- 1 day ago
On this episode of Power House, Zeb sits down with Larry Bailey from Mortgage Workflow Partners, who began his career as a loan processor in 1993 and now champions a simple but disruptive idea: “workflow before technology.”
Bailey argues that most mortgage and real estate organizations have invested heavily in software and AI without first understanding how work actually gets done. Rather than improving efficiency, new technology is often layered onto disorganized processes because workflows were never clearly documented or owned.
The conversation digs into how sales-led leadership shapes this reality. In lending, top leaders rise through sales, where adaptability is rewarded, but workflow is often overlooked. As a result, that critical knowledge resides with individuals rather than in documented processes. Bailey explains that workflow interviews quickly reveal the difference between employees eager to improve operations and those who rely on tribal knowledge to protect their value.
Bailey defines workflow governance as documenting processes, assigning clear business ownership and continuously maintaining them as the organization evolves. He shares examples of large lenders where every branch operated differently, creating inefficiencies and making leadership nearly impossible. His approach establishes a standardized best-practice workflow while allowing teams flexibility beyond the core process if they choose.
Looking ahead, Bailey believes technology alone will not reduce production costs or burnout. Despite years of investment, the cost per loan remains stubbornly high because organizations continue automating broken processes. Sustainable improvement comes from understanding the work first, then using that visibility to determine where technology belongs, what should be automated and how employees can focus on higher-value activities instead of repetitive tasks.
Related to the episode:
Zeb Lowe’s LinkedIn
https://www.linkedin.com/in/zebulon-lowe-a02353a4/
Larry Bailey's LinkedIn
https://www.linkedin.com/in/larrybailey/
Mortgage Workflow Partners
https://mortgageworkflowpartners.com/
Want more from Zeb? Don’t forget to subscribe to LendingLife.
https://www.housingwire.com/newsletter/
The Power House podcast brings the biggest names in housing to answer hard-hitting questions about industry trends, operational and growth strategy, and leadership. Join HousingWire’s Zeb Lowe every Thursday morning for candid conversations with industry leaders to learn how they’re differentiating themselves from the competition. Hosted and produced by the HousingWire Content Studio.
Bailey argues that most mortgage and real estate organizations have invested heavily in software and AI without first understanding how work actually gets done. Rather than improving efficiency, new technology is often layered onto disorganized processes because workflows were never clearly documented or owned.
The conversation digs into how sales-led leadership shapes this reality. In lending, top leaders rise through sales, where adaptability is rewarded, but workflow is often overlooked. As a result, that critical knowledge resides with individuals rather than in documented processes. Bailey explains that workflow interviews quickly reveal the difference between employees eager to improve operations and those who rely on tribal knowledge to protect their value.
Bailey defines workflow governance as documenting processes, assigning clear business ownership and continuously maintaining them as the organization evolves. He shares examples of large lenders where every branch operated differently, creating inefficiencies and making leadership nearly impossible. His approach establishes a standardized best-practice workflow while allowing teams flexibility beyond the core process if they choose.
Looking ahead, Bailey believes technology alone will not reduce production costs or burnout. Despite years of investment, the cost per loan remains stubbornly high because organizations continue automating broken processes. Sustainable improvement comes from understanding the work first, then using that visibility to determine where technology belongs, what should be automated and how employees can focus on higher-value activities instead of repetitive tasks.
Related to the episode:
Zeb Lowe’s LinkedIn
https://www.linkedin.com/in/zebulon-lowe-a02353a4/
Larry Bailey's LinkedIn
https://www.linkedin.com/in/larrybailey/
Mortgage Workflow Partners
https://mortgageworkflowpartners.com/
Want more from Zeb? Don’t forget to subscribe to LendingLife.
https://www.housingwire.com/newsletter/
The Power House podcast brings the biggest names in housing to answer hard-hitting questions about industry trends, operational and growth strategy, and leadership. Join HousingWire’s Zeb Lowe every Thursday morning for candid conversations with industry leaders to learn how they’re differentiating themselves from the competition. Hosted and produced by the HousingWire Content Studio.
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NewsTranscript
00:00Hello, and welcome to Powerhouse. Producer Rebecca filling in for Zeb while he is on the road. I am
00:05here to introduce you to our guest today, the one, the only Larry Bailey. The mortgage industry
00:11can't stop talking about AI, and today's guest has spent 30 years arguing that the conversation
00:16is backwards. Technology doesn't fix a company. Workflow does, and most lenders can't even tell
00:22you what theirs actually is. Larry Bailey is the founder and CEO of Mortgage Workflow Partners,
00:27author of the Workflow Before Technology series, and the guy that lenders call when the expensive
00:32software they bought isn't doing what the demo promised. Zeb and Larry get into why lenders
00:38and tech vendors keep signing multi-year deals without really knowing each other,
00:42and what a leader should do about it in the next 30 days.
00:57Larry, thank you for joining me. Thanks, Zeb. Thanks for having me.
