Dot Connector Blog

Need to lead in a new direction?  Try these ideas from Jay Farner. (source: Carl Chapman / CC 2.0)

Recently, I sat down with Jay Farner, CEO of reverse mortgage lender, One Reverse Mortgage and advisor to the Rockbridge Growth Equity family of companies.  Prior to his current role, Jay was the head of Web Mortgage Banking at Quicken Loans, where he helped grow Quicken Loans into the nation’s largest online retail lender, sixth largest FHA lender and one of the five largest retail lenders in the country.  Jay did this with a team of over 2,200 mortgage bankers located in 5 different offices around the country.

In this interview, you’ll learn how Jay Farner prioritizes his time, who has had the biggest influence on him, what he teaches new companies, and much more!

How do you determine what to focus on every day?

Jay Farner: It starts by recognizing what’s urgent and what’s important.  I manage my time religiously with my Outlook calendar, and combine both work and personal onto one calendar to make it that much easier.  To make sure I focus on the important, but not necessarily urgent things, I block off 2 to 3 hours of time, 2 days per week.  I guard this time and do not schedule other things over it.  This allows me to move forward on those initiatives that are outside of the normal day-to-day, while still giving me enough time to focus on all of the issues that do come up daily.

What makes a leader?  What do you look for in new leaders?

Jay Farner: There are several traits that comprise a good leader.  First off, they have to be a positive thinker.  Someone who has a negative view of the world will have a very hard time leading others.  Beyond that, they must have a high energy level, be enthusiastic, and believe in themselves.  I really think that you need all of those things to be able to create a positive vision that inspires others to follow you.

Of course, once you can create a vision – paint a clear picture of where to go – you need to be able to take action and execute.  And, once you are in execution mode, you need to be open to constant feedback and focus on continuous learning.

Are there two or three people you “role model” or work with who have consistently challenged you and your thinking?

Jay Farner: For me, the person who taught me how to treat people, deal with tough situations, stay calm, and stay positive is my Dad.

Another person who has had a substantial  role in my development has been Dan G [Dan Gilbert, Chairman of Quicken Loans, Owner of the Cleveland Caveliers and founding Partner at RockBridge Growth Equity].  Dan has taught me how to:

• Think deeply about issues (never staying “at the surface” of a discussion)
• Always ask the right questions to the right people
• Challenge myself to always be better by asking two simple questions: What’s next? and What should we do?
  

What are the top client service lessons you have learned over the course of your career?

Jay Farner: I think it all starts with a quote Steven Luigi [Piazza, VP at Quicken Loans] always says: “people don’t care how much you know, until they know how much you care.”

Using that as the basis for Client Service is key.  Beyond that, I believe it’s about:

1. Asking really good questions
2. Demonstrating you can find the right solutions
3. Adjusting your approach to your Clients’ best way of learning
4. Being open minded to possibilities
5. Being insanely responsive to your Clients’ needs

What is the biggest lesson you’ve learned that you try to teach all young companies you work with?

Jay Farner: To focus on taking your dream and turning it into a reality.  It basically all boils down to focus: finding those Top 3 things you need to do in the business, and then applying the following formula to them:

1. Develop the strategies that will help you hit your top 3 goals/priorities
2. Develop the tactics that will support those strategies
3. Develop ways to measure your progress, and measure/adjust like crazy

Working with people is so critical, and so magnified, when you are a small organization. So, beyond the 3 step process above, it really comes down to finding the best people for the organization, and ensuring that everyone works extremely well together.

You’ve led very large groups of people.  How do you inspire people you lead to work on the right things every day, and how do you measure success?

Jay Farner: Constant communication is key, especially in writing.  This is true for sales people, but it’s also important for everyone else.  The idea of writing down what you want to communicate can be very powerful.  Writing forces you to think about what you are saying and the impact it can have.

