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Three Solid Reasons to Educate the Public About the Mortgage Industry

When we talk about education as leaders in the mortgage industry, we’re usually referring to employee training and developing the knowledge base of our teams. Of course, we do want to make sure those in the industry are trained on best practices and have the appropriate knowledge bases and skill sets to do their jobs well. But our employees should not be the only ones we are seeking to teach. Those outside of the industry–those within the general public–need to be educated as well.

Companies in many industries, and ours certainly is no exception, are reluctant to give away any information. Many organizations feel like they are showing their cards and leaving themselves vulnerable to being taken advantage of when they open up to prospective customers and teach them the industry secrets. Certainly, there is a fine line here. Some things should always be kept confidential, and I would recommend having a strong legal team close by when deciding what to reveal about your organization and the industry in general. That being said, I don’t think sharing is a bad thing. I think that the organization that is willing to take the risk of educating the public is going to not only improve the industry, but it is also going to set itself apart in a big way. Here’s why…

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First, educating the public can provide you with greater visibility. When I say “educating the public,” I’m talking about getting out there in front of people. You could teach a course at a local college, you could host a seminar at the community library, you could write a guest column in the town newspaper. As a leader in the mortgage industry, you have a perspective that many others would love to learn from. When you share your insight, you’re getting free press. You’re getting publicity from your willingness to share. Education is marketing.

Secondly, when you are willing to be as transparent as possible with the general public, you reduce the need for regulation. Now, it’s not going to happen overnight and one company’s transparency probably isn’t going to catch the attention of regulators. But if you, by taking action on public education, can inspire a movement among others in the industry, regulators are over time going to come to see the mortgage industry as less of a threat against consumer rights. We don’t like regulators telling us how to run our businesses–let’s try giving them a reason not to.

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Finally, willingness to share information and teach the public about the industry will create a more collaborative buying processes with your borrowers. People will increase their levels of trust in your organization, and the industry in general, when they perceive you as being open and honest with them. Distrustful people are harder to work with and easier to lose to competitors. Let’s give people a reason to trust us–let’s share our knowledge.

Education is a topic that is dear to my heart. I believe strongly in educating employees on how to grow in their knowledge and skills. I also believe in educating the public on the mortgage industry and its importance in the economy and society. We have a lot to teach. The public has a lot it would be willing to learn. Let’s start educating them. What are we waiting for?

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Industry Visionary Branches Out

Mortgage industry consulting veteran, David Lykken, announced he is embarking on a new entrepreneurial venture, Transformational Mortgage Solutions, set to launch September 1. Here’s the scoop:

Through Transformational Mortgage Solutions, Lykken assists clients with setting strategic direction, defining their purpose, and implementing operational plans tailor-made for their unique needs. The consulting venture works with all banks, credit unions, independent mortgage companies, and the service providers that support them. This includes firms in originations, operations, secondary marketing, mortgage loan servicing and mortgage technology. Lykken will serve as president and managing partner of the firm, and collaborate with other leaders in the industry who are committed to delivering transformational solutions to the mortgage industry.

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“I felt now was the perfect time to go back out on my own to accomplish my vision of transforming the industry, one person, one process, one company at a time,” stated Lykken. “The industry is fundamentally broken. I want to be a catalyst that transforms our industry into what it needs to become in order to provide a sustainable, safe and secure housing finance system that is good for both consumers and lenders.”

Lykken has more than 43 years of mortgage lending, real estate and financial experience. He has been actively consulting and coaching with business owners and executives for the past 15 years. Most recently, Lykken was a partner at Mortgage Banking Solutions, a management consulting firm and provider of advisory services.  He will continue to work with his former partners at Mortgage Banking Solutions in an affiliated business relationship.

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In addition to the consulting firm, the serial entrepreneur has been effecting change and sharing his vision for the last seven years as the host of a weekly, 60-minute podcast, “Lykken On Lending” (lykkenonlending.com). More recently, in 2013, he created Today’s Mortgage Minute (todaysmortgageminute.com), a consumer-facing one-minute video series that appears on more than 125 radio, television, and newspaper websites that is seen by approximately 16 million consumers each month. Lykken also continues to be a regular contributor on the FOX Business Network as well as a guest of other national radio and television programs.

“Right now there are so many reasons to be optimistic, but the industry needs to address core issues. That’s what I’m setting out to do. If there is another housing crisis, it is going to be very difficult for many companies to survive. I’m here to help them develop a plan to not only survive but to thrive in the new market ahead,” said Lykken.

