing to be a receptionist, ask them to answer several live calls. To set this up, ask a current staff member to first explain a few of the basic phone answering procedures you’re company uses.  This person then sits by the applicant and makes observations and provides feedback.  The results are not only a sample of the applicant’s performance but also valuable insights about the applicant from another person on your team.

The same work sample idea can be used for any number of positions commonly found in title companies. For example, for an examiner position; have the applicant examine a file. One of your experienced examiners can assist with the work sample.  For a closer position, have the applicant prepare settlement figures. One of your experienced closers can assist with the work sample.  Finally, for a manager position, have the applicant make a presentation in front of a team or manager group about a topic of their choosing, followed by a Q&A. An experienced manager on your management team can assist with the sample.

You may find this process a little awkward or uncomfortable at first, but remembering how much it will cost you if you end up with a bad hire should ease the pain.

If you would like more information about actions you can take to improve or maintain your company culture, like making good hires, please refer to Chapter Seven, Employee Culture, in our new book Finding The Right Path: A Guide To Leading And Managing A Title Insurance Company.  If you would like more information about CBA and how we can help you improve and develop your company, please visit our website www.cbaltd.biz  or contact us directly.

Strategies for a Digital Age

Managing by Metrics

In Title companies not every group of people constitute a team.  We believe the most important factor that describes a true team is the group must have a set of goals that can be achieved only through the cooperation and combined efforts of all its team members.  In title agencies there are many groups described as “teams”.  For example, production teams, escrow teams, management teams and sales teams.  Often these groups do not cooperate fully among each other and work toward common goals.  More often, these teams do not work well with the other teams in the company.   Title production and Escrow teams are common examples where there is frequent infighting or complaining back and forth.

Leaders can improve any team by providing clear written expectations, developing goals, facilitating productive team meetings and having a consistent set of procedures for effective communications among team members.  Managers can improve teamwork within production and escrow teams by focusing on having team members take initiative, anticipate problems, problem solve together, and providing feedback to each other.

Solving inter-team work problems (i.e., problems between teams) in a title company is perhaps more difficult.  Often geographic locations and distance create barriers as do differences in the type of work performed.  Production staff often think all sales people do is go golfing or to lunch with customers.  Sales staff often complain that production staff are not customer focused.  To build stronger inter-team work, we recommend that members of different teams visit with and “shadow” workers on other teams to “spend a day in some else’s shoes.” Another idea is for teams to invite members from other teams to participate in their team meetings.

One fun and energizing way to work on improving team work either within your existing teams or between the teams you have in your title company is to hold a Team Development Day.  We suggest planning this type of day for when the weather is generally warm and nice outside and you can evoke a “retreat” type atmosphere in a nearby park or resort where you can get away from the office.  The structure of the day can include several team building activities, a time period to discuss team strengths and needs and plan solutions, a lunch, and end with a social gathering toward evening.  We often act as facilitators for this type of event and structure the day so that there are special prizes and awards presented at the end in a celebratory team atmosphere.  We prefer team activities that do not rely on a large degree of physical skill but focus more on creative team thinking and planning together. There are several books available from your preferred business book source that list and provide instructions for team building exercises to use.  Here are instructions for two of our favorite team building exercises.

Four Truths and One Lie.  This first exercise is a great team ice breaker.

Instructions

Group:  One team of 6-8 people.

Purpose:  To have team members learn about one another.  This is good for new teams and teams with considerable time working together. 

Equipment:  Paper and pencil.

Set up:  Team members are to write down four truths about themselves and one lie.  The truths can be about anything in a person’s past.  The truths cannot be known by anyone in the group.  Some people like to select truths and the lie all from one category, for example, places you have lived.  Others like to have the five items come from different categories.  For example:  places you have lived, family members, a musical instrument you can play, languages spoken, military service, school, college, or job experiences, pets, marriages, children, vacations, hobbies, skills.  Whatever you select, remember, the one lie must be plausible.

