The Art Of Opportunity

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The 2016 Progress in Lending Innovation Award winners are presented in this issue. As was the case in the previous six years, this year’s honorees are a mixture of well-established companies and first-time entrants. However, what is consistent in the applications is the detailed responses to the application criteria: significance, originality, positive change, intangible ROI, and hard savings ROI. And the applications get better every year. The panel of judges, comprised of members of the Progress in Lending Executive team, rely heavily on those responses and the scores are weighted based on the category. It has truly been an honor over the years to recognize some outstanding innovative solutions for the financial industry.

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Over the years, I have probably written over 100 articles on the mortgage industry. I certainly don’t consider myself a journalist and sometimes find it very challenging to find something unique to write about that hasn’t been presented many times before. My goal is to simply provide the reader the opportunity to explore ideas that might make a difference in their everyday life. I have primarily focused on how technology can be leveraged. I want the reader to be creative and innovative, to think outside the box, and avoid the limitations of a thought process that beings with, ‘We have always done it this way’. I am an avid reader and many of my story ideas come from a multitude of articles and books that are not necessarily related to our industry. In keeping with the theme Innovation, the focus of this article is the book The Art of Opportunity, by Marc Sniukas, Parker Lee and Matt Morasky. This book lays out a roadmap and a collaborative process supported by visualizations, tools, and templates, as well as many real-world samples, to direct you in developing a business growth plan for your organization. Let’s start with some excerpts from the Foreword:

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The difficulty lies not so much in developing new ideas — as in escaping from old ones. John Maynard Keynes

Our industry does not respect tradition, it only respects innovation. Satya Nadella, CEO, Microsoft

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When many of today’s leaders joined the workforce, ”innovation” was synonymous with research and development or process deficiencies—the hallmarks of traditional competitive advantage. Little did any us know then, that in our lifetime an entire occupational discipline would emerge to keep companies ”innovative” or continuously inventive….

But it did. And for good reason. The relativity short span of time in which we’ve seen some of the titans of industry displaced by ”innovative” start-ups put the entire business world on notice. And the message is clear: merely maintaining your position is no longer sufficient. New growth, the kind associated with genuine innovation, that will bring value to your customers, your business, and even the world around you is the only way to ensure survival….

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The problem is, finding and capitalizing on new growth opportunities is hard—especially for established organizations that are often hampered by outdated mindsets, legacy business models, or large scale bureaucracies. Core competencies can morph into corporate rigidities if we’re not strategically alert and careful. Under these types of circumstances, the ability to think outside the box and create new growth initiatives is difficult. But with increased urgency comes the need to find a new path to growth—one that isn’t rocket science.

Over the years there have been numerous business books on how to improve your organization’s innovation, strategy and competitive advantage. So, what makes this book stand out? Mainly, it is because the authors focused on two major points: Strategic Innovation that differs from traditional approaches by directing our focus on finding and seizing opportunities by creating value and Business Design Thinking that is defined as a collection of principles to help understand, address and develop solutions to business problems.

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Instead of simply addressing cost, pricing, and product/service differentiation with how to win, you focus on creating customer value by solving your customer’s needs better than anyone else.

Executives applying business design thinking to their way of working will develop capabilities and practices that differentiate them from their peers.

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Traditional strategic management is fixated on where to play and how to win. You determine where to play in your industry and with a specific market/product offering. You determine how to win by setting your competitive advantage to focus on a niche and by being a cost leader.

Strategic Innovation redefines where to play as finding new growth opportunities. The emphasis is on the customer, their needs, expectations, and experiences rather than the industry or competitors. Instead of simply addressing cost, pricing, and product/service differentiation with how to win, you focus on creating customer value by solving your customer’s needs better than anyone else. You create value for your firm with further opportunities. Inserted between the two is how to play, where you design the business required to seize these opportunities. Let’s examine this further.

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Where to play: This is all about finding your new growth opportunities. Research has shown that organizations develop more successful and innovative offerings by starting with their customers. Opportunities are a function of the chosen customer segment, its needs, expectations toward the solution offering, and current barriers to consumption or hurdles to a satisfactory customer experience.

How to play: This is all about crafting strategy, which includes the mixture of products, services, and the customer experience with the manner in which you operate and the activities necessary to do business. This will define where the money will come from, how you set prices, and how payment is made.

How to win: This is all about creating value for the customer, your organization, and the ecosystem. Instead of competing on low cost and/or differentiation, the winners in today’s economies focus on creating value and benefits for multiple stakeholders.

Finally, the book illustrates how the process for strategy making and execution and for building the new growth businesses is neither entirely linear nor completely iterative. It provides examples of how companies go through an iterative process with phases that favor action over analysis and planning.

What is Business Design Thinking? If strategic innovation focuses on the content of your new growth strategy and the process of crafting that strategy, business design thinking focuses on the practices that enable your team to achieve success more effectively and efficiently. These are the five principles of business design thinking: 1) Keep a human-centered focus, 2) Think visually and tell stories, 3) Work and co-create collaboratively, 4) Evolve through active iteration, and 5) Maintain a holistic perspective.

The Art of Opportunity incorporates each of the five principles to represent how an organization can change its way of working. Executives applying business design thinking to their way of working will develop capabilities and practices that differentiate them from their peers.

I would encourage everyone to read this book. We will continue this exploration next month.

About The Author

Roger Gudobba
Roger Gudobba is passionate about the importance of quality data and its role in improving the mortgage process. He is vice president, mortgage markets at Compliance Systems and chief executive officer at PROGRESS in Lending Association. Roger has over 30 years of mortgage experience and an active participant in the Mortgage Industry Standards Maintenance Organization (MISMO) for 17 years. He was a Mortgage Banking Technology All-Star in 2005. He was the recipient of Mortgage Technology Magazine’s Steve Fraser Visionary Award in 2004 and the Lasting Impact Award in 2008. Roger can be reached at rgudobba@compliancesystems.com.