What Steve Jobs knew about talent – and what the mortgage industry needs to learn – Flavin

Steve Jobs wasn’t known for his diplomacy.

But behind the bluntness of the famous quote, “you’re better off with a hole than an a***hole”, lies one of the most important truths in business: keeping the wrong person in a seat doesn’t just fail to help your firm – it actively destroys it.

In the mortgage industry, where good people have never been harder to find, this truth is more relevant than ever. Broker firms, networks, and lending operations up and down the country are quietly suffering – not from a shortage of staff, but from a fear of being without them. And that fear is costing them far more than they realise.

 

The staffing paradox nobody talks about

Ask any mortgage business owner about their biggest challenge and the answer is almost always the same: finding good people. The talent pool feels shallow. Qualified advisers are scarce. Experienced administrators, paraplanners, and case managers seem to be perpetually spoken for.

So, when you have someone – even someone who is mediocre, difficult, or quietly disruptive – the temptation is to hold on. Better the devil you know, right?

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Wrong.

This logic, however understandable, is the single most expensive mistake you can make. Because the real cost of keeping the wrong person isn’t their salary. It’s everything else they take with them.

 

What Netflix accidentally discovered

In 2001, during the dot-com crash, Netflix was forced to lay off a third of its 120-person workforce. CEO Reed Hastings expected morale to collapse. Instead, something remarkable happened.

The remaining 80 employees ended up accomplishing almost double what the full team of 120 had been doing before. The atmosphere buzzed with energy, creativity, and drive.

What Hastings and his HR director Patty McCord realised was that the removed employees hadn’t simply been neutral – they had been a drag. Not necessarily through laziness or malice, but because mediocrity is contagious. Average performers bring down the quality of conversations, slow decision-making, sap management time, and quietly signal to your best people that standards don’t really matter here.

Hastings called it ‘talent density’ – the concentration of exceptional ability per person in a business. And when it’s low, even your stars start dimming.

Sound familiar?

 

The mortgage industry’s uncomfortable truth

The mortgage sector has a particular vulnerability to this problem, and it stems from a very specific anxiety.

Compliance requirements mean business owners feel they cannot afford gaps in their team. The regulatory burden of running a directly authorised (DA) firm – or even operating as an appointed representative (AR) – creates genuine pressure around capacity. If your only administrator goes, who processes the cases? If your only adviser leaves, who sees the clients?

Consider a pattern that plays out across the industry with depressing regularity.

A broker principal knows, in their gut, that one of their advisers isn’t right. The numbers are acceptable – not impressive, but acceptable. The attitude is fine – not toxic, but subtly passive. Feedback sessions come and go. There’s a vague plan to ‘monitor things’. Months pass. The principal, exhausted from running the business, convinces themselves it’s manageable. Meanwhile, their best member of staff – the one quietly carrying the team – starts to wonder why nothing ever changes. Then one Monday morning, that person hands in their notice. Suddenly, the principal has the gap they were trying to avoid, and they’ve lost the person they could least afford to lose.

You know this story. You may be living it right now.

 

The hidden cost you’re not measuring

Here is what the wrong person is actually costing you, beyond their wage:

Your best people are watching. High performers are acutely sensitive to their environment. When they see someone coasting or behaving badly without consequence, they draw conclusions about your leadership. Some will quietly start looking elsewhere. Others will reduce their effort to match the prevailing norm. Both outcomes are devastating.

Management time haemorrhages toward the wrong people. Think honestly about how many hours per week you spend managing, worrying about, or working around your weakest link. That time is stolen directly from your top performers, your clients, and your own development.

Your culture is being written right now. Culture isn’t a values statement on a wall. It’s what you tolerate. Every day the wrong person remains, you are broadcasting to your entire team what behaviour is acceptable. That signal travels faster than any memo you’ll ever write.

The gap feels bigger than it is. When someone leaves, businesses consistently find they cope far better than expected. Tasks get redistributed, processes tighten, and it often becomes clear the departing person was creating as much work as they were completing.

 

“But we can’t afford to have a gap”

This is the objection every mortgage business owner raises, and it deserves a straight answer.

You already have a gap. A gap in performance, a gap in culture, and a gap between what your business is and what it could be. You’ve simply filled it with a warm body and called it a solution.

A genuine vacancy is visible. You know it’s there. You can recruit for it, redistribute work temporarily, and set a timeline. A problem employee is invisible damage – slow, cumulative, and far harder to fix than an empty desk.

The firms in this industry that consistently punch above their weight aren’t the ones with the most staff. They’re the ones with the right staff – lean teams of brilliant, motivated, aligned people who hold each other to a high standard and attract more of the same.

 

The ‘Keeper Test’

Reed Hastings developed what he called the ‘Keeper Test’ from this experience. The question is simple: if this person told me they were leaving tomorrow, would I fight hard to keep them – or would I feel a quiet sense of relief?

Here is my own version, which I find even more clarifying: if you were building your business from scratch tomorrow, would you hire this person?

If the honest answer to either question points in the same direction, you already know what needs to happen. The only question is whether you’re willing to act on it.

This isn’t about being ruthless. It’s about being honest – with yourself, with your team, and ultimately with the person concerned. Most people in the wrong role know they’re in the wrong role. A candid conversation, handled with care, is a kindness. The prolonged mutual pretence that everything is fine helps nobody – least of all them.

 

What to do instead

None of this means acting hastily at the first sign of difficulty. It means being deliberate and honest about the standards you hold, the conversations you have, and the timelines you stick to.

Be clear about expectations. Many performance problems stem from ambiguity. People cannot hit a target they can’t see.

Have the honest conversation early. The moment you notice a pattern, address it – not six months later when frustration has built on both sides.

Set a genuine timeline and honour it. Give people a real opportunity to improve. But a chance with no deadline isn’t a chance – it’s an indefinite extension that serves nobody.

Recruit proactively, not reactively. The best firms maintain a pipeline of potential hires even when there are no immediate vacancies. That way, a gap never becomes a crisis.

Reframe the vacancy. An empty seat isn’t a failure – it’s an opportunity. It signals to your team that you have standards, and it’s a chance to find someone who raises the bar rather than lowering it.

 

The Jobs principle in practice

Steve Jobs was talking about Silicon Valley engineers when he made that remark. But the principle scales perfectly to a three-person mortgage brokerage in Chelmsford or a 50-strong firm in Leeds.

The standard you walk past is the standard you accept. And in a talent-scarce market where your reputation, your client outcomes, and your culture are your most valuable assets, accepting the wrong standard is a luxury you genuinely cannot afford.

A hole can be filled. With the right person. On your terms. In your time.

An a***hole, as Jobs well knew, costs you far more than the vacancy ever would.

The mortgage firms that will win the next decade aren’t the ones scrambling to fill every seat. They’re the ones brave enough to leave a seat empty until the right person walks through the door.