Steps:

1. Announce  “Each of you is to write down four truths and one lie.  Allow five minutes.
2. One person at a time reads all five statements.  The five statements must be read twice, without explanation or comments.
3. The group is to form a consensus on which is the lie.  They cannot ask questions, only review the five statements.
4. Allow two minutes for discussion, then have the person reveal the lie.

The Blindfold-Order.  This exercise is fun and physical.

Instructions

Group:  One team of 6-8 people.

Equipment:  One blindfold per person. Numbered stick on-badges to be pinned or placed on each team member’s back.  The number badges must be labeled 0 to 7.

Purpose:  To learn the importance of communication, especially when a channel of communication is broken.   

Set up:   Team members are blindfolded and placed in a midsize circle approximately at arm’s length on both side of each team member.  Make sure the area is free of any object that could be tripped over or run into.

Steps:

1. Announce to the blindfolded group: “Each of you will be given a number.  The team’s task is to find all of your team members and then line up in numerical order.  Group members cannot remove their blindfolds. You cannot speak in any way or make any verbal sounds (Repeat this direction several times). When the team is in the correct order, I (the facilitator) will tell you it is correct and you can then remove your blindfolds.”
2. Pin a number on to each person’s back, take them aside, and whisper in their ear the number you have given them. Then place them back in the circle.
3. Then say:  “You may begin when I say start. Please remember if I say stop, someone has strayed too far from the group and everyone is to stop immediately.  I will re-point the person in the right direction and then re-start the group.”
4. Then start the group by saying: “Ready, 1, 2, 3, start.”
5. Watch for group members who stray too far from the group and point them in the right direction.  Make sure no one says anything verbally.  Team members can make sounds in other ways but do not prompt this. Make sure one person has the number “0”. If you have more than 8 people in your group, or some people who cannot participate, assign them the task of being observers to take notes on the specific actions the team takes to work together and communicate without using verbal communication.
6. After the team completes the task, hold a debriefing session in which you have the team talk about what behavior each team member exhibited and what team actions led to successfully solving the problem.  Discuss which team tactics seem to be effective and which did not.  Finally, relate the discussion to the different types of communication that teams in your company must exhibit on a regular basis to be successful.

Please refer to Chapter Six, Developing Your Team, in our new book Finding The Right Path: A Guide to Leading and Managing A Title Insurance Company.  If you would like more information on team building, help on improving team functioning in your organization, or information on how to hold a team development day, please visit our website www.cbaltd.biz or contact us directly.

We are often asked: If you had to choose one metric for a title company to measure on a monthly basis, what would it be?  Of course there are several possibilities:  Orders and revenue just to name two.  But, consider the following number: 145.  What does it tell you?   The answer is nothing, because you don’t know enough.  In math, it takes at least three numbers to predict a trend, so let’s add some numbers.

Consider the following table.  What does it reveal?

Consider the following set of numbers.  What do the numbers reveal?

  153         136         159         172         149         144         145         127         133         129         96           104

As students of math we can determine there are 12 numbers, the sum of the numbers is 1645 and the average for the 12 numbers is 137.

If we were to plot the data we would also report a downward trend, such that the last six numbers total 80% of the first six.  Finally if we take our single number 145 we can say it is above average by 5%.

Now suppose we tell you these numbers were your paid orders for last year.

As the owner of a Title Insurance Company, what should you do?  The answer is nothing still, because you don’t know enough.  The fact is no single measure, even revenue, is enough to make decisions on.

However, if you know you earned $2,919,875.00 from your 1645 paid orders, now we know your average revenue per paid order is $1,775.00.  Armed with this information, we can do a lot.

For example, we can calculate how many Paid Orders we need per employee or FTE.

Paid Orders per FTE = Orders paid ÷ Full Time Employees

FTE‘s are a substitute measure for employee salaries. “FTE” stands for Full Time Equivalent.  We prefer using Equivalents instead of employee headcounts because FTE’s take into account the number of working days in the month, total paid hours and overtime hours.  To determine your total FTE’s, you first have to determine what one FTE is for the month in question and then you divide the total number of paid hours you have in that month by the regular paid hours for one full time employee.

