Great article from portfolio.com on bomb squads and crisis management.
http://www.portfolio.com/careers/features/2008/09/18/Bomb-Squad-Talks-Crisis-Management?TID=email/news/careers
I thought there were some good lessons in there for dealing with the rate of change in today's mortgage market.
Here are some thoughts as you prepare to reinvent you and your business in this time of historic changes.
Be ready for anything- establish 3 scenarios based on what you are seeing - worst case, baseline, best case. Will this prepare you for everything? No, but it in all likelihood a smattering of all three will happen and you will have thought through some of your actions in that case- giving you a better chance of survival.
Secure the perimeter and assess the situation- what is REALLY happening? This part is simple, but not easy. This will take intellectual honesty to examine what is happening and think through the impact on you and your business. You may lose a pillar of your business, your margins for a product line may be destroyed and never come back to the levels you expected. Deal with it and move on.
A second thought on this comes from an article I read once on Pete Carroll and USC recruiting. When he first got to USC he had a map of So Cal drew a red line around it and told his staff that USC must dominate the local recruiting landscape. The lesson here - find the area you can dominate. Pick one thing and dominate that, being scattered in this environment can likely lead to the demise of your company - cash flow is drying up and margins are shrinking.
Learning from your mistakes- 286 companies on the implode-o-meter.
I've worked at #6 and #238 on the list. There's a pattern that happens when companies die in this environment- are you learning about the key variables that affected your demise? Are you acting on that wisdom when you see it again?
Document what went wrong, understand the key drivers behind it and develop two ideas that you could implement next time if you saw the same pattern. Will the pattern always repeat itself in the exact same way? Probably not. Will you better prepared for the subtle changes in the pattern if you have at least two ideas developed and ready to go? Yes and that's two ideas more than your competition.
Remember- the ability to quickly adapt and change is a competitive advantage that can help you and your company evolve to the next level of survival and success.
Wednesday, September 24, 2008
Tuesday, September 16, 2008
Historic Events = Historic Opportunity
I'm sure you've read the news on Merrill, Lehman and AIG.
How is it going to shake out? No one knows.
How is it going to look in three years? No one knows.
Where's the opportunity? All over the place.
The events that have transpired over the past few days are creating the most unique opportunity in history for financial service companies to reinvent themselves.
What and how will they reinvent? Here's what I see.
Content creation and distribution -needs to be relevant to my situation and get out to my sphere of influence as quickly as possible.
Infrastructure- technological, lending, underwriting, process, lead generation, lead nurturing
Lower volumes are pressuring business models to change now.
Great article on financial services companies and marketing.
http://seekingalpha.com/article/95567-how-good-are-online-financial-services-at-marketing
Where do companies start? Depends on where they want to be.
But at the foundation, it all starts with trust.
How trusted are you? No Really?
How is it going to shake out? No one knows.
How is it going to look in three years? No one knows.
Where's the opportunity? All over the place.
The events that have transpired over the past few days are creating the most unique opportunity in history for financial service companies to reinvent themselves.
What and how will they reinvent? Here's what I see.
Content creation and distribution -needs to be relevant to my situation and get out to my sphere of influence as quickly as possible.
Infrastructure- technological, lending, underwriting, process, lead generation, lead nurturing
Lower volumes are pressuring business models to change now.
Great article on financial services companies and marketing.
http://seekingalpha.com/article/95567-how-good-are-online-financial-services-at-marketing
Where do companies start? Depends on where they want to be.
But at the foundation, it all starts with trust.
How trusted are you? No Really?
Friday, September 12, 2008
Reinvention of YOU
What exactly is reinvention?
Let's check the definition.
What about the history of the word invent?
Looking at the two you can see that we are to find, discover and devise, but how?
There's an answer in the definition - to revive or bring back.
How do you reinvent yourself in this mortgage market?
5 tips for reinvention: (None of which cost you money)
1) Go back to your roots - what did you love when you first entered the work world as a child?
It is technology, being involved, drawing, sports - what is it?
2) Get rid of your baggage - The market will never be like it once was - accept it, get over it and work to rebuild anew with something bigger. By definition and word hsitory an economy is nomadic - constantly shifting and never staying the same. What may have been your greatest strength may now be your greatest weakness.
3) Become interested, not interesting - ask your friends how things work in their industries, ask your kids how things work at school - by asking new questions we can see new paths - but you must humble yourself to ask those questions first.
4) Evolutionary speed counts - in the game of business - if you can change, reinvent or adapt faster to new circumstances- you have the best oppotunity to win - bottom line. Make your decision to adapt faster than others.
5) Borrow life examples from others- Britney Spears, Madonna, A-Rod these are a few people who have mastered reinvention. How did they do it? How did Britney go from trainwreck to cohosting the VMA's?
Reinvention has a common DNA thread- find what works for you.
Let's check the definition.
What about the history of the word invent?
Looking at the two you can see that we are to find, discover and devise, but how?
There's an answer in the definition - to revive or bring back.
How do you reinvent yourself in this mortgage market?
5 tips for reinvention: (None of which cost you money)
1) Go back to your roots - what did you love when you first entered the work world as a child?
