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Commercial Mortgage Investments Group Incomplete reorganization results in operational boundary disputes, rising costs, and deteriorating loan portfolio. Background: The Commercial Mortgage Investments Group was one business within the Investments Division of a Fortune 500 financial services company. A divisional reorganization had separated this $3.5 billion dollar commercial mortgage loans business into three departments: Loan Originations, Loan Servicing, and Portfolio Management. Challenge: After the reorganization, there was no clear plan for defining new responsibilities. In the absence of guidelines, each group continued to do things as they had prior to the restructuring, which resulted in redundancies, turf battles, and operational boundary disputes. However under the new structure, the Commercial Mortgage Loan group’s success was determined largely by the level of cooperation and collaboration among the three departments. When communications broke down among the departments, hostilities ran high. As a result, the entire loan portfolio began to shrink and its quality deteriorated. For example, all three groups were taking responsibility for property inspections. This meant that a potential property was being inspected by three different departments with three different agendas. Further, little information being shared between the departments after the property visits. Strategy/Solution: As is true with many reorganizations, work that flowed smoothly before the reorganization strayed off track after the transition was supposedly complete. The Plaid Group’s goal was to guide this organization into a collaborative culture. First, we started by defining the criteria the management team used to judge the overall success of the business. Upon determining the key activities required to successfully operate the mortgage loans business, we worked with top management to divide those activities into 20 critical workflows and associated performance metrics. Then The Plaid Group defined how each of those 20 workflows passed through the three departments. We clearly delineated how the work was to be passed from person to person and from department to department. We documented each process to give the employees a comprehensible roadmap of the process that could be referred back to when questions arose. This Mortgage Loans Business Manual then served as a library of these process maps and performance measurements. The Plaid Group was able to use this business documentation effort as the vehicle for establishing shared goals, and for clarifying organizational boundaries and inter-departmental dependencies. Additionally, The Plaid Group facilitated the development of key operating guidelines for loan grading and portfolio management in order to increase portfolio quality. We also mediated specific two- and three-party disputes to resolve critical conflicts and establish more cooperative relationships between management and line personnel. Results: After working with The Plaid Group to implement effective communication strategies and clearly defined workflow processes, the subgroup’s conflict turned into cooperation. With our facilitation, the company developed a more cooperative, synchronous business environment where people worked together in a healthier way. When problems arose, employees were more willing to work together to resolve their conflict instead of just letting the pressure build to a breaking point. And should there be an impasse, they could turn to the Mortgage Loan Business Manual to help them resolve disputes. Other results included:
Testimonial from Jocelyn Sears - Formerly Vice-President for a Houston-based Fortune 500 Financial Services Corporation. |
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