Over the last couple of months, I have focused on the
During the process of writing these articles, ops folks have offered some feedback that they like being recognized here.
In the last column, however, our topic was the breaking news that the Consumer Financial Protection Bureau was going to start
Immediately following the publication of that column, news came through that the deputy director of the bureau was resigning. So, read on because, apparently, my articles are incredibly impactful on the regulators, and today I hope they can be impactful on your business change process too.
I have discussed that the challenge for operations has been that they are tasked with managing the business, and need to constantly watch the performance of their teams to deliver on-time closings and compliant and quality loan files.
And while that might be the official job of operations, they are often given the responsibility to change the business.
And that gives them sleepless nights.
Of course, the past several months change has come in the form of mandates to totally alter the method, timing and process for disclosures, as lenders work to comply with TRID.
One of the major challenges for ops is that, at the same time they are doing whatever is necessary to keep the business operating, they are also asked to change the business. Unfortunately, they are not always given the tools or support that will allow them to do so.
There have been books written on change management and I'm not going to try to cram that kind of a discussion into this column. Instead, let's talk about a few key elements of effective change management; first, those we have some control over and then some we don't.
The first of these is communication. When it comes to change, communication should start early. It's important to then continue clear communication all the way through the implementation of the change and then on beyond that to the training required to get everyone on the new page.
When people have little time to react to a proposed change, they find it very difficult to get motivated to follow through. We'll return to this point.
In short, the operations team needs to know as much as possible about the impending change as early as possible. Then, management needs to remain in touch with the team as the change is planned and implemented, to provide feedback, inspiration and whatever other resources may be required.
Who should do this communicating? Studies indicate that the higher up in the organization the information originates, the better it will be received by employees. So, that's you, CEO.
Remember the reference to motivation? Let's delve into that.
Too often, this is the missing element when it comes to effective change management for our industry. We used to see this often when new technologies were implemented, but now that we're living in the age of oversight, it has become even more important that everyone on the team feels motivated to change.
Motivation is a very personal issue and every company approaches this differently. The key point is that it's an important element that we must not leave out. (To get some ideas on how you can use compensation to motivate your team, participate in Stratmor's
Finally, we can control how we manage change.
Tossing it over to the ops department is not the best way to achieve appropriate change in an organization.
Create cross-functional teams, plan for the change well in advance, and track every aspect of the implementation via frequent reports back to management.
You'd be surprised how often ops teams struggle to make sense of a new regulatory mandate without this level of support.
Given all that we can control, it seems change would be easy. Alas, that is not the case, primarily because three of the most critical issues are often completely out of our control: the actual requirements of the new change, the timeline for effecting change and the consequences of failure.
In our industry, the government is in control of what new rules will be handed down to our industry, the timeline for doing so and the downside risks of failure to comply. For compliance managers, that's basically a description of the scariest environment possible. It can be worse for your operational team, especially if they are ill-prepared to make a change that they don't fully understand on a timeline they may not be able to handle, given current daily responsibilities.
The bad news is that with the cost of non-compliance so high today, failure is simply not an option. Operations can respond effectively if they get the support from management that they need to manage the change. And better, the fine professionals working there are willing to rise to the occasion. Can there be any better reason to show your ops folks some love?
Garth Graham is a partner with Stratmor Group.