It is technology, being involved, drawing, sports - what is it?
2) Get rid of your baggage - The market will never be like it once was - accept it, get over it and work to rebuild anew with something bigger. By definition and word hsitory an economy is nomadic - constantly shifting and never staying the same. What may have been your greatest strength may now be your greatest weakness.
3) Become interested, not interesting - ask your friends how things work in their industries, ask your kids how things work at school - by asking new questions we can see new paths - but you must humble yourself to ask those questions first.
4) Evolutionary speed counts - in the game of business - if you can change, reinvent or adapt faster to new circumstances- you have the best oppotunity to win - bottom line. Make your decision to adapt faster than others.
5) Borrow life examples from others- Britney Spears, Madonna, A-Rod these are a few people who have mastered reinvention. How did they do it? How did Britney go from trainwreck to cohosting the VMA's?
Reinvention has a common DNA thread- find what works for you.
Wednesday, September 10, 2008
Tripod of Trouble
I just came from a great California Association of Mortgage Brokers (CAMB) breakfast meeting, where the speaker was - Robert Manning, Ph.D.. Dr Manning spoke on serveral fronts including the changing American attitude toward debt, but of his comments really hit home.
Let's call it the tripod of trouble.
You have government laws and regulations that need to be fixed in order to help fix the mess we're in.
You have corporations sitting on a ton of bad loans underwritten with bad standards as well credit cards that were being marketed on the assumption of rising home values and free flowing credit.
You have consumers who are overextended and using credit cards to help manage living expenses, stagnant or dropping income levels, and individual debt levels at historic levels.
What does this spell? Trouble!
Now is the time to reinvent or die.
How to reinvent is the question that keeps coming up.
Here's a couple of thoughts-
Housing debt is typically the biggest asset/liability on a individual balance sheet. It typically is the biggest monthly payment.
When does fiduciary duty as a loan originator begin? Pre application, at application?
My perpsective - in the new market (After Freddie and Fannie) fidicuiary duty will take an more holistic overview - can this person REALLY repay the loan?
Is this person's net worth truly enhanced as a result of this decision?
What is the plan that you shared with this client?
How will you monitor this plan?
One way to answer-
GreenSherpa
Another way to answer-
Rudder
Reinvent or Die - now is the time
Let's call it the tripod of trouble.
You have government laws and regulations that need to be fixed in order to help fix the mess we're in.
You have corporations sitting on a ton of bad loans underwritten with bad standards as well credit cards that were being marketed on the assumption of rising home values and free flowing credit.
You have consumers who are overextended and using credit cards to help manage living expenses, stagnant or dropping income levels, and individual debt levels at historic levels.
What does this spell? Trouble!
Now is the time to reinvent or die.
How to reinvent is the question that keeps coming up.
Here's a couple of thoughts-
Housing debt is typically the biggest asset/liability on a individual balance sheet. It typically is the biggest monthly payment.
When does fiduciary duty as a loan originator begin? Pre application, at application?
My perpsective - in the new market (After Freddie and Fannie) fidicuiary duty will take an more holistic overview - can this person REALLY repay the loan?
Is this person's net worth truly enhanced as a result of this decision?
What is the plan that you shared with this client?
How will you monitor this plan?
One way to answer-
GreenSherpa
Another way to answer-
Rudder
Reinvent or Die - now is the time
Monday, September 8, 2008
Let The Rebuilding Begin
The Big News Of The Day
http://www.cnbc.com/id/26590793/site/14081545/
Fannie and Freddie - no more
This action by the federal government provides an opportunity to begin rebuilding the systemic issues within the lending industry that need to be addressed so we can evolve our business to deal with the new martket environment.
While confusion reigns about what will ulitmately happen as a result of this- here's my thought- this means less business across the board. The easy money days are gone and the industry infrastructure that is currently built around the lending community needs to shrink. Simply put - there is not and will not be enough business to go around for the vendors in the marketplace right now.
On the flip side of that destruction is the growth opportunity that will follow as a result of market changes.
Technology infrastructure, lower cost content and delivery channels, new content creation built around the new financial realities of consumers and loan originators are a few of the areas that based on what I'm seeing should have great growth opportunities in the near and long term.
Where's your business model pointing you?
http://www.cnbc.com/id/26590793/site/14081545/
Fannie and Freddie - no more
This action by the federal government provides an opportunity to begin rebuilding the systemic issues within the lending industry that need to be addressed so we can evolve our business to deal with the new martket environment.
While confusion reigns about what will ulitmately happen as a result of this- here's my thought- this means less business across the board. The easy money days are gone and the industry infrastructure that is currently built around the lending community needs to shrink. Simply put - there is not and will not be enough business to go around for the vendors in the marketplace right now.
On the flip side of that destruction is the growth opportunity that will follow as a result of market changes.
Technology infrastructure, lower cost content and delivery channels, new content creation built around the new financial realities of consumers and loan originators are a few of the areas that based on what I'm seeing should have great growth opportunities in the near and long term.
Where's your business model pointing you?
Thursday, September 4, 2008
Pessimism or Realism
I had a couple of interesting conversations this morning about recent event in the mortgage industry.
