Lend Long and Prosper

By: Marc White for Today's Lending Insight

Technology is changing faster than ever before. While it took 38 years for radio technology to reach nationwide adoption, it took Facebook just a year and half. Change is difficult, and this ever-increasing acceleration can be challenging to navigate.

This is certainly true for mortgage lenders. Most lenders’ loan origination systems looked very different five years ago than they do today. With so much at stake involved in lending in a compliant manner while providing a superior borrower experience, adaptability is essential. How can lenders successfully lead teams who require consistency through inevitable process and technology changes? There are two answers – one obvious, the other not so obvious.

The obvious answer is leadership. While my background is in the study of human behavior, I now spend each day helping lenders plot major changes in their organization. My curiosity about people has led me to note a few consistent themes as lenders look to revamp their processes and change their loan origination technology providers. People can be naturally resistant to change, often preferring consistency, so how do we stay standing on the ship as technology shifts? There is a lot of great literature out there on the process of change management. The obvious and accepted part of the answer is that having a leader for your organization who can lay out a logical, straightforward plan (think Spock from Star Trek) for change is the starting point.

But people are, of course, emotional as well as logical beings, and emotion often gets left out of the plan for technology change.

That’s the second step in navigating change: Helping people deal with their emotions. While having a clear picture of the end goal is key, teams need to know why and how to get there, too. Captain Kirk said it best: “…the greatest danger facing us is ourselves, an irrational fear of the unknown. But there’s no such thing as the unknown — only things temporarily hidden, temporarily not understood.”

Change, by definition, is a move away from the known into unknown. Our irrational fear translates into a fear of loss. It could be a loss of responsibilities (technology replacing manual processes or entire jobs) or a loss of comfort (sameness keeps anxiety and fear away). Teams must feel they understand the plan. They are the foundation through which our processes and technology can succeed, so leaders need to help them through their sometimes rational, sometimes irrational fears and emotions about technological change.

Helping people through change is actually quite similar to helping people through loss or grief. In fact, you may have seen all five stages in the Kubler-Ross model on loss: denial, anger, bargaining, depression, and acceptance. As a leader, how effectively you help your staff navigate through — or around — the first four could be the difference between excitement for the future and poison in the well.

In dealing with change, you can either lead from the front or from the back. Only the former will help you effectively navigate your staff through change. You’re removing that fear because the team sees you’ve already outlined the destination, and you’ve shown them the path to get there. No more pushing your staff into the stressful, scary unknown. You’re bringing them into something new, something greater. Change is a constant in business. It’s always going to be hard, but when it’s done right it can lead to gains, not losses.