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What It Takes to Drive Adoption at Legacy Organizations

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By Moshe Abudarham

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In a recent States Title Ask the Expert webinar, Silicon Valley tech pioneer, Karen Richardson, provided some incredible insights into How to drive innovation in a crisis – both in uncertain times and for innovative products and solutions that are up against the prevailing status quo. She also spoke about how to drive adoption, which is necessary to bring any innovation to life.

When considering some of the innovations that took the U.S. or even the world by storm – cc:Mail, Netscape, Amazon – Karen explains how a bold vision is central to creating a product or solution that is worthy of being adopted by the rest of the adoption curve.

“I think if you don’t start with a bold vision for ultimately what you’re trying to create, you won’t create a company. You’ll create a product or a fraction of a product. And it may be interesting and it may be novel and you may get a few people to buy it, but you won’t end up with a company in a decade… And if you look at the successful technology and service – not just technology companies – but service businesses, you know, they maybe start out doing X, but a decade and two and three later, look at all the things that they’re doing. You know, Amazon started as a bookseller, lookat what it is now. And that’s because it had a bold vision of who it thought it could become.”

Attracting early adopters

As a start up with just such a bold vision that has raised $230 million within three years from legacy industry legends such as Lennar and 10-steps-ahead investors such as Fifth Wall, States Title understands how hard it is to find early adopters in both the investor and lender communities – each legacy-leaning in their own way – and exactly how valuable it was once we did.

Perhaps Karen put it best during her webinar conversation with our CEO, Max Simkoff:

“Even if everybody wants to be an early adopter, let’s just take our industry, our customers, mortgage lenders. I think if you went into any mortgage lender, they would not tell you that they want to be a laggard and have old technology and frustrate and annoy the customer and make it all manual. None of them would say that. They would all say: ‘Of course, we want to surprise and delight the customer.’ ‘We’d like escrow to be easier.’ ‘We’d like closing to be easier.’”

And there’s the rub.

Because an innovative company like States Title can’t evolve MI-driven solutions, and we really can’t realize process efficiencies at established lending institutions that ‘kinda, maybe, sorta, wanna’ acknowledge and commit to making the changes they need to. We need early adopters. It takes bank and nonbank lenders with brave leadership… and an undaunted champion of change, willing to persevere to make adoption happen.

Meet Jim and Jay

What made Jim Coffrini – President and CEO of a 48-state lender that just celebrated its 30th anniversary a year before – choose to prioritize future proofing the company over business as usual?

“Jim knows residential real estate and practically every segment in the industry are in the process of digital disruption,” said Jay Promisco, Chief Production Officer at Sierra Pacific. “And although I was fortunate to join a highly competent team with a national footprint, we needed everything to be buttoned up to maintain and grow our competitive advantage.”

And what made Jay the right person to restructure and future proof Sierra Pacific?

Jay started his career in banking at Dean Witter and went on to join eTrade Financial and Barclays Global Investors before switching to mortgage financing in 2003. Having learned the ropes at GreenPoint Mortgage and Wells Fargo, Jay joined Stearns Lending where he rose through the ranks to Executive Vice President of Joint Ventures. Jay capped off 10 years with the successful sale of Stearns Lending to Blackstone, the world’s largest alternative investment firm.

“A decade in banking teaches you how to optimize the numbers, and a decade in retail lending teaches you how to optimize the offering. What I learned in both is how to restructure systems and procedures to ensure our people are free to focus on the customer and elevate the experience.”

Now that’s an innovator’s mindset!

Focus, dedication, and commitment to one industry, followed by the same approach in another – and then being able to synthesize the learnings of each set of experiences to apply it to the sort of Sisyphean task Jim, an early adopter, had in mind.

Notably, Jay’s objective in restructuring systems and adopting bleeding edge tech is “to ensure our people are free to focus on the customer and elevate the experience” – helping professionals to do their job and always considering the customer experience.

Making adoption happen

As mentioned above, driving innovation and adoption is never free of significant challenges, and Jay faced three that most lending executives can easily empathize with:

  • a modern consumer that has become accustomed to a convenient service at the speed of Amazon, instant credit approvals, and an abundance of online comparison sites
  • the saturation of the mortgage industry with barely differentiated offerings, which impacts costs and margins
  • legacy practices, procedures, people, and politics, and a threadbare landscape of resale and refinance solutions

The final challenge is where Jay had to consider how to not only get adoption right, but to also make it happen:

“Our business is relationship-based and it takes time to trust a new solution the way you trust a vendor you’ve worked with for years,” said Jay. “To begin with, when we rolled the States Title solution out to a number of team members, they waited for the next order but then would go to their usual vendor. Frankly, they didn’t believe underwriting could be instant – especially at the lower price point – and old habits are hard to break.”

That all changed when Jay instituted a mandatory 60-day trial period with a select group of mortgage brokers. Jay understood that each team member needed to experience their first successful order to break those old habits and see it for themselves.

“I would get feedback like: ‘We were immediately clear to close – it was fairly magical.’ Soon the feedback loop extended to our customers and we had broken free from the status quo,” Jay explained.

But selecting a specific group of brokers or loan processors and getting them to see the value is just one part of a successful adoption pilot. In order to accelerate the adoption of game-changing tech at a legacy organization, there are three further best practices to consider:

Know and share your benchmarks

Tech adoption is innately a test environment – there simply aren’t enough businesses using the technology to find a near-match (let alone an exact-match) use case to know exactly what to expect. It is therefore impossible to accurately assess the value of adoption without benchmarks to track against. Review your current averages and recent monthly metrics so you can track – and your people can see – the adopted tech’s impact on CSAT scores, time to close, costs and fees, and how many applications result in a completed loan.

Define processes and parameters

States Title is unwavering in its commitment to work with our customers to optimize their closing processes. We don’t expect lenders to roll out our MI-driven closing solutions wholesale across the organization at once – most customers start with a percentage of order volume in a handful of carefully selected states. Change can be hard, which is why it is also vital to:

  • explain the value of and necessity for change
  • clearly define new processes or ways of working
  • properly train people on any new technology

Track, report, and discuss results

We saw above how – having selected the right group of people for the pilot – each team member needed to experience their first successful order. Whereas that is essential to catalyze adoption, it is even more important to track, report, and discuss results as a team to maintain that enthusiasm. That way, not only can brokers and loan officers imagine how much easier every transaction could be, they can also see how the cumulative effect allows the lender to provide a delightful experience for every customer.

To learn more about what it takes to drive adoption as a mortgage lender from one our favorite champions of change, watch our Ask the Expert (in a crisis) webinar to hear Jay and Max discuss: How to close a loan in 7 days.