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How Lenders Can Create a Winning Culture

By Mike Seminari September 2021

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There’s a saying in college football: “Good records tend to follow good coaches.” Take Nick Saban, for example, who had winning records as head coach of Toledo (9-2), Michigan State (34-24), LSU (48-16) and of course his current team, Alabama (167-23). Did I mention his lifetime winning percentage is .797 and he has seven National Championships, more than any other coach in college football history?

Love him or hate him, there’s one thing we should all be able to agree on: he’s not just lucky.  That is, he is not a product of his environment. He creates his environment. He brings a culture of winning with him wherever he goes. With mergers and acquisitions dominating mortgage industry news this year, lenders would do well to take a page from Saban’s winning culture playbook, especially those looking to acquire or be acquired.

Our question this month: How can lenders create a winning culture that is worthy of sharing and replicating?

How Can Lenders Create a Winning Culture?

There have been some big M&A headlines in the past year, including the purchase of Stearns, HomeBridge, Residential Mortgage Services, Flagstar and many other big deals. There have also been a dozen smaller deals, but no matter what the size, whether on the buyer side or the seller side, one of the biggest questions that routinely emerges is, “Is there a cultural fit between these two organizations?” 

It’s not an easy question to answer because cultural fit is not something you’ll typically find noted in nice, neat spreadsheets tables the same way you see earnings, compensation, and productivity. Culture is a bit more nuanced, more of a feel thing, but that doesn’t mean it can’t be measured and improved. Two great ways of measuring the health of a culture are to 1) collect feedback from your own employees, and 2) look at the consistency with which your people and processes are producing “delighted” borrowers.

Market consolidation hit a fever pitch in 2018-2019, then got a reprieve in 2020 due to a variety of pandemic-induced factors, but it’s back in 2021 with fervor. If you are experiencing success in the current market, you’re very likely either looking to expand or you’re on someone’s radar as a potential acquisition — maybe even both. And what makes lenders desirable in an M&A market aside from the prerequisite profitability is that they have a great culture. High quality culture not only attracts potential buyers, but also affects your ability to recruit and retain top talent and even attract borrowers. In a purchase market, which is where we’re quickly heading, the ability to recruit and retain top talent is crucial to success.

The consistency of culture that Nick Saban has been able to foster over the past 30 years with different organizations has been possible because it has been intentional.

It starts with great recruiting.

“I’ve always been able to stay focused on trying to recruit good players and trying to develop those players.” — Nick Saban

One of the best ways to set a high standard of company culture is to share your company vision with recruits and explain that you’re looking for much more than a warm body with high production. Ask interview questions that reveal character (or lack thereof). Let your recruits know that you care about their employee experience and intend to develop them to their full potential.

Great chemistry requires standards.

“We create a standard for how we want to do things, and everybody’s got to buy into that standard or you really can’t have any team chemistry. — Nick Saban

If you want to raise the bar on collective performance, you need to have a starting place for that bar. Viewing your performance against a National Benchmark helps you set challenging, reachable performance goals for your team members. Whether it involves personal score ratings from borrowers or more general feedback about miscues along the loan process, awareness breeds the expectation of excellence, which breeds chemistry.

Every person’s contribution matters.

“The formula for success is everyone can make a difference for the entire team in whatever their role is. And to do it right, to get it right, is a critical factor in being successful.” — Nick Saban

Some team members have only brief interaction with the customer. Other team members may not be customer-facing at all. But make no mistake; these employees’ roles in creating a raving fan customer are every bit as crucial as the originator. A processor who mistakenly asks for the same document twice, an underwriter who takes their sweet time responding to questions and providing new conditions, or an originator who neglects to make the call prior to closing to go over final numbers all contribute to — or detract from — the customer’s overall experience. A delightful customer experience is dependent on ALL of these things going right, which incidentally produces a 96 Net Promoter Score (NPS). Get one thing wrong and no matter where the fault lies, NPS drops by 75 to 100 points.

What’s a Lender to Do?

Creating a winning culture that is worthy of sharing and replicating takes the right vision, the right people, and the right game plan execution:

  1. Craft a compelling company vision.

    Your goal is to align the “why” for executive management and originators. Find a way to state your values that puts the customer first but doesn’t neglect the needs of both corporate leadership (bottom line) and originators (increasing personal wealth). Here’s an example from Nordstrom: “To serve our customers better, to always be relevant in their lives, and to form lifelong relationships.”

  2.  Identify role models.

    “People who are role models for the principles and values of the organization, who buy in and understand the vision of what the organization is trying to accomplish and have the personality to inspire other people to the vision. You know, that’s what team chemistry and leadership is all about.” —Nick Saban

    Find ways to recognize and honor not just top producers, but originators, processors and underwriters who provide exemplary service and create a delightful, memorable customer experience. Share interview-style thought leadership pieces internally. Give shoutouts in weekly or monthly newsletters. Use as many “carrots” as possible (recognition, financial rewards, etc.).

  3. Measure, execute, repeat.

    “We have got to use every opportunity to improve individually so we can improve collectively. Success doesn’t come from pie-in-the-sky thinking. It’s the result of consciously doing something each day that will add to your overall excellence.” — Nick Saban

    Survey every customer and go as deep as possible without cutting into your response rates (shoot for 15-20 questions minimum and 35 percent response). Every piece of data you gather is an opportunity to create awareness and coaching moments with your team members. Then survey your team members and implement strategies that will create more delight with them. Keep measuring and adjusting. Excellence has no room for complacency!

 

How Can We Help?

STRATMOR works with bank, independent and credit union lenders on strategies to solve complex challenges, streamline operations, improve profitability and accelerate growth. To discuss your mortgage business needs, please Contact Us.

The most successful lenders live by their numbers; they embrace change and create a culture of accountability and transparency.


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