Once you have communicated the direction you want the team to go, it’s about the old Ronald Reagan “trust but verify” approach.  You have to trust that your leaders are going to communicate and execute the direction.  But, there is nothing stopping you from what is often called “management by walking around” – essentially walking around the office(s) and asking others what they know about the new direction.  “Have you attended any training on X?”  “What do you think about Y?” – you get the idea.

It’s also critically important as a leader to choose which new initiatives you want to roll out.  You don’t want to roll out things too frequently and cause confusion or lack of implementation.  It’s a fine line and takes a huge amount of trust in your leaders to help you execute.

Note from Regis: I hope you’ve enjoyed these insights from Jay Farner.  If you have, please leave a comment!

As many of you know, I work for Quicken Loans, one of the top 10 home mortgage lenders in the United States, the #1 online lender of home mortgages in the US, and Fortune Magazine’s #2 best place to work in the US (Google is #1).

Many of you have asked for my opinion about the mortgage crisis, what got us here, and what can be done.  Today, I’ll share a drastically simplified version of the comprehensive solution, called “A Solution That Works” that was put forward last week by Dan Gilbert, Chairman of Quicken Loans.

You really don’t need to be a rocket scientist to understand the housing crisis, or the solution to it, no matter what anyone tells you.  It will take the right leadership to get us out of the challenging situation we are in.  And, just like in almost every leadership challenge, you can’t let how hard you think the solution is prevent you from doing it.

On to the plan…

The Situation Right NOW

• Homeowners today are “striking out” by having a declining home value (strike 1), an unpredictable and growing monthly mortgage payment (strike 2), a growing mortgage balance that they owe the bank (strike 3). Often when this strike out happens, a Homeowner cannot make their payments, or chooses not to, resulting in foreclosure.
• Unfortunately, the $700 billion financial rescue plan passed by Congress last week does little if anything to address these Homeowner issues (stopping foreclosures, declining home values, and dramatic increases in mortgage payments).  These issues are the fundamental reason why the “credit markets” you hear about on the nightly news are in crisis.
• The goal of “A Solution That Works” is to help each American Homeowner stay in their home, prevent their home’s value from declining, change their bad mortgage to a good mortgage, and prevent foreclosure.

A Solution That Works, a Simplified Version of the Plan

1. The Homeowner would work through a Lender to have their bad mortgage changed to a new, 30-year fixed rate mortgage.
2. This new mortgage would have an interest rate of 6.375% fixed for the life of the loan, but would also have a low interest rate (starting at 4.875%) for the first 5 years, to give the homeowner some relief and allow them to “dig out” of their mortgage situation.
3. If the Homeowner owes more than the original loan amount (due to not paying enough interest or any principal, like if they are in an “Option ARM”), the Lender will essentially cover the difference.

A Solution That Works, an Example

The Smith family purchased a home in 2006 and got an adjustable rate mortgage (ARM).  In October, their interest rate adjusted from 6.5% to 9%.  As you can see below, their payment jumped as well:

With A Solution That Works, the Smith’s family’s mortgage payment is reduced to $1,064 initially, and gradually increases over 5 years to approx. $1,250 and WILL NOT change for the remaining 25 years of the loan.

My Thoughts

Personally, I believe that a combination of greed (from Homeowners, Banks, and Financial Institutions), irrational expectations about home values, and a lack of Federal oversight lead to the housing crisis we are in right now.

To get out of this, we have to treat the cause of the disease, not merely it’s symptoms.  I believe “A Solution That Works” would do that.  Here’s why:

1. This plan puts the Homeowner first, helping them to get out of the bad mortgage they are in.  The result is reduced foreclosures and more stable property values.
2. This plan can quickly create a win-win for Homeowners (who get a new, better loan) and Lenders (who get support from the government).
3. This plan is an efficient and practical use of Federal dollars, especially since a lack of government oversight was a major contributor to the situation we are in now.  In this plan, the Federal government would pay the difference between the 4.875% rate and the 6.375% rate for those first five years.  Also, this plan would allow lenders to write off 2x the interest the Homeowner did not pay that was previously added to their loan amount.
4. The cost of this plan would be $50 billion, roughly 1/14 the cost of the $700 billion financial rescue plan passed by Congress last week.  And, it also eliminates the need for a new bureaucracy outlined in the bailout bill to buy bad mortgages.
5. Finally, this plan also gives the investor in these loans higher odds of recovering their investment (versus dealing with foreclosure) by immediately stabilizing the housing market.

