In mortgage banking, some firms are on the verge of separating from the competition and there will be a new group of top 15 companies. How do I know? In speaking to countless executives, it is clear that some are preparing for it and others are stuck hoping that Harp 2.0 continues forever.
One indicator of “stuck” executives is the topics they talk about: Government regulations, the Dodd-Frank Act, and how to get more production from low performers (They are poor producers for a reason which executives seem to forget).
When you look at other industries that experienced difficult times, certain companies have always been able to reinvent themselves and rise above the rest. One great example is IBM.
Originally, IBM started out making clocks, scales, cheese slicers and similar products. In the 1960’s the company moved into mainframe computers and eventually dominated that business. Then 20 years later, they invented the personal computer. Unfortunately, management was tied to the mainframe and could not see what the world was becoming. It stuck to a business model that was based on things remaining the same.
The current IBM CEO discussed the issue in Tom Friedman’s book, “That Used to Be Us”: “Management spent more time arguing amongst themselves over a shrinking pie than looking to the future and as result, you miss the big turn. When you start thinking of your own colleagues as the opposition, you end up losing touch with the world in which you are living.”
How did IBM come out of its downturn and get back on track? The answer: Relentless scrutiny of itself and the world in which it was operating. Taking a hard look at your operation starts with an objective analysis of real numbers. (When was the last time that your company benchmarked its performance against your peers? This is a must if you want to improve — benchmarking requires outside expertise.) By doing so, IBM mastered the next big turn in technology which was computer networking.
Mortgage banking is moving into its next big turn. The problem is that too many management teams are still trying to get through the day and not looking to the future and where the customer is moving to.
In my view, the customer has changed dramatically — prospects select who they want to do business with and not the other way around. In the old days, it was all about push marketing. Advertise and the customer will come. Today, it is about pull marketing where the customer chooses which companies they will deal with and when. To succeed in a pull marketing environment, companies must meet customer demand for more professional sales people — individuals who are committed to continually improving their sales knowledge.
So the key question to ask is, “What percent of your sales force can meet the demands of the new customer?”