Many organizations acknowledge that innovation is important to their growth
By Roger Gudobba
I admit that ‘Innovate or Die’ may be a bit melodramatic, but in reality innovation is just a novel solution to a new problem. A common definition of innovation is an improvement to something already existing. For an improvement to take place it is necessary for people to change the way they make decisions or make choices outside of their norm. It is the creation of better or more effective products, processes, services, technologies or ideas that are accepted by the market.
Innovations can be divided into two categories. First there are evolutionary innovations brought about by incremental advances in technology or process. Second there are revolutionary innovations (also called discontinuous innovations) that disrupt a routine and may require new behavior and increased risk as they create new market opportunities.
Simplicity is one of the keys to successful innovation. But it’s not the same as a simple idea. It’s about taking sophisticated ideas and designs and being able to reduce them down to a simple explanation. For example, look at Sperlonga, one of the 2011 Innovation Award winners. They built a simple, but ingenious, solution to build a bridge between the mortgage servicers and the Homeowners Associations to identify delinquent HOA dues and quickly resolve issues before foreclosures. Or look at GreenBar, another winner this year that developed a unique approach to the point-of-sale from a consumer viewpoint. They both thought ‘outside the box.’ The word “innovation” is often synonymous with the output of the process.
In the business world you are told to be proactive rather than reactive. But being proactive is the same thing as being reactive. The only difference is you do the reacting ahead of time.
A well planned, proactive solution is more likely to succeed and less likely to create stress. With contingencies already in place, a problem is more easily addressed than if reactionary contingencies have to be developed as problems occur. Being proactive is a skill that takes time and effort to perfect. Considering all the long term benefits, you have to wonder why all organizations don’t have this as a crucial part of their strategy.
Let’s examine why lenders seem to be slow to change or adapt new technology. By its very nature, mortgage lending is a risk-adverse industry. Lenders feel comfortable with the status quo. If it’s not broke, don’t fix it. Status quo is ultimately about playing it safe, protecting egos and fighting inevitable change. It is the general conception ‘that is how things are done around here.’ Status quo can be your worst nightmare.
Read more in Tomorrow’s Mortgage Executive