Lykken on Leadership: Innovation Throughout the Organization ... Five Key Areas for Leaders to Focus on Improving – NMP Skip to main content

Lykken on Leadership: Innovation Throughout the Organization ... Five Key Areas for Leaders to Focus on Improving

David Lykken
Nov 04, 2015

In the mortgage industry, as in many others, one of most talked about concepts is that of innovation. As many readers may know, I host a weekly Internet radio show called Lykken on Lending in which my colleagues and I discuss various topics related to the mortgage industry. Over the last four to six weeks on the program, we have talked exclusively about the subject of innovation—interviewing leaders from various aspects of the industry on how innovation plays a role in their areas of expertise. What I find so astonishing is the breadth of areas to which innovation is applicable. Innovation isn't just about software or technology, it is, or at least it should be, a vital aspect every part of the mortgage industry

So, what exactly is innovation? As I mentioned, most of us think of innovation within the context of computer technology. Apple, of course, is the company that always readily comes to mind. In the mortgage industry, we'll often think of cutting software vendors and mortgage companies who use them as being particularly innovative. But, at its base, innovation is more than simply its application. The root word of innovation is "new," and it was originally used to mean restoration or renewal. In short, what innovation really means is change something for the better—to improve it. And, as we all know, there are many aspects of our organizations in the mortgage industry that could use improvement. As leaders in our space, we've got to rise to the challenge of addressing all of them.

First, let's address the technological aspect of innovation. While I don't think that technology is the only area in which innovation to matter to us, I would agree that it is extremely important. I am continually amazed by the forward-thinking development of vendors in our industry to make the mortgage business more efficient. There are some innovative software and information system technologies that are really bringing the industry into the 21st century. Those who refuse to adopt these technologies are being left in the dust, while the leaders who are willing to take the risk of bringing these innovations into their organizations are thriving. Change is difficult and risky and, with that change being technological in nature, it can also be costly. There is such a thing as too risky—some are chasing after the next thing without any clue as to whether or not it will work. But, as a whole, I think our industry suffers more from the problem of adopting new technologies too slowly. Great leaders will know the right time to make the change but, as a rule, the time is typically sooner rather than later.

If there's one subject in recent years that has gotten more mentions than innovation in the mortgage industry grapevine, it's compliance. While the chatter surrounding TRID has begun to die down, its presence is still felt and organizations are still adapting to its demands. The CFPB is alive and well. As we head into the next presidential election, the issue of economic hardship is bound to have some effect on regulation—in one direction or the other. Like or not, ever-changing regulation is likely going to be simply part of the business going forward. But, even within the context of regulation and compliance, there are ways to be innovative. The best organizations have begun building their legal and compliance team—whether they be in the form of staff or partners—to find ways to work successfully within the system. Innovation can work in the legal department in two ways: Members of your legal team can find unique ways to adapt to new legislation when it occurs, and members of your legal team can assist in lobbying for legislation reform that makes the industry work more effectively. In either case, if you aren't forward-thinking with your legal team, you'll be left behind by those who are.

Aside from technology (and maybe even in conjunction with technology), one of the most obvious areas of innovation occurs in operations. Oftentimes, the organization can be improved substantially just by reinventing the process through which the work is done. Organizations stand or fall based on the robustness of their systems. The way in which a mortgage flows through your business can be done sloppily—or it can be done with remarkable efficiency. Great leaders explore ways that can simplify the communications and the hand-offs between vendors, employees, and customers. Sometimes, all it really takes is clarity. People handling each component of the business need to know what they're supposed to, why they're supposed to do it, and how it's related to the what everyone else is doing. Getting everyone on the same page may sound simple, but it sure isn't easy. Great leaders look for innovative solutions to introduce clarity and cohesion into operations to make the process of handling mortgage more efficient.

Another area in which innovation is vitally important is in your human resources department. No matter what systems you have in place or the technology you have to implement it, nothing will get done without having solid people in place to see it through. A good coach focuses on developing the playbook, but a great coach focuses on developing the team. If you can build a solid team, you can trust them to carry out the work that leads to success. And building a solid team takes an innovative approach. Have you thought about introducing innovation into your hiring process? Do you hire people the same way you've always done or the same way that others in the industry do? Maybe you should try something new. What about your training and development? Do you stick to industry or company norms, or do you have feelers out there for programs that may take a more effective approach? I believe that people want to do their jobs better—they just need help. Great leaders look for innovative ways to develop their team.

One final area I would like to discuss in terms of innovation is marketing. With the advent of the Internet and social media, there has been much written on taking innovative approaches to marketing; however, most of it has been outside of the mortgage industry. In our industry, we seem to be uncomfortable with some of the new approaches to reaching prospects that are gladly being taken up by other businesses. Especially as Millennials grow about become the new generation of home buyers, we've got to be open to new methods of communication. Here's a key principle to remember in order to be innovative in your marketing: Stop trying to reach people the way you like to reach them, and start trying to reach them the way they want to be reached. In marketing, innovation starts with listening. What are the people you are paying attention to? Go where the customer is, and he might just follow you back to where you are.

Innovation isn't a department—it's a philosophy that gets infused into all departments. If you want to be a great leader in preserve your organization through times of adversity, you've got to start seeing innovation in a broader context. From time to time, every aspect of the organization could use reinvention—not just the IT department. Great leaders are always looking for ways to improve—and that's precisely what makes them great.



 

David Lykken, a 43-year veteran of the mortgage industry, is president of Transformational Mortgage Solutions (TMS), a management consulting firm that provides transformative business strategies to owners and “C-Level” executives via consulting, executive coaching and various communications strategies. He is a frequent guest on FOX Business News and hosts his own weekly podcast called “Lykken On Lending” heard Monday’s at 1:00 p.m. ET at LykkenOnLending.com. David’s phone number is (512) 759-0999 and his e-mail is [email protected].



This article originally appeared in the September 2015 print edition of National Mortgage Professional Magazine. 

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