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3 Ways To Deal With Real Change

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TME-DLykkenAs we continue our preparations for the new TRID rules, the issue of change management comes to mind. In recent years, change has become the norm for our industry. TRID is just the next regulatory hurdle in a series of never-ending transitions we have to make in our organizations. Change is something we’ll have to continue to deal with going into the future. If it isn’t regulatory, it will be technological or economic. Change, as they say, is the only constant.

So, the question isn’t how to prevent change–it’s going to happen whether we like it or not. As leaders in the mortgage industry, the question we must ask ourselves is, “How can we deal with change?” The inability to deal with change can quickly break an organization. If there’s one small transition that goes awry, the ripple effects can quickly lead to your downfall. On the other hand, properly adapting to change can give you a competitive advantage where others aren’t so nimble. Change management can mean the difference between failure and success. So, how do we deal with change? Here are three ways…

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The first and most powerful way to deal with change is to be prepared for it. Fortune favors the prepared. If you have plan for dealing with change as it occurs, it’s a lot less stressful and a lot more manageable. Being ready for change is partly about being vigilant–paying attention to what’s going on in the industry. The earlier you can catch wind of a change that is likely to occur, the sooner you can start making preparations for it. And, once you have a plan in place, the rest is just following through.

A strategy for dealing with change is to tackle it gradually. Instead of trying to force change in your organization abruptly and all at once, make small changes a little bit at a time. The answer to the question of how to eat an elephant? One bite at a time. If you can break the process of change down into small enough pieces, it doesn’t feel so much like change. Especially if you are trying to get your people to buy into the change, you’ve got to make it slow and give them time to digest it.

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One final strategy you might employee in dealing with change is delegation. Just like change is easier when it’s broken down into small pieces across time, it’s easier when it’s broken down into small pieces across people. Instead of forcing everyone to deal with all the pressure and responsibility of the change (or taking it all on yourself), spread the responsibility for the transition out across your team. Distributing the tasks for managing the change will also keep each department of your organization happier throughout the process, because no single person or department will feel like they’re doing everything themselves. You have an entire team–let each member play a role in getting through the change. If you can get everyone to pull together and pitch in, you’ll be pushing through before you know it.

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Three Ways To Deal With Change

As we continue our preparations for the new TRID rules, the issue of change management comes to mind. In recent years, change has become the norm for our industry. TRID is just the next regulatory hurdle in a series of never-ending transitions we have to make in our organizations. Change is something we’ll have to continue to deal with going into the future. If it isn’t regulatory, it will be technological or economic. Change, as they say, is the only constant.

So, the question isn’t how to prevent change–it’s going to happen whether we like it or not. As leaders in the mortgage industry, the question we must ask ourselves is, “How can we deal with change?” The inability to deal with change can quickly break an organization. If there’s one small transition that goes awry, the ripple effects can quickly lead to your downfall. On the other hand, properly adapting to change can give you a competitive advantage where others aren’t so nimble. Change management can mean the difference between failure and success. So, how do we deal with change? Here are three ways…

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The first and most powerful way to deal with change is to be prepared for it. Fortune favors the prepared. If you have plan for dealing with change as it occurs, it’s a lot less stressful and a lot more manageable. Being ready for change is partly about being vigilant–paying attention to what’s going on in the industry. The earlier you can catch wind of a change that is likely to occur, the sooner you can start making preparations for it. And, once you have a plan in place, the rest is just following through.

A strategy for dealing with change is to tackle it gradually. Instead of trying to force change in your organization abruptly and all at once, make small changes a little bit at a time. The answer to the question of how to eat an elephant? One bite at a time. If you can break the process of change down into small enough pieces, it doesn’t feel so much like change. Especially if you are trying to get your people to buy into the change, you’ve got to make it slow and give them time to digest it.

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One final strategy you might employee in dealing with change is delegation. Just like change is easier when it’s broken down into small pieces across time, it’s easier when it’s broken down into small pieces across people. Instead of forcing everyone to deal with all the pressure and responsibility of the change (or taking it all on yourself), spread the responsibility for the transition out across your team. Distributing the tasks for managing the change will also keep each department of your organization happier throughout the process, because no single person or department will feel like they’re doing everything themselves. You have an entire team–let each member play a role in getting through the change. If you can get everyone to pull together and pitch in, you’ll be pushing through before you know it.

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Three Reasons To Hire A Coach

I think those of us who aspire to be leaders in the mortgage industry sometimes get the wrong idea about leadership. Sometimes, we think that being a leader means being independent and not needing anyone’s help. As the leader, you are at the top–everyone is looking to you. Why would you need help if you are the one that everyone else is seeking help from?

