Leveraging Relationships To Meet A Huge Challenge

Problem

I joined a small business lending company as a VP of Engineering and was given a fairly nebulous challenge of building an online lead generating tool. We got it up and running, and started gathering data about customers on it. However, the board came to me and said that while I had done exactly what they had asked me to do, it wasn't what they actually wanted and what they actually wanted was an online transaction where someone could apply, get approved and get everything in place to receive online funding. I needed to rethink the way in which we were doing all of our processing. This was a significant challenge, as I had to figure out what it meant to do an online transaction, and what controls we would need to put in place so we could gather data, make money with, and successfully govern. To add to the challenge, in the middle of figuring all of this out, the board changed the company's CEO and the new CEO had very different ideas in terms of the restraints he wanted to have put in place. Our initial idea was to limit our online lending to the industries we had the most data about and felt most confident about and to limit the size of our funding to a fairly low number. However, the new CEO wanted us to provide online funding for all sizes of funding and for all industries. We also had to find a way to leverage the existing technology stack, which was a legacy technology designed to use people-oriented processes, rather than an online, digital process.

Actions taken

After six to eight weeks of trying to work on the project with just my own team, I realized I needed to build bridge between us and the team that had built the legacy technology. I reached out to their manager, took him out to dinner to break bread with him, and explained that in order to be successful we would need to start working together very closely. Next, we started matrix managing and I started getting really involved with the other team at the same time that my team was designing the product and building out its frontend. I also reached out to our underwriting and collections teams in order to work out the rules we would give the computers so they knew what they were doing. The key actions for building this product were bringing the teams together, finding leaders for each of the functions we needed in order to launch the product, and finding outside parties who could help us with some of our key automated functions to help us determine people really were who they said they were. In addition, we had to push back a little bit in terms of what the CEO was asking for. I leveraged some of the other people involved in the project and asked the head of risk assessment to explain to the CEO that while we could do this, we would lose a lot of money. He strongly recommended not offering online lending for every kind of business and explained that while it was okay to lend to more than the five industries we had originally agreed upon, there still needed to be some limits in place. We also explained how we would learn about the other industries so we could more confidently lend to them in the future. The result was that we were able to launch the platform in the timeframe we were asked to launch it in. The platform didn't work for every possible use case, but we used a defined "sunny day" path, where if a client met the right criteria they could apply and have their loan approved all online. If they went astray during the process, they would be told that someone would call them or they could call us. We also had a path to enhance the experience, so that at each step along the way, we could gather data about how many people were getting from step 1 to step 2, versus how many were getting from step 2 to step 3. This allowed us to optimize the funnel along the way. Within a year, the internal flow we had became the largest single source of leads and loan applications, including the partners we had who had been sending leads to us for 18 years.

Lessons learned

When given a challenge, ask the question "Does anyone here already have this expertise?". I should have done this earlier. I tried to push the project along using just my team before realizing that just wasn't going to work and it took six to eight weeks for me to realize I needed to build a bridge with the other team. It's also useful to examine how third-parties can assist you when launching a product. In this case, automated know-your-customer wasn't really a big thing at the time. However, nowadays there are a bunch of third parties that can offer this, so if I was faced with this challenge today I would outsource this to them.