In James Cameron’s epic movie Titantic, the role of 101-year-old Rose Calvert was played by Gloria Stuart, a well-known Hollywood actress of the 1930s and 40s. She was 86 at the time when she played the part and received an Academy Award nomination for best supporting actress for her work. What was noteworthy about Stuart’s career was when the actress roles dried up for her, she turned her talents to painting and other artistic endeavors and became acclaimed in this field. I mention Stuart because of her ability to reinvent herself. From Ronald Reagan to Madonna, many other famous personalities have been masters at reinventing their careers. The point is everybody has the ability to do it, but most don’t. Changing things up is much easier when career options have narrowed but it takes a higher level of courage to reinvent when things are going well.
When the current business environment is positive, revenues are up and market share is increasing, it is extremely difficult for companies to justify reinventing their business model. While mortgage banking has had a terrific year, the good times can’t last forever and significant challenges are on the horizon.
Industry after industry is marked by once-dominant players who crashed and burned because they couldn’t adjust to changing marketplace conditions. Some say that mortgage banking will be the next industry to undergo dramatic changes in the coming years. Many believe that mortgage banking is the last mom-and-pop business in financial services. Whether this is true or not, one thing we know for sure is that a customer’s buying journey is completely different than in the past.
Certainly, any successful company can have a short shelf life and be turned upside down quickly. The consequence for any company that fails to reinvent itself can be catastrophic. As Derek van Bever and Matthew S. Olson illustrate in their book Stall Points, once a company runs up against a major stall in its growth, it has less than a 10% chance of ever fully recovering.
Reinvention is hard because change is difficult. It means making decisions that may be unpopular and unsettling to some and there can be resistance by naysayers. In every company, there are always those who think that doing something different is a personal affront. These people can draw a line in the sand that can’t be crossed and some leaders oblige by not challenging them. Unfortunately, the vocal naysayers win out at the expense of a better long- term future for the company.
In a great Harvard Business Review article, Reinvent Your Business Before it’s Too Late, by Paul Nunes and Tim Breene, the authors discuss how high-performing companies operate in today’s business world. Nunes and Breene point to the top performer’s recognition of hidden competition (the next big thing) and capability in their businesses (how they satisfy the new needs of their customers), but their comments on talent and leadership are especially important for all mortgage executives.<br><br>
Nunes and Breene observe that “companies often lose focus on developing and retaining enough of what we call serious talent—people with both the capabilities and the will to drive new business growth. Companies instead feel that operations can be leaner and meaner, because they’re under pressure to boost margins. They reduce both head count and investments in talent, which has the perverse effect of driving away the very people they could rely on to help them reinvent the business. The high performers in our study maintain a steady commitment to talent creation.<br><br>
“High-performance companies aggressively search out the right type of candidate and then take action to strengthen individuals for the challenges ahead. High performance companies begin with the expectation that they are hiring people for the long-term—a perspective that fundamentally alters the nature of their hiring and development practices. They don’t just look for the best people for the current openings; they recognize that cultural fit is what helps ensure that someone will perform exceptionally well over time. After choosing and testing the right employees, companies must give them a chance to develop. And high-performance businesses aren’t afraid to leapfrog talented employees over those with longer tenure.”
As we get closer to 2017, are you ready for the next big thing and what customers want today? Do you have the right sales and managing talent to make the next big thing happen?