Some might say it’s a wonder that Mark Walker has been so successful through the recession — or that he’s even around at all.
In late 2007, when banks began restricting the warehouse lines of credit that First Preferred Mortgage Co. depended on, Walker faced a crisis. The co-founder and CEO of the retail mortgage company and its wholesale division, Michigan Mutual Inc., knew he couldn’t operate if those disappeared.
But thanks to some strategic planning, Walker was prepared for the worst.
“You have to always plan for a downturn,” he says. “Try to keep enough money in the company for reserves for those times. Always be proactive for unfortunate economic or legislative things that could affect your company.”
By diversifying, Walker guided the Detroit-based company to 2009 revenue of $30 million and nearly $1 billion in loans. His 145-employee work force grew 14 percent from 2008 and 30 percent from the prior year, proving he not only survived the downturn. He thrived.
Smart Business spoke to Walker about planning before you panic.
Get outside help. I don’t think you can ever just stay the same. You have to be looking proactively at any opportunities that are out there and, at the same time, keep a 4,000-foot-level [view] of what’s going on with the company so you don’t get too enamored in the minutia of everyday details.
One of the things that we advocate is trying to get outside help, to get consultants. Our board of directors has outside people on it that are not part of the company, so you get an opinion from others from a different view. Companies that just get the view of the employees or the management team can sometimes not get a good overall view of what other things outsiders could say.
So we use consultants quite a bit. We try to have them take a look at what’s going on in the industry to get fresh opinions. We’re always asking what’s going on in Washington, what is Washington looking at? There’s so many changes going on in our industry today, from licensing issues to legislative issues and regulatory issues, so we’re always asking that question.
We get input from as many consultants (as) we can. We’re going to seminars to find out what’s going on in the industry, and we try to stay abreast of all that.
Play what-if. Then we come back and we just plan, ‘What happens if this happens? What are we going to do if this catastrophe happens? Where are we going to move our business? If we can’t sell to A and B and C players, who are we going to sell to?’ We have those conversations monthly and weekly, so we play those scenarios out all the time.
[Leaders] get bogged down in the everyday issues and it’s important that you break out of that from time to time. Look around. Look at what other companies are doing in your industry — or any industry — and just see how they’re managing. We’re not bashful about taking advice from other companies and putting those policies and procedures in place to make our company better.
We do a lot of role-playing at our executive meeting. We take outside consultants and we have them role-play with us and say, ‘What happens if you’re doing this?’ or, ‘Are you doing this properly?’
