Failure to Change is Fatal


For any business, failure to change and adapt to new marketplace conditions can be fatal. One recent example of this was Nokia’s acquisition by Microsoft. A LinkedIn article referenced Nokia’s CEO lamenting that “they did nothing wrong, but somehow lost the battle” when announcing that their company had been acquired.

While Nokia had been a world leader in its field, the company was surpassed by the competition due to its failure to change with the times. In the announcement, one software engineer recalls advising Nokia years ago to integrate its products with other platforms but management refused to consider it. Nokia’s management claimed that they were happy with their present products and did not want to make any changes. Obviously, over time, consumers felt differently and voted with their pocketbooks by purchasing from Nokia’s competitors. At some point, this caused them to sell their company.

Similar challenges are occurring in mortgage banking regarding technological improvements. For example, one technology vendor I spoke with has a terrific new product that provides consumers with a web-based questionnaire and a checklist of items that need to be addressed before completing their application with a loan officer. When the vendor shows the product to originators and their managers, they are excited about it, but don’t want to change their current sales process. In other words, they would rather have a consumer leave a voice mail and get back to them vs. sending a link to quickly engage the consumer in the application process.

In any industry, the problem with maintaining the status quo is that it’s based on the false assumption that the market is fixed and will always operate as it has in the past. This fatal flaw doesn’t acknowledge that consumers now have 24/7 access to endless amounts of information, forever changing the dynamics of selling. The simple reality is that customers value speed more than ever and will move to another vendor or salesperson in an instant to get their questions answered. Speed is the name of the game for every company regardless of industry.

All businesses are challenged to make changes and invest in their future success or risk becoming extinct. Further, the best time to implement change is when a company or salesperson is successful as opposed to when the bottom is falling out.

The problem is that when one is successful, the status quo can become ingrained and an organization or originator becomes inflexible. This is when leadership needs to step in and guide the company based on a future vision that others cannot see. In mortgage banking, one case in point is the issue of rookie programs. Companies know they need to attract and train rookies but getting corporate managers to fund a program is difficult when it is easier to pirate an experienced originator away from a competitor.

Similarly, originators who don’t adapt to the new world of origination are destined to fail. No lender’s marketing material or CRM system will make an originator a winner if he or she doesn’t deliver an extraordinary customer experience. Average performance isn’t enough to nail customer satisfaction and generate referral business.

The big question of course is why won’t lenders and originators change when they can see the writing on the wall? This is a complex question that is rooted in old habits that need to be reversed before it is too late. It is one thing to be aware of a situation and quite another to put in place the activities to change the process. In a great book by Charles Duhigg, “The Power of Habit: Why We Do What We Do in Life and Business” the author provides the blueprint on how to do it. Duhigg makes the point that the choices that we make every day are not actually choices but habits. Once we identify our habits, we have the power to change them.

Are you and your originators ready to make the changes needed to succeed in 2017?