01:01Yes, sir. Of course. You know, I feel like, actually, I know this. You're a really well-known
01:05figure, I believe, in the mortgage industry, but the powerhouse audience we have, you know,
01:12we have listeners that are in the real estate space and tech space and even in the home building
01:17space. And so I wanted to see before we dive into things, if you'd mind introducing yourself a bit
01:22to the audience and sharing a little bit about yourself and, you know, what you and your team
01:26are doing at Mortgage Workflow Partners. I appreciate that, Zeb. Yeah, it's funny.
01:31Back in 93, when I started as a lone processor on a typewriter, fast forward 33 whatever years now,
01:41it's funny to hear you say I'm like a well-known. I still think I'm just a guy on a
01:45keyboard behind,
01:46you know, a video screen kind of a thing. But having said that, what I realized is that there's
01:53a lot of folks that I think are in need of some really good guidance with regards to workflows
02:00because I watched, like I said, I started on a typewriter. So I've watched the industry progress
02:07into what it is now. And folks are still believing that they're working on paper,
02:12whether it's mortgage, whether it's insurance, whether it's real estate, whether it's home building.
02:18As much as we think we can do business on our phones, it really the workflows that people behave
02:23are still on a piece of paper. And so I built my company, started my company five years ago. But
02:32more importantly, over the last two to two and a half years, we've found a good footing into
02:37having people understand what it means to put workflow before technology. That's our registered
02:42trademark, but it's really what we do. And so a lot of folks we just talk to and listen to,
02:47listen to how they're behaving, what they're doing step by step, and showing them how they
02:51can do things better, how they can leverage what they already paid for. And especially now with,
03:00you know, everything's AI, and everything sounds really sexy, we should be able to do more with less,
03:05and people are just frustrated because they haven't figured that out yet. So we help them.
03:09Yeah, but that workflow before technology, that's your core ethos, you know, you said it's
03:15trademarked. I mean, you've got a book or book series around it that's at the core of your
03:20company. Can you unpack that phrase and share what that means in, beyond a phrase? What does
03:28that mean in practice at an organization? Yeah, it's very simple, right? If you don't
03:35know what you're doing, how can you possibly do it really well? And so for me, what I found was
03:41that
03:42teams were asked to perform better with a new widget that the company got or a new service the
03:52company is paying for. But nobody figured out how to actually use that based upon what that service or
04:00technology does, as well as what the company's doing before, during, and after that movement.
04:07And so for me, I went to school for engineering and finance. I hate engineering, because I really
04:15don't care how much force it takes to move a pencil, you know, three meters northwest. But the process of
04:23understanding those steps is in my brain. It's in my pattern. And so the workflow before technology,
04:32I don't know, honestly, where it came from, like truthfully, but nobody else was saying it or doing
04:37it. And so I latched on because people can understand that, you know, you got to come up
04:41with something that people get. And so what I tell people is you've got a brand new iPhone. That's
04:48great. How are you going to use it? Or you've got a brand new AI tool. That's fantastic. It's got
04:53great
04:54capabilities. How are you going to use it? And that's where I find most people have no idea.
04:58And so, you know, it's important to focus on that first.
05:02You've made the point that in the lending industry, at least, that so much of it is run by people
05:07who
05:08come up through sales, definitely not through governance or any sort of, you know, technical
05:12background. Do you think that that's a, how much of a contributing factor do you think that that plays
05:19in what you see happening in organizations?
05:22It plays into the concept of, I believe the mortgage industry as a general statement,
05:28generalization, we're, we're tactile learners. So in other words, it's like, you can show me,
05:33but until I do it myself, I'm not going to really be good at it kind of thing. It's a
05:37very tactile
05:38industry. And so when you've got exceptionally gifted, talented, successful people, you typically
05:46find those people in sales, right? Companies are built on, if you don't have sales, you don't have
05:50a company. So it's very normal. If you look in every organization, typically those leaders came
05:59from sales background or, or, or had sales in their background, because you've got to guide people,
06:06mostly you have to sell people on what you're doing. The challenge with that is salespeople who
06:11are really good are very good at, at adoption, uh, at adoption of, of what's happening. They can pivot
06:17really well. And when you pivot really well, uh, the last thing you do is document because it's always
06:24changing. It's really hard. Problem is when your organization grows and nothing's documented, people
06:29will do whatever they need to do in order to finish their job. They'll make it up on their own.
06:35Fast
06:35forward that, replicate that. All of a sudden, now you have an entire business where the reason
06:41why your company is successful is because of the knowledge in someone's brain, which is totally
06:45fine until that person isn't there or until you need to make a decision. And you didn't think that
06:53that person was connected because you don't have your workflow documented. So I, you know, that's kind
06:58of where I see generally speaking, complete generalization, but most organizations who have, uh, great
07:05success in growth have taken the time in some way to actually document how their workflows behave.
