Expert Says Innovation is Key To Dealing With A Changing Marketplace
Surviving during this crisis may be the primary concern for many mortgage servicers. But as in the old saying: good is the enemy of great, aiming to innovate and move ahead of the crowd is better than just aiming to survive.
Robert Brands, a veteran corporate executive turned international business consultant, says it is easy to lose focus in times when six out of 10 new businesses fail, unemployment remains high, the housing market may go through a double-dip in the next quarter, and the FDIC is reporting that about half of America’s banks—including the four largest—are on the bubble and may fail by the end of the year.
And innovation is the one principle often overlooked in hard times that can actually help.
According to Brands the issue is simple: innovate or perish. “At every major crossroads in the history of American business, innovation has been the driving force behind the companies that made it through the bad times. After all, as we all look for the hot new product or the ‘killer app’ in our respective industries and professions, we tend to overlook the fact that someone has to create or invent it first.”
In the mortgage industry it stands true especially as mortgage processing technology efforts are bringing about automated tools that facilitate anything from ensuring borrower information is accurate, to comparative property valuations, regulatory compliance and loan origination as well as liquidation transparency.
In his book "Robert’s Rules of Innovation," Brands argues that innovation is the governing philosophy behind companies that succeed.
“Whether it is a multinational corporation or an entrepreneurial startup, innovation can help a business launch, recover or overcome even the greatest of competitive pressures,” he says.
It stands true for all businesses in all markets and more so now than ever in the recent past since “pressures of the new economy are worse than anything the business world has seen for decades.”
How do you get through it? He argues that “the companies that are prospering, despite the economy,” such as Apple, Ford, Microsoft and others “didn’t stand pat as the economy crashed,” instead they reinvented themselves and their product and service lines.
One such example is Ford, which after falling behind to Japanese competition amid the GM bailouts, reinvented their line of cars and emerged stronger than before. “It wasn’t layoffs or the mitigation of risk that accomplished that. It was innovation, creating something new to satisfy its customer base.”
What needs to change is the mentality surrounding the notion of innovation.
Brands sees room for expansion in the way people think of innovation, which is not “simple brainstorming for ideas,” which is just one small element of a much larger process.
“Innovation is not a tactic. It is a process, and if businesspeople follow the right steps, they can achieve innovation regularly—not just when someone slips on the soap in the shower and the next killer app just comes to them as they put ice on the bruise on their head.”
Brands, who is the president and founder of InnovationCoach.com, suggests certain guidelines and rules that govern the business innovation process.
It all starts with focusing on recognizing a need in the market place, and then combining available resources within your company to see if you have the ability to leverage existing research, development, contacts and distribution to fill that need, he says.
For instance, the iPod came about because Apple recognized consumers’ desire to buy single songs instead of whole CDs and the record industry’s inability to leverage the Internet as a viable delivery medium. "In reality, the process was far more complex than that simple sentence,” he admits,” but the essence of the process is there.
The key to turning innovative ideas into profit generators is to be able to sustain it through the entire life cycle of a business, he adds. “Innovation should not be a one-shot deal,” but rather, an ongoing, sustainable route that is part of being in business.