Of course, this idea of leaders being lone wolves at the top of the mountain isn’t true in the least. Leaders are people and, just like everyone else, need a support system in order to be at their best. To some, the very idea of an executive hiring a business coach is absurd. Why would the coach need a coach? But even the best of leaders could use a coach to help them achieve their peak levels of success. Here are three reasons…

First is the insight that coaches can offer. No matter how much you as a leader know about your industry, your business, or the art of leadership, sometimes you are just too close. A coach is able to look at your situation objectively, and an outsider’s perspective can sometimes make all the difference. We sometimes miss opportunities to improve ourselves because we won’t let ourselves admit our deficiencies. A coach can see what we cannot and point out to us areas in which we could become better. The best leaders seek out coaches, because they want to be better–and they know that they can’t do it alone.

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A second reason to bring on a coach is the encouragement a coach can offer. If we aren’t careful, the pressures of leadership can break us. As the saying goes, “it’s lonely at the top.” Oftentimes, leaders get none of the credit and all of the blame. They are the scapegoats when things go wrong. If there’s an issue, fingers point automatically to the ones who are in charge. Being under such constant pressure and scrutiny can be quite disheartening. A coach, is light and fluffy as it my sound, can help leaders keep their spirits up. Even the strongest of us are not robots; we need encouragement and inspiration just like everyone else. A good coach can provide that for us.

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Finally, coaches offer accountability. They keep us on track when there is no one else to do it. While executives are responsible for everything that happens in the organization, they have no single person to answer to. The temptation, whether or not we would like to admit, can easily arise to cut corners or slack off. If the performance of one of our employees goes down, we notice immediately. If our performance goes down, the effect is a lot more gradual and it may take longer for people to pick up on it. A good coach can help us set objectives and monitor against meeting those objectives. The success of our organizations and our the entire industry hinges on whether or not we can proactively set the appropriate example. A coach can keep us aligned with our goals so that can continue to set that example and be the leaders we need to be.

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Three Reasons Why Focus Matters In Leadership

I frequently write and speak about the essential qualities leaders need to develop in themselves in order to succeed in work and in life. As a consultant and coach, I guide people in the mortgage industry on their personal characteristics as much as I do their business acumen in the industry. Before you become a better leader, you’ve got to become a better person. But, there is one skill I often emphasize that is absolutely vital for success both personally and professionally–and that is the ability to focus.

It has been said that success is 10% inspiration and 90% perspiration–that those who accomplish things are simply those who work hard. While I think that’s true, I think focus is the very foundation of hard work. Hard work is simply focus in motion. If you can’t maintain the discipline to concentrate on a problem and see it through to its solution, you will never get anything done. If, on the other hand, you can develop the ability to screen out distractions and home in on the task you are engaged in until it’s complete, you can accomplish wonders. Here are three reasons why focus matters in leadership.

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First, developing the ability to focus can make your more effective. It will help you get the right things done. As a leader in the industry, you are going to be inundated with all sorts of things that could monopolize your time. You are going to have people who want to meet with you, products and services you’ll need to consider using, industry news and information you will need to review, and business decisions you’ll need to think through. Maintaining a sense of focus will help you prioritize, do what matters most, delegate what you can, and disregard what isn’t important for accomplishing your goals. If you want to accomplish the things that matter most, you need to have the ability to focus on them.

Secondly, strengthening your sense of focus can make you more efficient. It will help you get things done right. When you are working on an issue, you will no doubt face countless interruptions. If you don’t have a strong sense of focus, you will let yourself get sidetracked and the issue will take much longer to resolve. If, however, you can focus on the task you are working on without letting interruptions distract you, you’ll be able to finish it in much less time. Moreover, you’ll probably do a much better job, because you will have been concentrating thoroughly on what you were doing. Focus helps you do your work better.

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Finally, maintaining an aura of focus can set the appropriate example for your team. The workplace can easily disintegrate into a flurry of water cooler conversations, with people simply checking their watches and waiting for five o’clock. Distraction is the enemy of productivity. If your people see that you are focusing on your work, they will be inspired to focus on theirs. As the leader, people will follow your example. What kind of example are you setting? Are you focusing on your work? The ability to focus can be a game changer, not just for you, but for everyone on your team–bringing success to your company and new life to the industry.

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Three Key Indicators That The Industry Is Recovering

As we head into the second quarter of 2015, we are distancing ourselves more and more from the recession. The recovery has been much slower than many of us had anticipated and most of us had hoped. Nevertheless, we are starting to see some improvement–or signs of improvement–in the mortgage industry. And I believe that we will continue to see more improvement throughout the remainder of the year and into next year.

