I’m YOUR BOSS! Toxic managers and your margins

ProsperitasForward targets margins of 22% for all of our clients as a baseline. We increase that number where our client’s footprint is in states with high premiums, and decrease that number where our client operates in low premium states. Margins less than 15% are our biggest red flags.

When margins are unimpressive, we like to look behind the curtain to see how the managers are behaving. Managers with direct reports are leaders, and being a good leader requires skills that are sometimes only learned.

Sometimes, we find that these managers do not know how to ‘lead.’ They impose their anxieties, insecurities, inflated egos, and more into what otherwise might be a great business. This behavior is toxic to your business and unless notified, owners may have no idea the managers are acting this way.

A toxic person in a leadership role will directly impact your margins. A manager with this personality defect can make a dedicated escrow officer stop caring. This results in opportunity for escrow losses, wire fraud, or worse. Alarm bells should ring at a title company if a valued employee (and their book) suddenly leaves to a competitor after a 20-year career. When someone leaves with no notice, you need to know why. If there is conflict and drama within your team, it can almost certainly be traced to a manager with a problem. If people start to suddenly ‘retire’ early, you should be asking questions. Remember, people typically do not leave jobs, they leave managers.

Finding out how your leaders and managers are behaving will be a challenge. You may have no idea what is going on, but rest assured, your staff and your competitors will.

Here’s what we recommend:

Find out what’s going on.

Find someone neutral and unassuming to poke around. We do this routinely as part of our process engineering assessments. We talk to the staff who are ALWAYS willing to open up to us. They find relief in having someone listen to them. Our experience is that staff will be much more candid to an unbiased third party (like us), than a coworker.

Have a “truth talk” with the individual you suspect to be the culprit.

Let them know what others are perceiving and ask how they feel they are doing at work, at home, or the current direction their career path has taken. There is always a reason for their behavior. They may be operating on the flawed assumption that what they are doing is okay.

Warn them and document the behavior.

We always find it helpful to be clear about the consequences while being helpful to offer suggestions so as to alternate patterns of behavior.

Remember what made your company a success in the first place

Is there a way to improve alignment with your vision? Explore how you might also improve alignment with your core values. 

Do not be afraid to pull the plug.

Some people are open to constructive criticism and others are not. Consult with your HR and Legal team and follow the rules, but if all else fails, be sure to rid your company of these people. Failing to do so will allow the virus of toxicity to spread and hurt your business. Our experience is that removing them will improve the production and health of your firm.

We see the inner workings of title companies all over the country. The patterns of success are very clear. The most successful of our title clients are led by good, honest, hardworking and virtuous people. They behave well, act with integrity in all they do and treat their people with compassion and respect. Do that and you too will attract success.

Best wishes for a prosperous future.

Howard