Now, before you think: “isn’t Quicken Loans one of the reasons we are in this situation?” Please consider that although Quicken Loans did offer some versions of these loans, we never made these products our “bread and butter” and we never did any significant subprime mortgage business.  Our overall business has always been in standard, “conforming” loans.  Also, please feel free to read Quicken Loans Reviews to learn about our excellent customer service.

I encourage everyone to read the plan for yourself and comment here to let Dot Connector readers know what you think!

More information

• A Solution The Works Website
• A Solution That Works: Frequently Asked Questions
• Watch Dan Gilbert discuss his plan on CNBC
• Detroit Free Press coverage of the plan

What you can do

• Find your Congressional Representative
• Find your U.S. Senator
• Contact the President and White House
• Contact Henry Paulson, The US Secretary of the Treasury.
• Contact Your State Governor
• Contact Your State Representative
• Contact Presidential Candidate Barack Obama
• Contact Presidential Candidate John McCain

UPDATE: A great overview of the current financial situation, in extremely clear terms:

[youtube=http://www.youtube.com/watch?v=h4Ns4ltUvfw]

Note from Regis: This is the first post in Dot Connector’s Leadership Skills series. My goal is to bring you people who exemplify leadership styles and leadership skills needed for success.

Today’s interview is with Todd Albery, Creator of Webolutions at Quicken Loans. Todd is the guy who gets the huge, impossible projects — the ones that make you simply go “no way.” And, through his amazing perseverance, he finds a way to get them done.

In this interview, you’ll hear Todd’s thoughts on perseverance, and how you can use this essential leadership skill to launch memorable projects.

Regis: Can you give an example of a time when you had to exert a lot of perseverance?

Todd: For the past two years I’ve led a project at Quicken Loans called Quizzle. It has been an extremely exciting project – built to be a game-changer in our industry and on the web! However, like any good project, it had its share of challenges.

In the course of development…

• We lost important pieces of our development team;
• We changed the technology platform on which Quizzle was built;
• We wrote way-too-extensive “specification documents”;
• We tinkered with marketing stuff too much (Yep, I’m the marketing guy);
• We encountered some ‘late-game’ business obstacles.

With this project, we were continuously breaking new ground. We were taking a road less traveled. Sometimes there was no road. Sometimes it was dirt. Rarely were the signs clearly marked. And more than a few times, the destination changed. The project took longer than we hoped. But in the end we persevered. We ended up in a great place. And we got there because we all laced up our boots and took the journey TOGETHER, AS A TEAM!

Regis: As a leader, how do you stay motivated when a project is taking a long time (i.e. when you personally have to really persevere)?

Todd: In a long-term project it’s important to break the project up into smaller pieces so you can focus on the “Little WINS.” It’s tough sometimes when there’s no immediate end in sight, but that’s why you’ve got to take the time to IDENTIFY milestones and CELEBRATE with the team each step of the way.

Personally and professionally, my motivation and energy come from relationships. I stay motivated by building a strong tight-knit TEAM aligned with a BELIEF in a VISION and armed with a POSITIVE (can-do) ATTITUDE. Truly aligned team member will motivate each other daily.

Regis: As a leader, how do you keep others around you motivated when a project is taking a long time (i.e. when your team really has to persevere)?