07:12Especially now, if you look at the top, the top leaders in the industry, lending industry in
07:16particular, um, their businesses have grown because they figured out what works well. They've written it
07:23down and they have their teams follow it sometimes to the letter, sometimes with flexibility, but there's
07:29always this thread that people still follow, um, that those companies know work.
07:35I got a number of questions that I want to ask you about whenever you get into an organization.
07:40And, and I'm curious as to kind of the, the, the mix, uh, of the companies that you, that you
07:47work
07:47with, you know, how many companies do you work with going into the situation, entering into a contract
07:52with, and let's say that they, they know kind of they're in trouble. They know that they really need
07:57you versus organizations that might be, they think that they're running fine and they perhaps
08:03they're, they're, you know, they, they contact you and they bring you in because they either want to
08:07verify that or they want to clean things up or do some general housekeeping. What does that mix look
08:13like? That's a good question. I'd say it's, it's probably, if I, if I had to guess, it's probably
08:1850, 50, um, the, the times that were brought in because somebody can't accomplish something that
08:26they're trying to accomplish that. If you ask that question, it's probably 90, 10, 90% of the time
08:33teams have tried to figure something out. They've gone as far as they could and they, they're stuck.
08:38They don't know what else to do. Um, that's a high percentage. The times where somebody is like,
08:44Hey, just check us out. Like, like, are we good? Um, we actually set up, uh, we do what's called
08:50the
08:50settings analysis and we do a workflow alignment analysis. Those two things are built for that
08:56moment. And that's, like I said, that's like 10, maybe 15% of the time. And as a result of
09:01that,
09:01that's when companies go, Oh, didn't know that was going on. Thank you. And sometimes they go fix
09:09it on their own. Sometimes we work on just a specialty part. Um, but yeah, most of the time
09:14companies are, they're not like in deep trouble. They're, they're sensing something or their teams
09:21have gotten far enough, but the company's like, we need to keep going. Why aren't we going?
09:26And the teams have shot their shot. Like they don't have anything left. And so they, they give
09:30us a shout out. That was, that was what I wanted to ask you is the organizations that bring you
09:35in
09:35and they think that they're running fine, generally speaking. And they just like said, want to do some
09:40house cleaning or want you to double check for them or something. Um, what, what do you find is the,
09:46the, the most common, uh, problem, uh, with those sorts of organizations? Is it just that they have
09:53more institutional or their institutional knowledge or tribal knowledge that's guarded by their, you
09:59know, guarded by the, the people that have that information in their brain that's tied to like their
10:03own job security? Uh, what's the, what's the typical culprit in that sort of environment?
10:10It does depend on the, it does depend on the company. Um, I would say the, the, the more
10:16common situation that people have is they are those, those folks in those, those department levels are
10:22doing what they think they should be doing. Kind of like what I said earlier, they, they, they've never
10:27really been trained or if they were, it's been a long time. Um, they're not really in touch with what
10:33the business is doing. They're just constantly just trying to keep up with the production that they have
10:37and they're smart. They're talented. They're going to figure things out on their own.
10:41Even if you didn't tell them to do something a certain way, somebody is going to try it. They're
10:45going to do peer to peer sharing. Um, and they're going to figure things out. What we find, uh, mostly
10:51is companies don't really understand leadership at the companies don't truly understand what their
10:57teams are actually doing day to day. Cause there's only so much time. Like, let's be honest. Like,
11:02even if you're working 10 hours a day, which is extraordinarily not recommended, but we do
11:07as a company, you can't know what everybody's always doing. But if you had something written
11:14out where this is the stuff that they're doing, it's so easy to spot, like, wait a minute, we got
11:19to fix that. So, um, one of the things I've, I've said recently, I did, I've done these, these time
11:26studies analysis. So I know this is very real, but email, right? Ever use email that like maybe
11:32once or twice a day, um, we've done time studies where it's anywhere from 55 to 65% of people's
11:38day,
11:39where they're literally just staring at their inbox, looking for the next action or that's how
11:43they're working. Uh, even though companies spend a lot of energy and money on trying to, to not have
11:51them do that. And so what we'll do is when we go do this workflow alignment, like I'll just go,
11:56um, I built a platform called workflow coach and it documents all the workflows and you can,
12:00you can search throughout all your workflows, super clean and quick. And I'll just type an email
12:05and it comes up in 80% of their workflows. And I'm like, you want money? Like you want to
12:11find money
12:11in your company? Fix the email problem. Like you don't need AI, just fix your workflow. So I think
12:17that's, um, that's what we find a lot is companies don't really understand what's actually happening
12:23at the detailed level because they either, um, haven't thought that closely about where,
12:31where, uh, opportunities lie, uh, or they thought somebody else was taking care of it,
12:36right? You've got managers, you've got department leaders, whatever they should be doing that.
