Pipeline Management: Behavior > Results

Mitch: Welcome back to Lending Made Easy. Today, we're going to jump into an important topic in commercial lending, pipeline management. With the softened demand for loans, effective pipeline management can really be a game changer and staying competitive in the market. So Bryan, what are some key areas that commercial lenders can focus on for more effective pipeline management?

Bryan: First and foremost, I would tell people to shift away from pure results focus to behavior focus. And it's a big thing I preach in, in leading a sales team is the wins and the losses are going to happen. And far too often, we tend to look at the macro. We look at what are the deals out there? What are the forecasts?

Dates. What are the stages? How does that mathematically get to an expected dollar amount? That's going to happen. What's my win rate. So I'm going to take a portion of that without stopping to understand what's happening day to day, week to week, month to month that has those opportunities in the pipeline to begin with.

And it's a shift in thinking it's a shift in how you manage the people, especially within financial institutions where the commercial lenders are the rock stars, they're the ones that. Drive the profitability of the bank in most financial institutions. That money made from loans is a lifeblood of financial institutions.

The lenders that are bringing it in are lauded, right? And you have that legacy behavior of who cares that it. It cost me three trips to the Winged Foot Country Club with their entire C suite to get the loan across the board. I got the loan, didn't I? Right? We won the business. And that may well be a great strategy.

That may have been what was necessary to win the deal. But without focusing on the actual behaviors that got you there. Leaves you kind of exposed to, am I winning the right business? Am I winning profitable business, right? Is, are my cost of sales too high? So what does that kind of then lead to one?

You're not going to be able to do that in Excel or, you know, some other manual pipeline type concept. You need technology to help you to build in the right level of data entry, the right level of automation, the right level of reporting that only comes. Through that, once you have that, once you're able to get to a technology stack perspective, you have a real CRM type solution in place.

Now you can start to use the data to prioritize what's out there. So I can now start to look at the qualitative factors of a particular deal and prioritize the leads that are out there, prioritize the opportunities and start to think about where do I put my resources? You know, I'm going to put my eight teams on the ones that are going to move the needle for me profitably.

Rather than sending the A teams on wild goose chases, just because it is requested by maybe yesterday's top performer. You want to then make sure you're, you've got a good, solid cadence of how you look at that. What data are you looking at? How often are you looking at it? How are you slicing and dicing it?

Making sure you don't focus too narrow, too near term, but also don't get lost in the blue sky of the future. Find that mix of, of managing to the near term, but not losing sight of the, the out months, the out quarters. And then. Communicate effectively throughout the process internally and externally. So using the new found data and insights to know when should others reach out external to your organization, you, you might find that you're stuck and you need to bring in you're the loan officer, your deal stuck.

I may need to bring in the. The chief lending officer, I may need to bring in somebody from treasury because that's going to be part of this commercial deal, you know, whatever that might be using that data to understand when should I reach out and what can I do to self serve internally, right? Where are these things at where deals stuck?

Whereas there are a lack of information, lack of knowledge. And then finally, just. Knowing what good looks like, what, what do we want? What do we need in terms of the data to qualify a healthy pipeline? And I think, again, that gets back to the behaviors. Are we letting things get stagnant or are we in the constant communication that tells me, yes, I am going to move forward, you know, how am I.

Holding both sides accountable to what needs to be done and thinking through all of those on a continuous evolution flywheel type process where you get going with that, you start to learn, you start to understand, then you input more data into it and the flywheel starts spinning faster. So I think high level, that's, that's how I would break it down and think about it.

Mitch: That's great. I like your first call out there, right? Managing all of this in a spreadsheet really makes all of that difficult. I couldn't imagine being a chief lending officer at a bank and getting 20 different spreadsheets with 20 different pipelines that are all reported differently and really being able to understand what deals are in the pipeline, being able to inform what could be funded in the next few weeks.

That sounds kind of like a nightmare, right? So I think there's a lot to be said for the use of technology when it comes to managing pipeline and thinking about, you know, people throw around the term CRM a lot, but I think being able to really. Yeah. Get a grasp on where deals are at. And like you said, where they're stalled is really important.

It's not just closing the business, but it's closing the business faster, right? It's being able to close more business. It's understanding what deals have we won and why, and what deals have we lost and why, and being able to maybe even pre fly some of those deals a little bit and understand, Hey, maybe we do have a niche.

And maybe this is an area where we need to take a step back and have some more strategic conversations on how we could better serve this part of our market as well. So what are your thoughts around around some of that? I think I just threw a lot at you there.

