Innovation and orchestration are two divergent words that at first glance should not be used together. The fact-of-the-matter is that the mental images of “orchestration” appear out-of-place when discussing mortgage technologies, processes, and innovations. Why discuss music at a time when the industry is melting away? I too remember the stories about Nero and his ambivalent concern for his kingdom.
In times of pervasive and lasting crisis, organizations often seek out new advice and “innovative solutions” in a concerted effort to promote growth, while mitigating downside financial, systemic, and even operational risks (for a superior discussion on orchestration, see Competing in a Flat World by Fung, Fung, and Wind, Wharton School Publishing, 2008).
Financial services industry leaders today are struggling to deliver an applicable series of innovative solutions that are relevant to our vanishing customers, investors, and of course, market overseers. However, how will we be able to sustain and adapt these innovative solutions to achieve consistent operating results? Moreover, if the ideals or solution sets cannot be sustained are we better or worse off than the original baseline six months from now after the check has been cashed?
Taken in their separate silos, innovation and orchestration appear completely divergent. However, if we combine and leverage their meanings together we arrive at the new market realities facing lenders, servicers, vendors, and outsourcing providers continuous, active, and accountable facilitation or Orchestrated Innovation.
The tasks facing the mortgage industry, today and for the foreseeable future, are concentrated around our collective organizational abilities to be integrators of many internal and vendor offerings. Ask yourself, how you can achieve one of the most common arguments for mortgage innovation and adoption—superior technologies and processes? Do you achieve it once the contract has been signed? How about when it goes into production? What about a year from now?
We all know intuitively and from extensive experience that those firms and individuals who achieve industry recognition must employ numerous multifaceted disciplines to leverage data, remove redundancies, streamline workflows, increase productivity, and yes, lower costs. They are active facilitators of operational and customer innovations that may reside with vendor products, but nonetheless, have clear base responsibility with the lending or servicing organization. Even with an outsourced solution set, primary responsibility for transformation and on-going governance must reside with the lender or servicer not the provider.
Therefore, if we were to resume the old line thought processes of ”implement and abdicate” to our vendors, we may find ourselves facing a new set of challenges underneath the same old technology wrapper. With the grudging acceptance of the “e” within our streamlined processes and data flows, the need for integration and on-going adaptation has never been greater. Combined with rising regulatory oversight and compliance reporting (some of which may resemble SOX), the technology and process challenges must be become the active role and accountability of an internal individual or team. Too often these responsibilities are poorly addressed or more frequently, disregarded in our rush to move onto the next initiative or implementation challenge.
Nostalgically, you might ask, was this not the charge of the CIO, CTO or even the CSO? The simple answer is yes, but it was nearly 20 years ago when these roles were envisioned within the corporate hierarchy. There was a great variation in consistencies and results varied widely when our solution sets were less complex and mono-faceted. In addition, orchestrated innovation was not achieved with the singular implementation of a packaged solution (i.e., killer application) as many corporate boards had come to believe.
Therefore, with increasingly specialized offerings and complex integration demands, not to mention legal challenges, active and accountable innovative facilitation (i.e., orchestrated innovation) must become part of the corporate culture and delivery structure. It cannot be outsourced it cannot be ignored.
Orchestrated innovation -- continuous, active, and accountable facilitation and integration -- is here, today, now. The mortgage industry can no longer hope for a quick recovery 4.55m unsold homes, U.S. home equity the lowest since 1945, pending Draconian regulations, and home valuation declines exceeding 25% in a year. With an industry in permanent transition, isn’t it time we internalize and embrace the accountability demand for a new approach and improved organizational role?
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In closing, I would like to welcome everyone to the first weekly installment of “Tech Innovation” here at Source Media. I look forward to your responses on the topics being discussed and the insights each and every one of you uniquely offers.