12:40There, everybody's worried about production in lending. Um, if you go to again, other industries
12:45that are listening, I'm positive, the behaviors are there also. Uh, and it's just, you know,
12:51it's just a different way to manage it. What do you find? So I spent, uh, I spent quite a
12:56bit of time
12:57in instructional design and, uh, and, and working in operations department to define, uh, you know,
13:04define process and procedures, document them, make training for them. And, uh, it's obviously just like
13:12everything, you know, in an organization, it is a leadership issue, right? The, the, the first
13:16thing's kind of from the head down, but you also do find at, at the departmental level, at the
13:20operator level, it's been my experience, at least that, um, so I don't know if you watched, uh,
13:26Game of Thrones or, or not, but there's a great, I love Game of Thrones. Okay. So one of my
13:31favorite,
13:32my favorite quote of the entire series was from Littlefinger. And he says, uh, he says chaos is a
13:38ladder and that, you know, certain people will find a way to maneuver themselves amidst chaos.
13:43It's very beneficial to them because nobody knows what's going on. And so there's self-preservation
13:49and, and, and promotional capabilities that you can thrive with a certain kind of person
13:54can thrive within. And so it's been my experiences that, you know, in a lot of departments where there
13:59is, there's no documentation, it is chaos and it's tribal knowledge that there is, that people,
14:05certain individuals will hoard that they will cling to that tribal knowledge and cling to that chaos
14:11out of, you know, job, job security for themselves. And I'm, I'm curious as to what your experience has
14:17been with that. And if you've seen more of that with the increase in the, not, not even necessarily
14:23adoption, just the, the, the, the, the messaging around and the pressing of AI and the increasing fear
14:31that AI AI is going to take, you know, more and more people's jobs, do you see an increase in
14:36the,
14:36like I said, the, the clinging to that tribal knowledge and the, and the resistance at the
14:41operator level? So, uh, the answer quite quickly, yes. Um, and it becomes obvious when, um, you go through
14:51a, a, a, a workflow interview. So, uh, when somebody decides that they're not going to answer your
15:01questions in detail because they're busy or they don't have time for this, or they've already done
15:09this five times and it doesn't make a difference. They're all red flags. Like I, I, I smell that stuff
15:14a mile away. Um, our company does. And so, um, the person that says, please watch what I do. How
15:22can I
15:22do this better? That's what you want in a company. That's what you need. I couldn't imagine. I mean,
15:29if you use sports for an example, could you imagine a professional athlete saying, no, I'm good.
15:34I don't need any more coaching. Like that's just crazy. Everybody needs coaching. Everybody needs
15:39analysis and understanding how to be better if you really want to be better. But if your goal
15:44is to hide your information so the company needs you, I try to tell people that's the first step
15:51out the door because the company will figure out what you're doing or they'll figure out that they
15:57really don't need you because you obviously don't know what you're doing because you can't explain it.
16:01So we'll find, um, we'll, we'll tell the business what the business should be doing and we'll find
16:07people that support that. So, um, we, we snuff those people out pretty quick.
16:13Um, it doesn't happen often. Nozeb truthfully, uh, the folks that when we, we get involved in,
16:19into an, uh, an engagement, we're very clear on the teams. Like, Hey, we're not here to replace
16:25you quite the opposite. We're here to in, in, in, engage in your company's review so we can empower
16:32you to have a better day. Uh, you know, I, I did, um, a seminar in March with a group
16:38of about 50
16:39people as a private session. And out of the 50, there was like probably 35 different companies.
16:45And out of that, out of that 50 people, I think maybe 14 or some around that were underwriters.
16:51And I said to the underwriters, I said, Hey, underwriters, what's the benefit of us automating
16:55underwriting? And they were like, well, so we can do more loans. And I said, is that really
17:01what's helpful for you? Like, is that really what do you get paid more if you do more loans?
17:06And everybody's like, well, no. And I'm like, all right, well, what if we could
17:10put what's in it for you to be less stress about things going wrong, less responsibility for every
17:17tiny little stupid detail that you stress about today? What if we only focused your work
17:23on the important things that the company really needs your expertise on? And everybody's like,
17:28yeah, that sounds wonderful. That's the kind of thing that we, that we focus on, um, is helping
17:36companies understand that if you do have somebody that's hoarding onto this, like tribal knowledge,
17:42this chaos thing that you're talking about earlier, it's, um, it'll come out. Uh, and it's not unusual
17:49if we do find someone that is a little bit of a, a little bit of a blocker. Um, we'll
17:53just ask for
17:54somebody else. Yeah. Right. Do you see an increase in that though, with the kind of compounded with the,
18:00the fear of, uh, of AI, you know, swooping in and, and, and taking out these jobs or eliminating these
18:06jobs? I don't, I don't, we haven't seen that. Um, what we typically see is folks clamming up because
18:12they think if they tell us what they do, somehow the company will replace them somehow. Um, I think
18:20the, I think the smart ones figure out that that's not what this is. I think the smart ones figure
18:25out
18:25that, Hey, I'm here doing a specific important job for the company. Um, and, uh, I want your help to
18:33have me do this better. Uh, I will say the ones that are paying attention, the folks in, in positions
18:38that are paying attention, if their job is for disclosures or their job is for processing, um,
18:48something that actually is automatable. Yeah. I would be concerned. Like this is just like a call
18:54out. Like there's, there's no secret that, um, the redundant operations within the, in the lending
19:00industry, um, are working towards that automation. Not every company is going to do this. Not every
19:06company is going to feel comfortable. Um, but we, by and large, it's the, the processing teams that
19:12are begging for help, underwriting teams, sales teams, closing, like all of these teams in the
19:18lending industry are just begging for a better day, um, in a, in a better way to do their work.