Todd: There are a few things that I believe are essential to keeping a team together and motivated during a long project:

1. Build relationships: You’ve got to get to know your project team like a family.

• Get out of the office together and do things that are 100% NOT work-related. Get to know your teammates in a fun pressure-free environment. Build real relationships and memories that have nothing to do with your work project.
• Once you develop those critical personal relationships, you’ll begin to understand what makes your team members tick. You’ll learn a person’s inner passion. Then you’ll know when and where to let someone take the ball and run and they’ll create things you never dreamed possible.
• Relationships develop TRUST. Team trust is something that is critical throughout a long project. Then when tough and controversial decisions are made, you will benefit greatly from a team that trusts you and each other.

2. Create a true team: You need to create a team environment to persevere.

• Create a team that works TOGETHER towards a common goal. Create a team that is focused on doing what’s best for the business. Create a team that believes in doing the right thing and making decisions becomes much easier.
• Keep an eye out for team members who are “me focused.” If you’ve got a cancer in the “locker room,” you’ve got to deal with it. It’s best to confront a problem head-on and sooner is better than later.
• Speaking “The TRUTH in love”: be honest and kind; most people appreciate honesty when it’s delivered in a constructive manner (“in love” – for the betterment of the team). Don’t fall into the trap of believing that confrontation is bad, because it’s not. Confrontation is not only critical to moving a project forward, but it will often lead to breakthrough moments for a team.

Note from Regis: I agree that confrontation is critical to resolving issues. To be blunt, I often tell my team that if you’re not pissing people off, you’re not doing work that matters.

3. Involve your team in the vision: You must COMMUNICATE the vision with your team on a regular basis. And it’s even more important (if you can do it) to INVOLVE your team in the creation of that vision.

• Don’t be afraid to discuss business dilemmas, decisions, hurdles and challenges with your team.
• First of all, it’s always good to get out of your own shoes and get other people’s thoughts and ideas; and secondly, you’ll begin creating team ownership in the project. A project should never be just one person’s project – it should be a team project.
• Secondly, by involving the team, you automatically break down the natural blame barriers that too often plague a project and instead, you develop a truly SHARED VISION.

4. Laugh a lot: You’ve got to bring a sense of humor with you to work everyday.

• The day you lose the laughter is the day you’ll lose the ability to motivate a team long-term.
• Take your work seriously, but never take yourself too seriously.
• The trick is to keep the team focused on the task at hand, but have fun while you do it! You’ll be surprised how far daily laughter will go in keeping spirits high and the team motivated. There’s a time to strap on the helmet and get stuff done, but it can’t be all day everyday. Life’s too short to be serious all the time.

Honest disclaimer: We had a couple of added motivational benefits on the Quizzle project.

• We had the luxury of working closely with Dan Gilbert, a genius-minded business entrepreneur, who shared his vision with us throughout the project and allowed us to go BLUE SKY and DREAM BIG on this project.
• We had a group of folks on the team who believed strongly that Quizzle had the potential to be a real game-changer someday on the Internet!

Unfortunately, we don’t get these benefits on every project, but a great leader can instill belief in a vision, tap into inner passions and allow a team to dream big.

Regis: How does someone learn to persevere?

Todd: For me perseverance was ingrained since I was a kid. My parents instilled the value of never quitting, and giving things my very best shot. I was taught to look on the positive side; find the good in situations rather than dwell on the bad. I was taught to view problems as challenges. I was taught to recognize challenges as opportunities. And opportunities will often times lead to success.

When challenges are the hardest, don’t be afraid. Instead, get excited, because you have the opportunity to find creative, game-changing solutions. There’s a quote from a marketing book called “Juicing the Orange” that went something like this: “Creativity is the most economical form of competitive advantage.” Creativity can be cheap; it can also pull you out of a commodity box and can differentiate you from the rest.