For example, if there are 20 days in a month and you pay for 8 hours a day.  One Full Time Equivalent is

20 * 8 = 160 Hours

To determine your total FTE for a period, you divide all paid hours including salary hours by 1 FTE.  For example if in the month you paid a total of 1,760 hours then you total FTEs are :

1,760 Hours ÷ 160 Hours = 11 FTE

We like Order (paid) per FTE because it is a ratio that expresses a simple relation between revenue and labor expense.  It is a short-hand way of measuring Labor Ratio.  The only problem is determining paid orders has to wait until the month closes out, sometimes 2-3 weeks after the end of the month.

The alternative is to use Open Orders.  Orders opened is another substitute for revenue and has the advantage that opened orders can be tracked daily.  In addition opened orders is a measure of work.  Finally, we like Open Orders per FTE because it is what we call a “leading measure”.

Open orders can be easily counted and tracked daily and they “lead”, or are ahead of, revenue in terms of accounting by one to two weeks if not months.  In other words, open orders give us a head start on what will be in the pipeline in terms of what we can count on to pay the bills.  Open Orders per FTE, allows us to compare revenue to labor, but much earlier in the business cycle.

At its simplest, once you know your average revenue per open order, then we can determine the number of open orders we need per employee to break even or make money.  Using open orders as a substitute for revenue has some obvious problems.  First, not all orders turn into paid orders, and second, average income per type of order can vary significantly.  To counter these problems we recommend determining your average percent of open to closed (open orders for a period  ÷  closed orders for a period).  This measure can be expressed as a percentage.  For example, we close (paid) on 75% of the orders open in a month.   When measured across a long time period (a year) this measure can be very predictive.  However a better measure is your Actual Capture Rate.  This refers to the percentage of orders you open that actually close (paid).

If for example you know that 80% of your open orders will be paid in less than 40 working days, you can project revenue into the near future.  Capture rate also measures the health of your business.  For example, if in the first quarter you closed 79% of your orders, but in the second quarter you only close 66%, we know something important has changed in your orders.  Perhaps more short sales.

Establishing a standard for Open Order per FTE for your company may be one of the most important things you can do.  Open Order per FTE is a ratio, for example, 10 to 1.  By standards we mean the level needed to meet your profit goals.  Your Open Order per FTE standard represents the level below which you do not want to go in any given month.  To help, let’s look at a brief example.

The Title Company in the table above had 172 open orders in April and an employee equivalent of 12.25 employees.  That means the ratio of Open Orders per FTE for April is 14.04:1 (i.e.,172 /12.25 = 14.04).  So far so good, but we still don’t know if 14 to 1 is a good standard.   In setting Open Order per FTE standards and goals for your company, you have to determine your break-even point and the level of profit or profit margin you desire.  For example, we break even at 12 orders per person and need more than 15 orders to make money.  Using Open Orders per FTE as a metric on a monthly basis will give you a proactive way to help determine whether your company’s staffing patterns are correct and enable you to look ahead to what your production needs and revenue results will be.

We know the standard for your company will be different from our example.  Each title company operates under different conditions, markets and regulations, and has different infrastructures, designed to deliver their products and services.  Average revenue per order and the cost of your employees also needs to be taken into account.

If you would like more detail on the steps to follow to calculate the FTE’s for your company and setting Open Order per FTE standards and goals, please refer to chapter five, Measures and Metrics, in our new book Finding the Right Path: A guide to leading and managing a title insurance company.  If you would like more information about CBA and how we can help you improve and develop your title company, please visit our website www.cbaltd.biz or contact us directly.

Making Strategic Moves,  was presented at the ALTA Business Strategies Conference in Louisville, KY.

The presentation contrasts traditional revenue strategies used by Title Companies with a Blue Ocean Strategy.

If you are interested here is a link to our slides MAKING STRATEGIC MOVES PDF