19:24And so that's, that's kind of what we focus on. I wanted to ask you a very, I mean, I
19:28probably should
19:28ask you this at the beginning of the conversation because it's a, it's such a, uh, uh, an obvious
19:34question, but it ties into an issue that. Is it my haircare routine? Is that what you're
19:39going to ask me about? No, no. And we already covered, we already covered your weightlifting
19:42routine. So we got those out of the way. Um, but it's, it, it ties into what your, your point
19:48earlier about, you know, uh, leadership coming up through, uh, through sales. And I mean, I,
19:54I mean, every, I mean, everybody that I know suffers from imposter syndrome in some form or fashion.
19:59And as you know, and as that's tied into assumed understanding of terms and, and, and assumed,
20:07uh, you know, competency around, uh, you know, key bits of language, workflow governance. Can you
20:12define you? I mean, I, I, I feel that if you ask five different people, 10 different people to define
20:20workflow governance that don't live in this space would probably give you a different definition.
20:25So can you define workflow governance? Yeah. I think if you ask 10 people what
20:29workflow governance is, you get 10, what the hell are you talking about? Um, they, they just don't,
20:34right? It's, it's, um, it's honestly a term that I didn't really understand until I started writing
20:40our, our first book, which is workflow before technology. And my second book, which is workflow
20:44governance. But this, this concept of actually having somebody own their own workflow is
20:52natural for some and just so weird for others. So a good example is, um, when I ask someone like,
21:01Hey, define what you do. Is it the best practice for everybody to do what you do? I think the
21:09answer
21:09you'll get is no, like Sally does it their way. Johnny does it their way. I do it my way
21:14because
21:14we're all different people, but we all get the job done. And I simply ask, well, how do you know
21:19which
21:20one is the best one for the company? Which one is the best one for the overall flow? Um, that's
21:27the
21:27part where most companies fall down. They actually don't know. Um, so we, we did, um, earlier this
21:33year, we moved a very large, uh, you know, multi thousand company, a person company. We moved them to,
21:42um, a web version of encompass. It was a big deal because they had tried to do it for years
21:48before
21:48and it'd always fallen down and timing was right. And what we discovered, um, they're the kind of
21:53companies that allows you to join the company and still retain your own uniqueness, right?
22:00Could you imagine running a company where you've got 200 people that can do anything that they want
22:04as long as they are happy, right? How do you, how do you run that kind of a company? And
22:09what, what,
22:10what we did is mortgage workflow partners. What we did that was very different is we drew a thread
22:15through, through a best practice workflow. We interviewed about 10%. So it was about 20
22:20different branches of this company. And of course they were all different, but what was important
22:25was that we discovered that the branches were doing things they really didn't have to do
22:30because they were used to doing it. That's what they did. So what we, um, how we found success was
22:37to
22:37actually draw up a plan for each of the branches. This is all you need to do branches that we
22:45will
22:45do the rest. This is all we need you to do. If you want to do more, that's on you,
22:50but don't
22:50complain to us about your efficiencies. If you're doing stuff you shouldn't be doing.
22:54So, um, you know, when, when we go through this workflow governance,
22:58the business in that example, the business owned best practice, and they set the standard
23:04of this is what we want you to do to be successful. If you go outside of this,
23:10because you've got some special snowflake reason, that's totally fine. But don't complain to us about
23:16your lack of profitability you're looking for, or your people are stressed out because they
23:21don't have enough time because they have to do all these other things. Uh, that's workflow
23:25governance. And, and so at the core, what I hope people understand is workflow governance is about
23:31identifying the workflow that you're focusing on, who's going to own that. And then how do your
23:38people work towards that? How do they see it? How do they work towards it? This is not about
23:42another training guide. Like you mentioned training earlier. Um, this is not another
23:46training guide or another job aid of what to do if you get stuck. This is how you run your
23:51day.
23:52This is how you move the loan through with as little effort as possible and the maximum
23:59responsibilities completed based upon your job function. Um, there's not a company that doesn't
24:04really want to work that way. It's just been really interestingly not done that way in lending.