So, on what information do I base my judgments? How can we tell if the industry is improving or if it remains stagnant? What statistics should we be monitoring to determine our progress? Here are three indicators to look out for to determine whether or not the mortgage industry is moving forward…

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First and most importantly, we need to pay attention to income levels. It isn’t just job creation that matters–it’s also what kind of jobs are being created. We need more work that can give people promising careers and prosperous livelihoods. More minimum wage jobs aren’t going to do a great deal for the mortgage industry. We need to see wages increase. We need people to have more legitimate spending power, more liquid assets, and more net worth. Admittedly, this has been a weak point in our economy. Wages seem stuck, and that may account for a large part of the sluggish recovery. But if we can turn that around, we’ll be well on our way to a prosperous industry once again.

A second, albeit a little more unconventional, sign that the industry is on its way to recovery is the number of “quits” occurring in the workforce. The Bureau of Labor Statistics puts out the JOLTS report, which measured job turnover across industries. This would be a good thing to pay attention to. Specifically, the “quits” number helps us understand how confident people are in their careers. The more people quit, the more confident we can assume they are finding another job. The more confident they are in their careers, the more likely they will be to start making bigger investments. Since 2010, the number of quits has been rising sharply. At the same time, the rate of terminations and layoffs has been declining. People are quitting more frequently than they’re being let go–that’s a sure sign of improvement.

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One final thing we’ll need to keep an eye out for is household formation. In the past several years, the rate of household formation has been down. Fewer households are forming, relative to the population growth. More people are living together. There are more multi-family units. Over the last year, we’ve started to see a slight increase. However, most of the new households are moving into renting. Our hope is that these new households will eventually, once the economy improves enough, move into the home ownership arena. The jury is still out as to whether or not this new generation is less interested in home ownership due to a change in culture or simply due to economic uncertainty. But, regardless, we’ll want to pay attention to how new households are taking shape as time goes on.

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Wishful Acting: Make Yourself A Better Leader

Positive thinking is perhaps the most overused idea in the leadership literature. Countless self-help books have been written about how positive thinking can become a self-fulfilling prophecy, leading you to accomplish what you believe you can accomplish. So, what about positive thinking? Is it truly a key ingredient for success, or is just a bunch of baloney? Here’s what I think…

Positive thinking, by itself, isn’t enough. You are deluding yourself if you thinking you can achieve something just by wishful thinking. Without hard work—a genuine effort in accomplishing your goals—all the positive thinking in the world isn’t going to do you any good. If you are hoping that, simply by viewing the world through rose-tinted glasses, it is magically going to change colors, you are sorely mistaken. Adopting that kind of perspective is a surefire way to become a leader no one wants to follow–a leader who is viewed as unrealistic, naive, and delusional. So, no, I don’t believe that positive thinking will lead you to success; it will only make you feel better about failure.

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So, if wishful thinking doesn’t work, what does? Wishful acting. It is not the power of positive thinking that makes a leader successful but, rather, the power of positive action. In other words, how does your perspective shape what you do? If you adopt a positive mindset about what will happen to you, it isn’t going to amount to much. However, if you adopt a positive mindset about what you are capable of doing, you can accomplish wonders.

Another way of saying this? Being optimistic will help you become a better leader to the extent that such a mindset strengthens the influence you believe you have on shaping course of your life. If you believe you have control over the direction your life is headed, you will act as if you have that control, and you will do things that improve your life. Therefore, your mindset will become a self-fulfilling prophecy—leading you to success because you believed you were capable of achieving it. So, it’s not because you believe that the stars will align for you that they actually do; it’s because you believe that you have influence over how the stars will move in the sky and, because of that believe, you actually put forth the effort that moves those stars into alignment.

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Now, think about this in the context of business. Our industry is one full of speculation about the future. How are interest rates going to move? What new regulations are likely to arise? What new technology is going to displace the current business practices? If you only think of these issues in terms of what is happening to you, merely hoping they will change in a direction that is preferable for you, isn’t going to accomplish anything. However, if you think instead about how you can respond to these issues in order to improve your organization, and you believe that you can improve your business with that response, the positive mindset you hold can buffer you against an uncertain future.

So, as you push on into 2015, don’t just think positive; live positive. Don’t just hope that things will get better; put forth the effort that makes them better. It isn’t wishful thinking that will lead you to success; it’s wishful acting.

