Burgers & Mortgages

 I recently read a LinkedIn article about McDonald’s efforts to retool its operations to meet shareholder demands in the wake its rapid growth of menu and product offerings.  The article was written by Aaron Allen, a global restaurant consultant and founder/CEO of Aaron Allen & Associates.   According to Allen, McDonald’s menu items grew by 75 percent in a ten-year period from 2004 to 2014.  In Allen’s opinion, this rapid growth slowed down McDonald’s operation by adding complexity, complication and confusion for both the franchisees/operators and guests.

The article reminded me of a recent conversation I had with Jim Wickham, CMB, about the complexity, costs, and speed to close a residential mortgage.  Burgers and Mortgages – not so strange.

Like McDonald’s, the mortgage lending industry experienced a growth in menus and products before the financial crisis years ago. While the menu contracted after the financial crisis, I’m beginning to hear of larger product offering menus again.  Along with larger mortgage menus, numerous service delivery systems now exist. Retail, Wholesale, Correspondent, On-line, Referral, Call Center, and more. Borrowers can now experience anything from amazon-like service delivery with technology driven lenders to Nordstrom-like service delivery with a highly personalized hands-on style. 

But more choice is not always a good thing.  In The Paradox of Choice, Barry Schwartz provides case studies and lessons learned from a variety of industries to illustrate how too much choice can be detrimental to our psychological and emotional wellbeing.  Synthesizing current research in the social sciences, Schwartz makes the counterintuitive case that eliminating choice can greatly reduce the stress, anxiety, and chaos in our lives.

The bottom line:  Keep it simple. Make things clear to your target audience and execute to near perfection.  This may mean reducing your product offerings or altering your service delivery style to match your target audience. While attempting to provide everything to everyone may seem attractive, it’s likely to collapse under the weight of too many options and mediocre execution.  Fast, simple and repeatable delivery to a targeted audience results in greater throughput and if done correctly – a more profitable result.  As a few of my CMB colleagues like Jim Wickham, Dan Sugg, and Griff Straw have said for years, “do what you do well - and repeat.”

by Terry Aikin, CMB, CEO, Synergy Appraisal Services

 References:

Jim Wickham, CMB, VP Union Home Mortgage

Dan Sugg, CMB, EVP Centennial Lending Group

Griff Straw, CMB, Principal, Griff Straw CMB, LLC