24:10And so that's what, that's what I'm, I'm working on. As many times as you've done this with as many
24:16organizations, as you've done this, have you developed a, I guess, I'm curious about the
24:21variance between your workflow, uh, design from one organization to the next. So let's say like,
24:29I don't know how many, you know, there's that you've come in and they wanted to add, I don't know,
24:34like, uh, um, uh, you know, like a one-time close or, or, uh, you know, or 203 K's like,
24:42uh, you know, rehab loans or whatever they, and they want help with, uh, their, you know, improving
24:48their workflows around, let's say, you know, particular product suites or something, just
24:52hypothetically. The, I mean, you just say, you know, you've, you've, you've worked with
24:57so many companies kind of across the board of various sizes. Have you created a, uh, let's say,
25:05uh, a library or, you know, like a library of workflow templates that you can bring into an
25:11organization and kind of, and, and, and map across an organization and then tweak according to the
25:18organization itself where you're kind of starting with a recommended best practice or a recommended
25:23workflow based on what, you know, to be most effective from previous experience or whenever
25:28you go into a company, are you starting not, not from scratch, but starting more from ground zero?
25:34Does that, does that question make sense? Yeah, no, I get it. Uh, we're, we're never starting from
25:39ground zero because mortgage lending is, is the same. It's the same today as it was in 1993,
25:46is the same as it was technically in the eighties. We take an application, we collect documents,
25:52we validate the documents, meet the guidelines. We close the loan and get borrowers money to be
25:57repaid at a future date. That's lending. Like that's as crazy as it sounds. And whether it's a rehab
26:03product or it's a, um, you know, it's a per, it's a, it's an investment property, weird thing,
26:10or it's an LLC deal, or it's a, it's a debt service ratio loan. I don't care. I don't care
26:16what
26:16the product is. Um, the workflow that ties into how that loan moves, um, is generally the same.
26:27So when we go into, whether it's a retail shop or it's a wholesale shop or it's a correspondent
26:33delegated or non-delegated or a fourth party paper shop, the understanding of what's supposed to be
26:40happening is, is, is there. It doesn't really matter who you are or your size or how many people
26:46because each loan is its own entity. How that loan moves depends upon, again, all these parameters
26:53that we're explaining. So we're never starting at zero, but we do get into the intricacies of each
26:59client in terms of what technologies they're using. What is their LOS? How are they getting
27:04the loan? Where do they send the loan? What channel is it? And so we've got a store of, um,
27:12of what we expect to have happened versus what we see is happening. And that's how we develop our
27:18recommendations. Uh, nine times out of 10, it's not terribly, uh, different from where they are,
27:27but it is different. Um, most of what we come up with Zeb is decisions that the business has to
27:33make
27:34in order to move forward. And the problem that companies have mostly is they don't even realize
27:41the questions that they need to be answering. And that's where we actually come in and provide the
27:47most impact. Um, some great examples of it are, you know, why are you, why do you still have a
27:54disclosure desk? I know companies that have, what's interesting is companies that have a
27:59wholesale channel and a retail channel. See if you can put this, see if you can figure this one out
28:04for me. You have, pretend you're a mortgage lender and you've got a retail channel and a wholesale
28:08channel. Okay. Your retail channel, you say you will not automate initial disclosures.
28:15And the reason for that is because you don't trust your loan officers to do the right thing
28:19because they always screw files up. That's a very common phrase, but your wholesale channel,
28:25you allow your brokers to self-disclose because that's what the market demands because UWM did it
28:3010, 12, at this point, probably 13 years ago. And so the same company, the same, effectively the same
28:38file, you trust your TPO lenders to disclose properly at a higher level versus your own internal staff.
28:47Makes no sense. It's just a behavior choice based upon what somebody feels is happening. There's
28:53actually no evidence. There's no, there's no scientific proof behind it. And so, you know,
28:59we, we bring this up and I'm the guy in the back of the room is what I usually say.
29:03I'm the,
29:03I'm the annoying guy back in the room saying, why are you doing it that way? Like, what's the basis
29:08behind that? Give me more information. Like, where are you drawing this decision from?
29:13Um, that's, that's really how these things tend to happen. And, um, as I mentioned earlier,
29:21I built a piece of software called workflow coach and, uh, the problem with workflow documentation
29:28technologies today, uh, is that they're static, right? Whatever that workflow is at the time you
29:35define it is what it was at that moment. How do you actually show everybody in that, in that workflow?
