In my last article, I wrote about corporate transformation, a topic that strikes fear into the hearts of many C-suite executives (but shouldn’t).
Over my career, I have learned that transformation — despite all the baggage the word carries with it — is a key human element and comes down to effective change management. Leaders who understand this are constantly reinventing their organizations and leading their industries as a result.
All industries, mortgage included, should give serious thought to where transformation begins. The catalyst for transformation over the past five years or so has, by and large, been technology. While transformation can begin with technology, it’s often not the best starting point.
This rings true because every technology we use on a daily basis contains undiscovered features. Today’s mortgage software is complex. Evolving constantly, it is difficult for end-users to keep pace with the ‘new’ in any platform. According to a 2010 study by the Standish Group, 20 percent of software features are often used, while 50 percent of features are hardly ever or never used. The remaining 30 percent of features are used infrequently. For package applications, like Microsoft Office, Standish found that just five percent of features are used. While we tend to search first for new technology when seeking to solve a problem, it is actually the people and the processes that restrict forward momentum with existing technology (and the available features). The same thing will happen with new technology.
The better place to start a transformation effort, therefore, is with the people who will own, build and leverage the processes and the supporting technology. It is hard to define the requirements of new technology without doing the process homework first. And it’s impossible to know if technology can effectively manage processes without defining them first. Therefore, in well-managed companies, all change starts with people, and it begins long before any new technology is acquired. It can begin anywhere in the company – business, IT, operations, anywhere.
The Right Way to Drive Change
In most modern businesses, the IT department is often seen as leading transformation. While technology powers most processes in the modern enterprise, it’s often assumed that the fastest or easiest way to get a sizeable company to change course is to employ new technology, ultimately resulting in IT taking the wheel. This may work, but a better option for determining who should drive a change initiative can be decided by answering the question, “who is responsible for the business outcome or result?” Mortgage operators (Chief Lending Officers, Loan Officers, Underwriters, etc.) are responsible for mortgage results. Mortgage operators, therefore, should be driving mortgage change.
There are certainly times when a company’s technology specialists must lead change, but most of the time it starts elsewhere and long before a new technology is purchased. A good example is infrastructure. IT is generally responsible for making sure platforms are stable, secure and scalable. They are responsible for this 3-S outcome. They must, therefore, drive this sort of change.
There are many ways and multiple different methods by which transformation can come to an organization. We look for good ideas everywhere, both inside our company and out. We ask a lot of questions to determine how we want to work internally and what new automation we’ll need to bring our new ideas to the marketplace.
The Right Kind of Leader
When change starts with a new product or a new technology, we fall back on our operational leaders to guide the transformation. But often the improvements are made more significant by starting with people under the direction of leaders who can inspire, encourage, and motivate people.
After all, regardless of the change you want to see in your business, it will fall to your people to embrace it and create the change in your company. Transformation — just like innovation, change management and company growth — comes from people. If you want to see a difference in your firm’s future state, start with your people.