Personally, I love sports. I love playing games. So when a day at work provides a good challenge, it’s like a game, a competition, and my juices start flowing. And at the end of this challenge (just like a game) you either win or lose, right? That’s exciting. So go ahead, play games at work. Embrace your challenges. Play to WIN. And with this approach, more often than not, you will… persevere.

Regis: Do you have any great quotes, books, etc. about perseverance you’d recommend?

Todd: Read any book about a company that made it big and you’ll find that there were many roadblocks along the way, challenges to overcome, and days when the future looked bleak.

A couple of my favorites are “The Google Story” and “Pour Your Heart Into it: How Starbucks Built a Company One Cup at a Time.” It wasn’t always easy, but in the end it was worth it. “The Experience Economy” is another one of my favorites. In this book you’ll also learn about the importance of creating a great experience for your clients. You’ll learn to be bold and try new things. You can’t be afraid to fail. Through failing and overcoming challenges you gain experience and wisdom.

I love A&E biographies. Listen to or read the biography of any great man or woman and you will find stories of hardship and perseverance that not only shaped their character but made them stronger.

I think a hero is an ordinary individual who finds strength to persevere and endure in spite of overwhelming obstacles.
-Christopher Reeve

Note from Regis: We can all learn a lot from Todd, and the ideas he talks about in this interview. Stay tuned for more in our Leadership Training Boot Camp series!

How important is mental focus? It’s simply the number-one key to becoming legendary at what you do.

We have a saying at Quicken Loans: “what you focus on, you find.” Oprah and followers of the book The Secret – say that “like attracts like.”

However you choose to say it, the power of focus is what separates those who are good from those who are great.

However, your daily life can easily compromise your ability to focus. Let’s take a look at a recent day in my professional life as an example:

• 623 emails across 4 email accounts
• 23 social media requests, messages, etc.
• 13 incoming phone calls, and 9 voicemail messages
• 2 conference calls and 3 one-on-one meetings
• 1 presentation to some of my Clients
• 1 contract negotiation

How do I maintain focus when I have all of these things challenging it? Of course, I stay organized with to do lists, manage my voicemail, and keep my email management system in top shape. But, as I tell people all the time, you’ll always have 100 things on your plate, but are you doing the right things?

Patrick Rhone has written about his Today Card. The Today Card is a note card he keeps with 3 simple things he would like to accomplish that day. Patrick’s post inspired me to go back to a similar tradition I used to keep, specifically using a Top 3 list to help me focus.

I’ve re-adopted and improved on my old Top 3 list technique. It’s insanely simple, and has increased my ability to focus exponentially.

Here’s my secret to using a Top 3 list to achieve mental focus every day:

1. For 5 minutes right now, think about what you really need to focus on. This should be time where you focus only on important things that will move your project, career, etc. forward. Mentally ban thoughts about an email you have to respond to, a person you have to call, etc. Use this time to deliberately force yourself to mentally focus on what you need to do.

2. Write down the Top 3 things you need to focus on. I like to write this list down in my moleskine notebook, but you might prefer a sticky note, or a note card, like Patrick. Your goal is to use this Top 3 list to guide what you do tomorrow.

3. Tomorrow morning, do one thing from your Top 3 list before you open your email. I am TOTALLY SERIOUS about this. Email is a gigantic distractor and priority-changer. Do not let it prevent you from maintaining focus. By doing at least one thing on your list before opening your email, you set yourself up for a successful day.

4. At the end of the day, check your Top 3 list, cross off what you’ve accomplished, and write your list for tomorrow. It’s CRITICAL that you write your list for tomorrow at the end of the day today. At the end of the day, you still have the day fresh in your mind. Also, by doing this, you’re not spending time tomorrow morning figuring out what to do.

That’s it – the secret to mental focus is the Top 3 list! If you really use this technique (including #3 and #4 above), you’ll be amazed at the mental focus and clarity you have.

To quote another saying (from Dan Gilbert, Chairman and Founder of Quicken Loans), “nothing clarifies like clarity!” Good luck!