Archive for January, 2008

Employee Morale: Sometimes the Little Things Make a Big Difference

Friday, January 25th, 2008

Little things can sometimes make a big difference in company morale. It’s not all about compensation and perks.

An example of this is what I did at E-Solutions Integrator, a startup at which I was COO. e-SI, a technology services / software development firm, was born during the Internet boom. Our employees were working long hours and were doing a great job in helping to build the company.

Early on, when we had 20-25 employees, I bought a gross of movie tickets. I wrote a personal note to each employee about their contribution, how they individually had made a difference to the company, and how much their efforts were appreciated. I enclosed a couple of movie tickets with each note.

I walked through the office and spoke with each individual, and handed them the personal note. This was something I’d done on a whim, and I didn’t expect the response. It really made a difference, and I saw a lot of big grins. Months later, some of the personal notes were still pinned up in employees’ cubes. It took little effort on my part, but was a big boost to morale during busy, demanding times.

An Overview of Credit Basics

Thursday, January 17th, 2008

Many people have little understanding of the fundamentals of using credit, even those who have good credit. If a basic finance course was mandatory in high school, American consumers would save billions of dollars by better managing their credit. That course is not mandatory, but I have written an article that will appear in First Time Homebuyer Magazine. Entitled An Overview of Credit Basics, it answers the following questions:

  • What is a credit report and how does it affect your loan?
  • What are credit scores?
  • How does ordering a credit report affect my score?
  • How can I establish credit?
  • How can I maintain my good credit?
  • How can I repair or improve my credit?
  • How can I correct errors in my credit report?

Working in a Regulated Industry – Dos and Don’ts

Monday, January 7th, 2008

The average company in the mortgage brokerage world is just a mom and pop business with a few people. Regulation is one reason that the industry is highly fragmented. Residential mortgage lending and brokerage is highly regulated in the United States by the federal government and by each state agency. As the President of a mortgage brokerage, one of the primary obstacles to our growth is complying with ever-changing regulations.

So how do you keep up with regulations and make sure you stay in compliance? First, join the relevant trade organizations, so you can keep up with changes. For example, in Massachusetts, I’m a member of both the National Association of Mortgage Brokers (NAMB) and the Massachusetts Mortgage Association (MMA). They keep me in the loop of both proposed changes and those that actually occur.

Second, make sure your required forms and disclosures are up-to-date and accurate. Again, belonging to national and state trade organizations helps on this count.

Third, invest in your employees. Make sure they are educated on both the relevant law and regulation and also on when and how to complete required forms and disclosures. Having educated employees also makes them better at their jobs, and customers are better served. Your company will do better because many competitors don’t bother to invest in their employees.

Fourth, audit employees’ work both during and after a transaction occurs. For example, during a mortgage transaction, when a mortgage consultant (salesperson) transmits a file to the processing center, the processor makes sure that the forms and disclosures are completed correctly. If a disclosure needs updating during the transaction as a result of a change in program or rate, then the consultant or processor, depending on the type of disclosure, is required to make it. When a transaction is completed, senior managers review files to make sure they comply with the law. If there is an document that should be completed differently, then it is reviewed with the employee. In other words, there is constant training as a result of this audit.

Fifth, make sure all of your files are in order. In our case, this not only means completed or withdrawn mortgage transaction files, but all other files we are required to keep by law. These include financial books and records and advertising (In Massachusetts, for example, one must keep all mortgage advertsing, even intangible items like radio scripts, for three years.).

What’s the result of doing all of the above? Regulators may schedule reviews or pop in unannounced. It shouldn’t matter. If your files and records are in order and completed properly, you’ll come across as a professional. The regulators will realize they’re dealing with pros, an above-average company in the industry. They may spend less time during the review and you’ll come out shining. I know, because we’ve received the highest rating during all of our compliance reviews to date.

I’ve discussed the dos of working in a regulated industry. What are the dont’s? They’re exactly the opposite of the above. Ignore the basics and you’ll end up with heavy fines, bad publicity and perhaps, even being shut down.

Communication in Your Company

Tuesday, January 1st, 2008

Communication is critical to all of life’s relationships. Anytime two or more people are involved in a common endeavor or activity, a potential for miscommunication exists. And if the potential is there, it may well happen—that’s Murphy’s Law.

While it’s not typically a major focus when starting a company like sales, finance or the other functional areas, it is critical to success. As the organization grows, careful and clear communication among the company’s employees will make or break the company, especially if it is going through hard times or is operating during a time of market turmoil.

During my career, I’ve advised hundreds of clients ranging from tiny operations to global giants. What’s separated the great from the mediocre companies, regardless of size, has been the employees’ ability to communicate effectively.

For example, many companies develop a mission and key goals. Sometimes, they’re posted on a website, in an employee handbook or in the front lobby. Sometimes, they can be found only in the head of the company’s founder. Typically, company missions and critical drivers are not communicated or not communicated well to employees. As a result, employees can end up working towards different ends and at odds with each other.

Here are some practical tips for better company communication:

  • Focus on what is important to your company—mission and goals—regularly in company meetings. You have to repeat this information over and over and over; it can take a long time to sink in. You want everyone on the same train going down the same tracks.
  • You’ll gain trust by sharing knowledge than by hoarding information.
  • If you have bad news, it’s better to let your employees know than have rumor and uncertainty eat away at your company’s morale. Keeping Morale Up When Your Business is Down goes into more detail on this.
  • Communication in person is best.
  • Communication by video is second best.
  • Communication by telephone is third best.
  • Communication by written word is the least best way to relate to someone. Words, without visual or oral clues, are easily misinterpreted. Who among us has not ended up in a series of email or text exchanges that became angrier, misinterpreted or confused because of miscommunication?