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A client of Solutions wanted to determine their leading indicators for a mortgage lending business. They dealt in C paper (subprime lending). They got their business from mortgage companies that were unwilling to lend on those types of loans (too high risk). Typically these loans are messy, have a lack of follow through on the lendee’s side and require much hand holding for the lender to close the deal (lots of follow up to collect all the necessary documents). The client was looking at increasing the number of loans going through his business as a means to expand his business. The first thing we wanted to do was develop an indicator that would tell us length of time for a loan to go through the business. This would give us insight into predicting how much overhead it would take to expand the business. Armed with this leading indicator as well as another indicator that established the profit per loan per time it took to process we now could see:
What we determined that to grow his business (from $4 million in Revenue to $20 million in Revenue) with the current model, the amount of overhead needed would radically decrease profitability as building space and furniture etc would need to be added. They were at capacity with each loan officer already. Looking at the amount of time it took each loan officer to complete a loan we began to search for ways to improve efficiencies with the loan officers. At the time it was very difficult to hire good loan officers because the mortgage companies were paying top dollar for talent.
Each officer was interviewed to determine what constraints they experienced. The most typical response was:
This showed us immediately that if we could cut down the amount of time a loan officer spent on the phone dealing with the loan status it would greatly impact the number of loans that could be processed. Our client was in the process of having all the loan docs scanned in (storing the paper was also becoming a major issue) so we decided to combine that effort with time reduction. The outcome was additional money was spent on programming to allow the loan officers on line access to each loan doc. From there the IT department created secure login’s for the mortgage companies to access only their files. Now they could view on line the status of each loan. They could see what each doc was missing. And if the customer needed another copy it was on line and all they had to do was reprint it. The calls dropped dramatically. So much so that the time it now took each loan officer to close a deal dropped from 45 days to 10 days. They could now handle 4 times the work with the same staff (and it cost the same as one Full Time Equivalent (FTE).
Conclusion: The KPI’s we developed gave us insight into our constraints, the effectiveness of each loan officer, and improved our ability to plan for steady growth.
I learned more in a 3 hour session than 3 days at a Harvard Business School Management training I recently attended .
Joe Panetta, President & CEO, BIOCOM
My group helped me rekindle my passion for the Law. My chair and group members hold me accountable to the commitments I make, and they challenge me to create a professional and personal life that is rich and fulfilling. They will settle for nothing less for me.
On a more practical note, I developed a P & L on each attorney, at the urging of Rosemary, to show the bottom line contribution of each attorney within the firm. We then used that document to have discussions with each attorney about their contribution to the firm at review time and bonus time. Results: eliminated 2 low performers and increased the effectiveness of the remaining team members. My Group also assisted me in analyzing where and when to move my offices.
With the assistance of my group and my chair, Rosemary, I am now creating a legacy at BPP that I can be proud of when the time comes to retire.
Tom Balestreri, Managing Partner, Balestreri, Pendleton, Potoki, LLC
Rosemary got my head back in the game. She helped me revitalize my business and my objectives for my future.
(developed & implemented an effective Exit Strategy )
David Stowe, Principle, The Ardell Group
My executive team was highly dysfunctional until the Solutions team began working with me, and eventually my direct reports. Now we manage conflict constructively. We have trust and accountability. As a result, my team have created a blue ocean strategy for our industry.
Anonymous, General Manager, Public Company
