5 Things you Can Learn about Commercial Lending from Buddy the Elf
As we run full speed toward the end of the year, many of us have favorite movies that get us into the spirit of the season. While holiday movies often help us escape from the hustle and bustle, there are several things we can also learn from them about commercial lending. More specifically from one of the most beloved modern holiday characters – Buddy the Elf.
Buddy was raised by elves on the North Pole. Once he realizes that he’s actually a human, he sets off on a journey to find his father. Through his journey, we learn that it’s important to have a plan, to be naturally curious, to focus on relationships, to know your strengths, and that persistence pays off.
Have a Plan
Many financial institutions review and refine their commercial lending processes going into the new year, and can take a cue from Buddy to ensure they have a plan. Buddy had a clear plan for his first day after meeting his family:
“I planned out our whole day. First we make snow angels for two hours, and then we’ll go ice skating, and the we’ll eat a whole roll of Tollhouse cookie dough as fast as we can, and then to finish, we’ll snuggle”
When you and your team are looking to improve your commercial lending processes, it’s important to have a plan in place to understand what you’d like to accomplish. Start by evaluating your current processes to identify where you should focus. How many times are you having to re-enter information or copy it to a new location? Where are data silos within your process that are stifling collaboration? What systems are used to support the entire lifecycle of a loan – from application, to underwriting, booking, and portfolio management? After you take an honest assessment, you’ll be able to properly identify gaps that will help streamline your processes and make your team as efficient as possible.
Be Naturally Curious
Commercial lending is both a science and an art – both of which require a certain level of curiosity. After leaving the north pole for the first time in his life, Buddy the Elf was naturally curious. He wasn’t afraid to ask anybody any question. After waiting for his half-brother, Michael, to get out of school Buddy had a lot of questions for him:
“Why is your coat so big? So, good news — I saw a dog today. Have you seen a dog? You probably have. How was school? Was it fun? Did you get a lot of homework? Huh? Do you have any friends? Do you have a best friend? Does he have a big coat, too?”
Every commercial deal is unique and approaching each one with a sense of curiosity will help ensure high quality credit decisions. Questions also help ensure you know your client – not only from a compliance standpoint or to find out facts but also to establish and build a strong relationship with them which leads us to another lesson we can learn from Buddy.
Focus on Relationships
Buddy was hyper-focused on building relationships – it wasn’t just something he did, it was the core of who he was. Whether it was trying to get to know Walter (his father), Jovie (his accidental coworker turned love interest), or Deb (his father’s executive assistant), Buddy was constantly focused on learning about others and bringing out the best in them. Even the way Buddy answers the phone at his dad’s office is a glimpse of how Buddy was a relationship builder:
“Buddy the Elf. What’s your favorite color?”
It’s no mystery that relationships are critical for successful commercial lending. Relationships can also be difficult, and if we’re honest, we can make mistakes. Strong relationships are built on honest and open communication. Buddy teaches us that the best thing to do when we realize we aren’t able to deliver on what we thought we could the best thing we can do is to be upfront and honest when he leaves a note to his family on an Etch-A-Sketch that reads:
“I’m sorry I ruined your lives and crammed 11 cookies into the VCR.”
Buddy’s confession is a catalyst in taking a strained relationship and turning it around. When you’re focused on building strong relationships, you’ll build strong connections with your clients founded on trust that will also help you grow your business.
Know Your Strengths
Maybe it was ironic that Buddy left his family a note on an Etch-A-Sketch since it was also the toy that sparked the moment of self-awareness that he was actually a human being raised by elves. Since his hands weren’t as small and nimble as the elves, Buddy fell 985 units behind on his Etch-A-Sketch quota. Having made only 85 of the 1,000 needed his other team members had to pick up his slack causing this exchange between Buddy and the Ming Ming, the head elf:
Buddy: “I’m the worst toy maker in the world. I’m a cotton-headed ninny-muggins.”
Ming Ming: “No, buddy, you’re not a cotton-headed ninny-muggins. We all just have different talents, that’s all.”
It’s important to not only understand the strengths of your team members, but also to provide opportunities for training, growth, and development. Developing talent within your lending department will allow members of your team to grow professionally which will ultimately drive employee retention and greater collaboration.
Persistence Pays Off
In today’s heavily regulated and competitive lending environment, it’s easy to become bogged down with reporting and compliance while trying to find the balance of driving loan growth. Buddy didn’t catch many breaks either, but he remained persistent. Even his journey from the North Pole wasn’t easy:
“I passed through the seven levels of the Candy Cane forest, through the sea of swirly twirly gum drops, and then I walked through the Lincoln Tunnel.”
A persistent disposition is necessary for your institution to grow and manage its loan portfolio. With the right tools, you’ll be able to stop saying “Son of a nutcracker” and start saying “I just like to smile. Smiling’s my favorite”.
Elf. Written by Berenbaum, David. Directed by Jon Favreau. Performance by Will Farrell, Entertainment in Video, 2004.
*Baker Hill does not own the rights to these quotes.*
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Posted on Friday, December 20, 2019 at 10:30 AM
by Mitch Woods