Management

Revolving Door Theory

Recruiting typically takes 4-6 months lead-time:
    4 - 6 months for agent productivity;
    1 ½ - 3 months for closing:
    10 - 15 months for a return on investment.

Observation:
In this real situation the manager recruited better than projected. Around February-March, he made a decision that he was "full", stopped and lost his momentum.

We held a meeting with him in May pointing out concern and predicted a minimum of 6 months in lost revenue and an equal shift in the break-even phase.

He adamantly denied saying we would not see this. He asserted that he was substantially ahead of schedule; he needed to take care of the people he had so they wouldn't leave. They left! He went back to recruiting aggressively.

There were two projections by the manager. The first was the manager on his own. The second, more conservative, occurred after we had "coached" the manager on what we felt to be more accurate assumption.

Observation:
The manager was very competent and dedicated. We consider him to be an excellent manager who simply made a single error in his decision. His decision created what is called a phase shift. The best he could do given this phase shift was to recover 6-7 months later. Notice the illusion of current positive performance in February and March justified a bad decision

Observation:
Barring increases in expenses and a shift in the market, we must look to number of agents & recruiting. It is interesting to notice how well expenses are forecast in 1-2 to actual.

Quantum Management Systems

1776 Park Ave., #770-242
Park City, Ut 84060

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435-604-7244 Fax

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1992 - 2009

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