Two big items - Homecomings and Thornburg mortgage are done.
A large mortgage broker shop will be closing down in So Cal.
As I shared this news with a co worker we discussed all the challenges in the marketplace. He asked if I was focusing too much on the negative and not on the positive - here's a thought.
Focusing on the negative aspects of a market doesn't mean or preclude you from seeing the opportunity being created.
Looking at bad news and being realistic about it (the negative and the opportunity that is being created) seems a more profitable way to deal with it than the either/or model.
The mortgage industry will find a way to rebuild, reinvent and reimagine a better way to do things. How?
The Mortgage Industry 2011 conference is an attempt to find the answer.
Are you interested in building the future?
Two big items - Homecomings and Thornburg mortgage are done.
A large mortgage broker shop will be closing down in So Cal.
As I shared this news with a co worker we discussed all the challenges in the marketplace. He asked if I was focusing too much on the negative and not on the positive - here's a thought.
Focusing on the negative aspects of a market doesn't mean or preclude you from seeing the opportunity being created.
Looking at bad news and being realistic about it (the negative and the opportunity that is being created) seems a more profitable way to deal with it than the either/or model.
The mortgage industry will find a way to rebuild, reinvent and reimagine a better way to do things. How?
The Mortgage Industry 2011 conference is an attempt to find the answer.
Are you interested in building the future?
Wednesday, September 3, 2008
New Times, New Business Models
Three news items caught my attention this morning:
The launch of a new service: http://www.tbwsratealert.com/
The release of a new survey: http://www.mortgagenewsdaily.com/922008_Housing_Recovery_Survey.asp
New Option ARM data:
http://globaleconomicanalysis.blogspot.com/2008/09/option-arm-time-bomb-about-to-explode.html
What does all this mean? I'm not sure but I heard it put best the other day - If you're not confused, you're not paying attention.
What are some possible implications of today's data pieces?
With reduced volume and increased trouble ahead, companies and the products and services they sell - must clarify their business and leadership model- Are they product leaders (Apple), customer intimate (Amazon) or operationally excellent (Wal Mart)?
With reduced volume and severe margin compression, the mortgage industry is leaving behind it's bundling of services business model (Made famous by Sandy Weill at Citigroup) and needs to reinvent itself for an individual user of services business model.
Can you deliver your product profitably if you had only one user? Start up costs, product development costs, overhead, etc.
If not, how are you integrating new web services and infrastructure technologies into that process?
The launch of a new service: http://www.tbwsratealert.com/
The release of a new survey: http://www.mortgagenewsdaily.com/922008_Housing_Recovery_Survey.asp
New Option ARM data:
http://globaleconomicanalysis.blogspot.com/2008/09/option-arm-time-bomb-about-to-explode.html
What does all this mean? I'm not sure but I heard it put best the other day - If you're not confused, you're not paying attention.
What are some possible implications of today's data pieces?
With reduced volume and increased trouble ahead, companies and the products and services they sell - must clarify their business and leadership model- Are they product leaders (Apple), customer intimate (Amazon) or operationally excellent (Wal Mart)?
With reduced volume and severe margin compression, the mortgage industry is leaving behind it's bundling of services business model (Made famous by Sandy Weill at Citigroup) and needs to reinvent itself for an individual user of services business model.
Can you deliver your product profitably if you had only one user? Start up costs, product development costs, overhead, etc.
If not, how are you integrating new web services and infrastructure technologies into that process?
Tuesday, September 2, 2008
In Times of Change
Learners Shall Inherit the Earth
'In times of change, learners inherits the earth, while the learned find themselves beautifully equipped to deal with a world that no longer exists.'
--the late writer Eric Hoffer
As we begin to prepare for the Mortgage Industry 2011 conference/brainstorming we must deal with the reality that the mortgage world that we knew no longer exists in reality. There are technological, financial, demographic and business trends that are affecting the way we do business and that will irrevocably change the way our business models operate.
As we move forward in this environment, I thought you'd find the blog below helpful in finding ways to deal with the pace of change.
http://www.technologyreview.com/blog/boyden/21925/
What do you see from your perspective and how do you see that changing the way you do business?
How has Amazon changed your clients perspective of the shopping process?
How has Google changed the way your clients expect information to be presented?
Share your thoughts as we paint a vision of understanding for 2011.
'In times of change, learners inherits the earth, while the learned find themselves beautifully equipped to deal with a world that no longer exists.'
--the late writer Eric Hoffer
As we begin to prepare for the Mortgage Industry 2011 conference/brainstorming we must deal with the reality that the mortgage world that we knew no longer exists in reality. There are technological, financial, demographic and business trends that are affecting the way we do business and that will irrevocably change the way our business models operate.
As we move forward in this environment, I thought you'd find the blog below helpful in finding ways to deal with the pace of change.
http://www.technologyreview.com/blog/boyden/21925/
What do you see from your perspective and how do you see that changing the way you do business?
How has Amazon changed your clients perspective of the shopping process?
How has Google changed the way your clients expect information to be presented?
Share your thoughts as we paint a vision of understanding for 2011.
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