CFI: Opinion
A good time for a rethink by
Rob Lankey, head of lending, Aldermore Commercial Mortgages
Just as we all thought that per- haps the worst of the reces- sion was behind us, so there is talk of a ‘double dip’ and the possibility of the economy sliding once again into the doldrums. You don’t need to be an economic expert to see why such concerns are being expressed. much of the government support which has propped up the economy over the past year has been removed. What’s more, Vat is to be increased to 20% and thousands of public sec- tor workers have been told they’re either going to re- ceive a three year pay freeze or lose their jobs altogether. and to compound problems, there are continuing concerns about the health of the euro- zone and the state of the uS economy. i’m no economic forecaster
so i’m not going to put my head on the block and predict whether all this doom and gloom turns into a minor blip or major setback, but it does seem sensible for us all to ac- cept that we’re in for a period of continuing economic slow- down. So what can we do about?
Well, as individual businesses we don’t have the power to change the economy, but we do have the power to change our companies and when trading slows it’s often good time to redefine what our or- ganisations do and how we do it.
Twice as nice after relaunching as alder- more 12 months ago we’ve steadily grown our commer- cial mortgage business via a panel of professional brokers to the point where we are now writing approximately twice as much business as we were just before we had to shut our doors nearly two years ago. the higher business vol-
umes are not a consequence of having access to fund- ing; we had funding in place right up to the time we shut our doors back in 2008. it’s because we’re now working smarter than we did before. For example, although we now work with half as many brokers and receive half the volume of mortgage applica- tions we did two years ago, the value of our monthly comple- tions has doubled and the quality of business has also increased significantly. So what did we do to effect
such a dramatic turnaround? it’s no exaggeration to say that we completely re-engineered our business, from creating new ways of working with business introducers to the development of new com- puter systems. We started by clearly defining our objectives, which were not only to gener- ate high quality business, but to do so by providing a high quality service which would encourage brokers to remain loyal and submit more busi- ness to us in the future. a clas- sic ‘virtuous circle’. We started by appointing a small panel of just a dozen or so professional mortgage brokers who we knew well. not only did this ensure we received the right quality of applications, but it also enabled us to guarantee a
36 mortgage introducer AUGUST 2010
high quality service from the word go. Service is easy to talk about
but far harder to control and deliver. We listened carefully to our panel of introducers who told us horror stories about big banks who would not turn applications around in a timely fashion; who re- fused to make staff respon- sible for cases throughout
“ As individual businesses we don’t have the power to change the economy, but we do have the power to change our companies.”
the application process and who seemed more focussed on finding reasons to say ‘no’ rather than ‘yes’. our solution has been to appoint highly ex- perienced case managers who are responsible for cases from start to finish. if applications are submitted that are not an immediate fit, it is their job to see if we can find ways to do the deal. that doesn’t mean we compromise on under- writing standards; quite the opposite. However, we work with brokers to see if there are alternative finance structures which suit their clients’ needs.
Tesco traffic lights another new initiative has been the implementation of a traffic light system to manage workflow. the idea came from tesco, who use a similar system to manage checkouts at busy times. the purpose of the system is to ensure everyone, including the field-based members of team, understand the stresses and strains of workflows so our resources are deployed where they’re needed most. if we have particularly busy days and can see bottle- necks starting to develop, we can transfer staff so that our service objective of confirm- ing terms within 24-48 hours is not compromised. We even copy our largest supporting broker in to our traffic light data, so that they can see, real time, how we’re coping with new business inflows. these are just a few of the
ways in which we’ve been able to take advantage of a quiet market to re-engineer our business and the effects have been profound. in reality, our business is entirely different to the one it was just two years ago and is providing a better service for brokers and better returns for shareholders. taking time out to rethink
how your business can be improved is a scary prospect and is easily put off. But don’t. if the market in which you trade has changed, as it has for most brokers, then your business probably needs to change too. now is the time to bite the bullet and take a long, hard look at how you want your business to be in the future, rather than try to keep it going the way it was in the past.
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