One of my mentors used to tell me this story as a humbling, learning lesson. A few years back, one of our American presidents was on a PR campaign. He was visiting a nursing home. He met a man walking down the hallway and went over and shook his hand. He said, “Do you know who I am?” The man looked at the president, but did not recognize him. He replied, “No I don’t sir, but if you ask one of the nurses maybe they can tell you.”
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Contemplation is a humbling experience. If you ask the right sequence and series of questions, sometimes, just sometimes, business and technological innovation can surface in the strangest ways. The relevance of innovation is frequently revealed amidst the failures of our past.
Recently, I was asked by a group of potential investors what I thought were the top business and technological questions on the minds of mortgage/FSI executives what encompasses their innovation and survival agendas. Listed below is a compilation of the categories and questions that came from these rigorous reviews in our struggle to frame relevant innovation.
Customer and Privacy: The consumer is vanishing -- so where are they going? What effectiveness can be realized, sustained and made adaptable? Do we really have a product and service strategy that makes sense?
Personnel: Do we have the skill sets of yesterday or the ones needed for tomorrow? How will we find and retain those personnel that can lead us forward with a strategy yet to be crystallized? Can our personnel be revitalized and reeducated? How?
e-Strategy: With all the coverage and euphoria on e-solutions, what makes the most business sense for our firm? What will it take to achieve and at what cost? Can the return be sustained and made into a competitive distinction for advantage and profit? Can mortgage processes assimilate orchestration improvements from the trading world (e.g., SIA, DTC, STP, T+n, FIX, exchanges)?
Process: How can we holistically examine the processes from end-to-end and remove those that are archaic and non-value added? How can technology be used as a catalyst to ensure efficiency and rigor? Do we even know what processes we must develop to meet the changing market, consumer and regulatory demands?
Sourcing/Outsourcing: With labor arbitrage no longer the driving force, what are the criteria needed for selection and on-boarding? What will be involved with knowledge processes in terms of transition, transformation or governance? What will “level 3” rigor and insight provide as we begin to commoditize ITO and BPO offerings? Will travel, security, privacy and public sentiment deliver a new operating mix?
Regulatory Compliance: Can SOX and Basel lessons learned be utilized to create an integrated operational compliance solution addressing current and proposed guidelines? How can we avoid costly “one-off” solutions and vendor relationships? Where can we find knowledgeable guidance?
Orchestration: How can orchestration, driven by manufacturing techniques, provide a transformation and restructuring agenda? Do we know how to orchestrate as compared to simple integration? Do we possess the innovators and new thought leaders, or are we just using old practices with new labels?
Architecture: What are the iterative blueprints for catalyst change? Are they cohesively identified and modeled? What disciplines and methods are we using and are their better ones that we must consider? How do ITIL, SaaS, widgets, SOA, and the rest of the “alphabet soup” of acronyms fit into the mix?
Infrastructure: What is it really costing us for the value returned? Does it conform to the architectural strategy and models or are we divergent from planning to execution? How can it be “ever-greened” without a “lift and shift” or total replacement? Who do we trust? What are the real life-cycle costs?
Data and Standards: What is the totality of our data and how can it be used? Are standards useful or part of the “old guard” dogma influenced by aging ideals? How can we manage the vast array of disparate data types and sources for documents, reporting, integration, investors, legal reviews, and compliance? What will it cost?
Due Diligence, Risk Management, and Legal Representation: In good times, IT due diligence consumed 1% to 3% of budget what will a caustic operating environment inflict on marginal pressures? Do our legal practices and practitioners represent our “best face forward” or are we inflicting even greater damage on our brand and reputation with existing loss mitigation and foreclosure practices? Should we treat the AG’s (attorney generals) as foe or embrace the need for change compromise? How much “fraud” has been endured and taken into our portfolios within the CDO/MBS instruments?
Competency and Investment: What centers of competency need to be expanded or developed for new market practices and offerings? With top line revenue evaporating, LOC frozen, and PE ratios at historic lows, how can we be expected to reinvent ourselves without sufficient capital? Moreover, what infrastructure is even demanded given the legacy environment already in place? Should we outsource anything not deemed to be core?
Community: The housing indices point to communities and homeowners in complete disarray (e.g., Shiller, MBA), so how will our actions be aligned with the “right thing to do” and our ability to stay in business? How can we embrace not-for-profits and community activists without incurring additional liabilities or negative coverage?
So why did I frame these particular questions?
Just nine months ago we thought everyone knew us and respected us. Our leaders were icons of success. Our solutions revered by the establishments, our support teams, and those that sought to acquire our operations. When asked by consumers, investors, and politicians, many individuals and organizations thought they knew us we were evidently someone else. Today, we are like the story. No one is sure who we are and we’re not sure how innovations (e.g., process, business and technical) can be used for offerings we must possess if we only knew what they were.
We cannot be like the old CIO who once said, “You start coding, and I’ll go figure out what they want.” So when you contemplate your next move, review that next system, or determine your next series of layoffs, ask yourself, “Am I asking the right questions for the new business and economic realities?”
If you are wondering about the title, it is Italian for “Mirror, Mirror.”