Bryan: No worries. Getting away from free form manual things that are fraught with error and inconsistency. I don't copy over last month's spreadsheet right, I miss a column, I miss a row, whatever it might be, and I lose valuable insights or I waste time in having to rebuild it. And again, just honing in on the data that makes up your pipeline where, you know, and I know nobody out there would ever do this.

I know none of the lenders that might listen would ever have these problems, but you know, those situations where, as you said, knowing where a deal is, like what stage in the pipeline is it, that's great. It's good to know it's important, but more importantly is, well, is that in the right stage? Why do we have it?

In that stage, what are the success criteria that you want to build into your process that tells me. Yes, I am indeed in this stage for this reason. I have done these things. I have these things yet to do and having the system, you know, continuously remind people and allow me to report on those again, getting to those behaviors, not just the self attestation of, Oh yeah, this is absolutely going to close this month and I've got 80 percent confidence, but.

Have I sent contracts? No, absolutely not. Probably is not getting done in, you know, what do we have? Eight days left in the month or something like that. But it's those types of ideas that you can only do with a system intended for that purpose, right? That allows for the right level of data, the right level of reporting so that you can sit down, determine what good looks like for your selling processes.

You're selling stages, you're selling cycles. And have the flexibility to configure that in so that you can get at that aspect of it and not get caught up in the, the glitz and glamor of the million dollar deal, right? Not focusing on just what it's worth and getting excited because it's forecasted for the quarter.

But rather, is this something where we're doing the right things that actually has a chance to close that we have solidified as our business to win?

Mitch: Just curious here. So let's say I'm at a bank, right? Don't have a system in place right now, managing pipeline. And let's say Excel, what would be your advice coming in to say, Hey, here's how to take those first steps towards a more streamlined, better way to manage the pipeline,

Bryan: The biggest thing is the cultural change. Cause the, the technology to a certain extent is the technology, maybe a little glib, maybe a little too exaggerating for effect, but any CRM you can make work, you sure. Some are better than others. Some fit your culture or some fit your need better than others.

Some are bigger, some are smaller, all those things, but. What this comes down to is it's got to be driven top down. This has to be strategic. This has to be setting the parameters for why we're doing it and changing the behavior that exists. Now, one thing to be cautious of, one thing to note is it's going to lead to potentially lost talent where folks that don't.

Want that over. They want to be able to take the three trips to wing foot and spend thousands of dollars on entertainment and that type of approach. They don't want the behaviors seen and known. They just want the focus on the results, the dollars at the end of the day. You gotta be prepared for that.

You may lose good, but you're probably going to lose good that. You didn't know came with other problems. Go into it with eyes wide open on that front and understanding that you're going to have to coach and mentor through the early stumbling blocks and telling people, Hey, this is, this is how we're going to do business.

You have to use this tool. I've seen some organizations go as far as. If it wasn't entered in the CRM, you don't get paid and just using that to kind of go and stick instead of carrot, but you have to really think through and commit to what you're going to do to ensure the use of it and drive the adoption because otherwise it's going to be quote unquote harder to use a CRM than an Excel spreadsheet, probably only for a little bit of time until you get comfortable with it.

You'll find that the savings are, are downstream. It's not in the upfront data entry. It's in the revisiting the information time after time, it's coming back to the opportunity, not having to rekey things that people won't look at initially. They'll just say, Oh, it was so easy to put my notes in Excel.

They're not going to love that right out of the gate, no matter what you choose. And you just have to work through it and push the change so that taking the excuse out of the, out of the mix, not allowing for, well, I like the old thing better. Well, the old things going, this is what we're doing. This is how we're running our business.

Mitch: I think about that in terms of sharpening a saw, right? You can go and try to cut down a tree with a dull saw and you can cut it down, but it's going to take you a while, right? But if you take the time to, to sharpen it, you go to attack the tree and you get it done. The job's a lot easier in the long run, right?

You spend a little bit of time up front. The downstream work gets a lot easier. And I think, you know, that's kind of the, what I heard you saying, right? It's going to be painful at first. You have to take that step back, but, but really the payoff is definitely downstream. And even thinking about managing to those behaviors and not just seeing it in the pipeline movement and the visibility, but also the profitability of, of some of those loans to where you're, you're spending.

Less time, less resource on getting them across the finish line. So, yeah. So Bryan, thanks. Thanks. I couldn't think of anyone better to have this conversation with today. So, so thanks for, for your insights and thanks everyone out there for listening to today's episode of Lending Made Easy.