29:43How do you actually show everyone what the workflow is going to look like, whether it's, uh, dynamic
29:50change or subtle change? What if it, you're introducing a new piece of technology, what happens, uh, what
29:57does that workflow look like before you put it into effect? And, and that was, uh, that's another big
30:02missing piece, uh, from folks is, uh, is showing that. And so between asking those questions, um,
30:09and showing them what the workflow could look like, um, it, it really, it doesn't really matter where
30:17those companies are today. We, we can get to a future state proposal that, you know, usually either
30:23meets or exceeds what they thought they could be doing. So what would you say, what are the,
30:29like the symptoms of a company with work? No workflow governance. If, uh, if, you know,
30:33if a, if a leader is listening to this and they want to like, you know, like self-diagnose their
30:37organization, what are the telltale signs that, you know, you're, you're sick and you need your
30:41medicine? Um, well, the first thing is I say to that leader, I say, go open up the diagram of
30:49how,
30:49if we're talking lending, how a loan moves from beginning to end. If you're, if you're not in
30:55lending, whatever industry you're in, it's the same thing. Like we, we have, you know,
30:59my goal is to ultimately help every industry because every industry has workflow. So, you know,
31:05my wife's from the medical industry, you know, when she walks into a room as a nurse,
31:09she's got a process flow that she goes through until that patient is discharged, whatever the,
31:14whatever the situation is for that patient. Um, same thing happens with manufacturing,
31:18same thing happens with, with, with restaurants. It doesn't matter. So, um, a leader knows they
31:24have a workflow governance problem because a, they don't have their workflow documented
31:28within fingers reach B those workflows are not owned by their team members.
31:34They're somehow owned by it or a training team, which is really weird. Um, but very normal.
31:41Um, so those, those are the two easiest things to help with. I say to those leaders,
31:47um, go look at your workflow right now and tell me what happens. Like just read on your screen.
31:54Um, that'll be the first problem that they can't do. The second thing that they can't do is identify
31:59who owns the workflow. They'll tell you who their management team is, but they can't tell you actually
32:04who owns that processing workflow to, to, uh, and ownership means they're reviewing it. They're
32:11maintenancing it and they're making appropriate changes. Um, while they're, you know, throughout
32:16the business. Okay. So, and walk me through, so, you know, there's, there's a, I would assume
32:23there's a whole other side of this relationship, um, or this, the equation, whenever you come into an
32:28organization, because you have to work with, you're working with the technology that they've got,
32:33which I would assume on many occasions being that you're working, I mean, how often are you having
32:38to work with, work with vendors directly? What is it, you know, what's that experience like where you
32:45have, uh, you know, an organization that they've signed a multi-year agreement with, uh, some sort of,
32:52you know, tech provider, software provider that's, that, that doesn't fit, that doesn't fit into a
32:58better, a better workflow? What, what's that, what's that like from, from your end? Uh, sometimes it's
33:05really frustrating. Um, uh, to be honest, like, you know, I have to sit there and I have to explain
33:11to the
33:12leadership, listen, you're in bed with this, with this technology vendor that is stopping you from being
33:18very successful. Um, it doesn't happen often, um, but it does happen. I've got one, I've got three
33:26companies right now that are in the POS space. Now, most of our clients use the Encompass platform by
33:31isomorphic technology. And so I can do a lot of things natively with Encompass. Um, but if you're
33:38using, uh, if you're, if you're not using the native Encompass document portal, there's limitations to
33:47what I can truly automate in terms of workflow. So how do you, so to answer your question, um,
33:51we do our best to understand what those technology providers can do. Uh, it's very normal for us to
33:56partner with those technology providers to understand how the tech is actually designed and how
34:03they feel it should be used properly. And then we align that with clients. Um, we fill this thing I
34:10call threshold problem. And so I write about it in, in, in the book to really explain this thing that
34:15everybody, uh, understands, but probably hasn't really thought about, or at least taken action
34:20to, but it's where as a lender, you know, what you do as a technology provider, you really don't know
34:26what they do. You, you, you're sold what the technology should do, but you, you might not
34:31understand what the tech actually is fully capable of. Um, and then on the other side of that, the
34:38technology provider only knows what their tech does. They really don't have the ability to gain
34:43insights of the full workflow of the company, especially if it's not documented. And so
34:47there's this threshold problem, um, that we fill. And like I said, it's, it's, uh, uh, 90%, I'd say
34:5490% of the time we don't have any issues with doing what we want to recommend the company to
34:59make changes
35:00on. Uh, but we do get into these barriers and we figure out clever ways to do as much as
35:07we can.
35:09And then we say to the client, Hey, listen, why don't we, if it's really important, let's do an
35:14AB test. Let's take a little small section of your business, create a cohort. And that section of
35:21business is going to go this other path. Let's do it. Let's let's, here's the plan. Here's what we're
35:26going to do. Here's how we're going to do it. And let's see the results. And then you can make,
35:30uh, you can use that, that as a basis for future decisions.
35:33So, uh, I wanted to end with, uh, just a couple more questions. And the, the first thing is to
35:39say that there's a, you know, uh, an executive or leader that's listening to this conversation
35:44and they recognize problems that in their own organization that you've kind of outlined here,
35:52what should they do in the next, I don't know, 15, 30, 45 days before they even reach out to,
35:59if they were going to reach out to you, is there any sort of like, you know, uh,
36:02preparation that they should be doing any house cleaning before an initial consultation? What,
36:07what are the first steps that someone would take?