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Pay, Perks, And Purpose: 3 Rules For Recruiting

Throughout the past several years, it appears that—in many industries—employers have had the upper hand. The recession led to many layoffs, reduced hours, and increased responsibilities. In terms of employment, it has been a buyer’s market—many people looking for work and few offering it. In such a market, employers have the option to choose from the pick of the litter and get the best talent without having to offer a great deal in return. But, as we all know, the pendulum will always swing back in the other direction.

As we come out of the recession and the economy begins to improve, talented workers are able to get back more of that bargaining power and choose employment that better suits them. In the mortgage industry, we need to do what we can to attract the most qualified candidates to our organizations. We’re only as good as the people on our teams. So, what are these emerging talented workers looking for in potential employers? I suggest that there are three areas in which we need to focus in order to get the best people to work for us.

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First and most obvious is pay. Compensation has to be reasonable or else you’ll attract only the desperate. The people who know they’re worth more will completely ignore you. It’s like looking for a car. You may settle for not getting the absolute best deal, but you aren’t even going to go see the car that is advertised at a highly inflated price. When job candidates are looking for work, they may settle for less than they want but—if it’s too much less—they aren’t even going to contact you. The advertised compensation has to be competitive—in a reasonable range of they could expect in the position. If you want good talent on your team, the bottom line is that you’ve got to pay for it.

Money isn’t everything though. Beyond pay, talented workers are also looking for perks. Those non-cash incentives can make all the difference in setting you apart from other employers who are competing for the talent. Some examples? Vacation time. Sick pay. Holidays. Gym memberships. Various discounts. Flexible schedules. Insurance. The list goes on and on. Salary is what hooks great talent, but these extras are what close the deal. Offering such perks will not only attract talent, but it will make them less likely to leave once they’re hired.

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Finally, after the basics are covered, people want to find purpose in their work. They want to believe in what they’re doing and find some higher meaning in it. How can you offer them this opportunity? Well, you can start by having a clear vision for your organization and its role in society and communicate that vision frequently to your team. But you can also host community events, create team-building activities, give your employees as much autonomy as possible, and encourage your employees to suggest ideas to improve the company. When your employees feel like they’re part of something special, they’ll never want to leave. Yes, you’ve got to pay them and the perks can go a long way. But, at the end of the day, people will only be loyal to you if you allow them to find meaning in their work.

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5 Questions To Ask During Every Interview

In recent weeks, I’ve been thinking a lot about recruiting. In addition to having recently discussed the topic on the radio show I host, I’ve also been reading about various educational initiatives to get new people interested in the mortgage industry. As more people from various backgrounds and with various skill sets consider entering the industry, we may have to approach interviewing potential candidates in new ways. Of course, there will be specific questions you’ll have to ask candidates about they role they are applying for, but are there more general questions you should as everyone?

Yes, I think there are. If you want to take advantage of this coming influx of talent into the industry, you’ve got to ask questions that force people to reveal their attitudes and intentions. That’s what the interview is for. It gives you a sense of the applicant that you can’t get from a test score. Here are some questions I think you may want to ask to everyone who wants a position in your company…

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What is your greatest strength and your greatest weakness? While this question may seem cliché, it’s important because it tells you not only how the applicants see themselves but also reveals the extent to which they’ve thought about their professional development. Don’t look for any particular answers. Almost anything can be both a strength and a weakness. What really matters is how the candidates answer the question. If they emphasis their continuous improvement of both their strengths and their weaknesses, you’re probably looking at a winner.

Why are you leaving your current employer? Or, why did you leave your previous employer? You want to make sure you aren’t the rebound company–that you’re not just a temporary stop because they couldn’t make it work with the last company. You also want to be made aware of any potential problems. On this one, you’ll want to listen to what isn’t being said.

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Why are you interested in working for this company? Here is where you give the candidates a chance to demonstrate the research, or lack thereof, that they’ve done on your organization. Look for answers pertaining to their desire to help an organization grow or opportunities for them to advance. But, whatever the answer, look for evidence that they are really invested in working for you and they aren’t simply applying because you’re hiring.

Where do you see yourself ten years from now? There are countless benefits to hiring employees for the long haul. You’ll save time and money on hiring and training. Also, employees’ skill sets and knowledge of the industry naturally develop as time goes by. The longer employees stay with you, the more productive and effective they will be in your company. Look for candidates who see themselves moving up or around in your company.

Of all the candidates applying for this position, why should we hire you? This is the candidate’s final pitch. It’s his opportunity to demonstrate that he is confident enough in his abilities to vouch for his own work. Obviously, a touch of humility is always nice. But, at the end of the day, if the candidate cannot sell himself over the rest, how can you be expected to buy? The best candidates should be able to answer this question without skipping a beat.

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