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Consolidation and cultural alignment: the sector’s next challenge – Bohanna

by: Juliett Bohanna, executive, systemic team, and transformation coach; director - organisational development at ONE Xec
  • 05/02/2024
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A boom of origination hit the mortgage industry during the pandemic.

Times of strife can be great incubators for the new kids on the block, and a host of businesses, new and old right across the spectrum of lending, brokers, and servicers, flourished. With this success followed consolidation; the last two years have seen many merger and acquisition (M&A) deals struck across the sector. 

Mortgage industry stalwarts will be very familiar with change. Artificial intelligence (AI) has been harnessed to automate credit checks and value properties, regulation remains a hot topic and one to watch as we enter an election year. 

But it is these mergers, the potential culture clashes that will rumble on and cause leaders the biggest headaches if they get consolidation wrong. And it looks as though it’s here to stay, particularly for the so-called ‘cottage industry’ brokerages. 


Creating harmony 

Cultural alignment is often spoken about in the context of M&A – when two worlds collide. An enormous effort is put into getting the comms right when the merger happens, appeasing shareholders, undertaking Transfer of Undertakings (Protection of Employment) (TUPE) and other HR processes to ensure a smooth transition. 

Company-wide welcome speeches from the CEO are given, setting out the vision for an exciting new era, but it’s rare for any further steps to be taken to integrate two disparate parties save for perhaps an away day or all-staff event. 

The message is clear – just get on with it. But this attitude breeds contempt, and any hard-won trust can evaporate rapidly. 


A thought-out process 

So, what is cultural alignment? And how do you get it right? 

Very simply, it’s having the right people, doing the right thing, at the right time. Being culturally aligned is an evolving process that must be baked into any business strategy. In fact, your strategy is essentially redundant if your culture is broken. 

A report from Gartner in 2018 found that when everyone is aligned, there is a nine per cent improvement in revenue goals, and a 22 per cent increase in employee performance.  

Supporting and guiding staff is key in uncertain times; while you can’t control external factors such as interest rates and the cost of living crisis, you can make an effort to shape your culture so that you can weather the storm. 

Be realistic about what your goals are and how you want to achieve them. Be intentional about what your priorities need to be and then relentlessly focus with a solid change growth strategy. Measure it regularly to track and adjust.  

What are your values? Hire people who embody the qualities and ethos you want for your business, and shout about who you are so you can attract the best team. Have certainty about what your purpose is, and indeed any red lines, so that you can make really clear decisions. 

Keep measuring your culture – feed and nurture it. Be flexible and adapt and listen actively to what your team tells you, and invest in good training and management. 

Change is afoot for everyone involved in mortgages – but it is possible to positively shape the outcome. 

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