One of the key factors that came up in determining whether a company succeeds or fails is effective management. If the company is not being deliberately steered in the right direction by managers who know what they're doing and are deliberately taking actions that lead to success, the company is at the mercy of the market.
A story that I like to tell often is the story of the guy that takes his car to a mechanic when it breaks down. The mechanic listens to the sound the car's making; then, he opens the hood, takes a screw, and screws it in to a certain spot. He then turns to the man and says,
"That'll be $500."
"$500!" exclaims the man. "All you did was tighten a screw!"
The mechanic thinks about it for a second and replies, "You're right. It's $5 for the screw, and $495 for knowing that the screw would solve the problem."
Effective management means know how to solve the problems. It means knowing where the screws go to make the vehicle start working again. The companies who succeed will be those who are driven by managers who know what they're doing.
David Lykken is 40-year industry veteran who has been an owner operator of three mortgage banking companies and a software company. As co-founder and Managing Partner of Mortgage Banking Solutions, David consults on virtually all aspects of mortgage banking with special emphasis executive leadership development, corporate strategic direction and implementation as well as mergers & acquisitions. A regular contributor on CNBC and Fox Business News, David also hosts a successful weekly radio program called “Lykken On Lending” (www.LykkenOnLending.com) that is heard each Monday at noon (Central Standard Time) by thousands of mortgage professionals. Recently he started producing a 1-minute video called “Today’s Mortgage Minute” that appears on hundreds of television, radio and newspaper websites daily across America.
Last week on my radio show, we had a discussion about why some companies succeed and why some companies fail. It's a popular question addressed in many business books of our day, and for good reason. In a sense, it's the only question that matters. What can give us that competitive edge that ensures survival in a crowded marketplace? That's what we're all asking ourselves.