The mortgage industry struggles to complete the job of strategic execution, which is setting the conditions for continued challenges. Executives today should be asking themselves in what way should their current business lines be modified or even eliminated to make way for more relevant products before change is forced upon them.

Industry management has to determine the utility value of business segments during a time of dramatic market adjustments and regulatory change to remain relevant in the market. Our rapidly changing environment requires industry executives to have a more comprehensive vision and the ability to execute a plan from multiple angles as well as develop teams to execute and deliver. Strong leadership stems from understanding what to stop, not just what to start. Therein lies the key and the challenge to successful product sequencing.

Historically this has meant a practice of deleveraging, re-assessing, buy/build decisions and developing integrated value chains. This is a lengthy effort during which access to capital is often low, making certain types of investments less appealing. Since 2007 the mortgage banking industry has moved through these stages. M&A activity continues, as firms shore up their models and diversify revenue streams.

Well beyond M&A cyclicality and short lived partnerships, successful firms have recognized the concept of product sequencing models, also known as revenue replacement models. While this may sound like an exercise for a business management course, executives should regularly assess product longevity to keep their business channels viable.

Successful sequencing models typically involve three critical stages, however, they all start with one key element; a targeted team. Regardless of the size, this must be a dedicated team and cannot be an occasional strategic discussion among managers and executives.

While industry experience and knowledge are key requirements for members of this team, more highly valued is their ability to identify and correlate events in and around the mortgage banking industry. This would include understanding the actions of industry participants, technology innovation, macro-economic issues affecting growth, geopolitical developments affecting capital flow and new regulations affecting the housing market.

These highly skilled teams must correlate this assorted information, and be able to identify future market opportunities and product gaps. This is an acute, somewhat clinical talent. They must consider multiple variables to diagnose the health and prognosis of the industry, and their product set for the next several years. Here are the three stages the team must usher the company through:

Research and development of new products. The team is expected to understand, decipher, associate and translate a broad range of information with the goal of accurately recommending and helping to launch new products.

Manage and monitor. Once launched, each product must be appropriately monitored on a variety of performance targets. The team, working with the business unit, needs to drive continuous improvement, sustain or improve the revenue model and report performance.

While the first two components are fairly standard in many industries, the third is not.

Planned extraction and adaptation. This is the overlooked yet crucial step of a successful product sequencing model. The team must continually assess the product longevity and viability, communicating regularly with leadership. They should then actively plan and cleanly extract the firm from the specific product line (or business channel) prior to the point of diminishing value. Better yet, these individuals can also help the company adapt parts of the old product into a new offering. Success in this area requires flawless coordination with the R&D team for effective sequencing of revenue replacement.

The team has the responsibility to monitor and confirm or adjust anticipated extraction planning based on changes in the industry, the firms risk appetite, economic environment, regulations and other factors.

A haphazard, disjointed approach will produce ineffective results. The success of executing a product sequencing model requires precision and strong executive endorsement. This is a cultural shift, which in a rapidly changing business environment could mean the difference between failure and success.

Debora Aydelotte is the president of Altisource Origination Services. She has more than 20 years of experience in risk management, originations platform management and business line development.