36:09Uh, go to Amazon and get workflow governance. Um, read the book. Like I'm, I'm, I know it's
36:16self-promotion, but it's important. Um, the problem, the problem with most leaders is there's a sense
36:22that they should be working better. Um, and there's a lack of context of how to do that. Uh, you
36:29know,
36:29we've been talking about it now during this, this, this interview and you can't, you can't imagine a
36:35better way to do things on your own. Like there's, this is, this is not an inception, right? It's,
36:40you should not wake up from a dream and go, Oh, I should be doing that. Um, and it's, and
36:44you can't
36:44follow your peers on this problem because nobody else is doing it in, in an obvious way. Uh, so
36:53the, the two things I would always encourage leaders to understand is a, you, you've got to
36:58be able to understand what your people are physically doing. Forget about your training
37:03guides, forget about your SOPs, forget about what you think is happening. Um, you've got to be able to
37:08have people document what they're doing. And so that's part of what we built workflow coach
37:13to do is to allow this capability to self document and do it at scale for the entire organization.
37:20And so if you just walk yourself through what you're doing and you have everybody in your company
37:27do that, you can use the software to actually build the workflow steps and use the AI engine that's built
37:34into it that understands what is supposed to be happening for your industry specifically,
37:38in this case mortgage. Um, and then spell, and then have that list out your workflow steps and
37:43then look for ways to change. That's the number one things that like, if I could, if I could, uh,
37:49you
37:49know, if I went to MBA annual this year and I said, Hey, how's your workflow governance doing? They're
37:54going to be like, what? Um, and so my, my, my call out is make this as high of a
38:00priority as the next
38:02big AI or the next big tech thing. You got to document your workflows. You've got to make sure
38:08you establish governance. Um, otherwise you're going to not do anything different next year versus
38:14five years ago, even though you have different tech and different goals.
38:18Well, that, that leads into the last question I wanted to ask you was,
38:21you know, looking down the road, like five years from now, with what you're, with what you're seeing,
38:25the people that you're talking to in the business that you're, uh, getting, do you see people,
38:31um, uh, you know, adopting or being more open to, you know, what the, the, the, and understanding
38:38the importance of workflow governance and, and embracing this as a way of modernizing and, and
38:45moving forward, uh, because you definitely, on the, like you were talking about earlier,
38:49you definitely see that on the AI side, or do you see people kind of confusing and continuing to confuse
38:55what you're talking about with AI as a possible solution?
39:00I, I, uh, I never know if I'm living in an echo chamber, right? I never know if, if the
39:06algorithms
39:06are feeding me conversations about workflow because I talk about workflow all day. Um, but what I can
39:12tell you is that when I start to see other service-based organizations emphasizing workflow
39:19evaluation and workflow, they don't use the word term, they don't use the term governance,
39:24but they use like, they use like making sure that, you know, use our technology to help you with your
39:31workflows. They're kind of getting at the issue without really just talking about it directly.
39:35So I do think organizations are truly understanding now, um, after the last seven years of, of tech spend,
39:43right? Looking at the MBA financials to say it still costs 12 ish thousand dollars to produce a loan.
39:51Like what, what point do you think technology is going to solve that number? Uh, and the answer is
39:58never technology is never going to solve that number because the workflow that you're using in your,
40:04in your business is never going to allow you to not spend that much money. Uh, a quick anecdote,
40:11as a client we're helping right now, they have nine people per loan touching that file, three of which
40:20we know we don't need, but are they going to do something about it? I don't know. I don't know,
40:26but we can guide them. These are the people that, these are the, the, the positions that no longer need
40:32a human to do the work that the human is doing without interrupting the quality of the loan file.
40:38Should those people be doing something else? Yes. They're very talented people. You don't have to
40:42let them go, but get them into a place where they can actually contribute positively towards that
40:47businesses profitability, not in the mindless tasks that they're doing repetitively on every
40:54file that can be done in different ways. Um, so, uh, I think businesses are starting to,
41:00leadership specifically starting to understand that you just can't keep throwing tech.
41:06And I want to bring you back. I don't know if you're old enough to remember these days,
41:10but back in, in 2006, 2007, when the answer was throw more bodies, right? We had a huge,
41:18we had a huge spike in production. And the answer at the time was more bodies, more bodies, more bodies,
41:24eight hits, everything crashes. And so since then we've been building up and what did we have
41:29happened in, in 18 to 21, more bodies, more bodies, more bodies crash hits. All of a sudden,
41:35everybody gets fired. Nobody wants to keep repeating that. And so now the idea is we'll
41:40just keep throwing tech at it. It was wrong back in those two cycles. It's wrong in the future. So
41:46my
41:46hope is in the next five years, companies have their workflows documented. They have a true workflow
41:51governance spelled out in writing. And so when the business says, Hey, we're thinking about doing
41:57this next thing, what workflows are going to be affected? Those workflow governance owners can say,
42:04Hey, this would help me here, or, Hey, that would hurt me there. That's true workflow governance. And
42:21this has been fantastic. And, uh, good luck with your, your hair care. Okay. If you ever need any tips,
42:26you just let me know. Much appreciated. I'll talk to you soon. We'll see.
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