NOTE: Article written by Robin Aldridge. Robin Aldridge is currently the co-founding Partner and Owner of OnPoint Services, Inc. OnPoint provides consulting and fund administration services to private money brokers and funds. She is a lives in San Diego is an active member of the California Mortgage Association, American Association of Private Lenders where she has given multiple presentations on fund and asset management topics for the private money industry.

It was 2007 when I was part of a management team that managed a $75 million mortgage pool that had 500 individual investors and an institutional line of credit. During the 2004-2007 years, the private money lender experienced significant growth of capital, loan originations and employees. However in August 2007, we saw some early signs of shakiness in the market and decided to suspend any new capital or redemption requests into the fund until we had a better idea on where things were heading. This ultimately became known as the Credit Crunch of 2007 and subsequently the real estate and lending markets crashed.

I was on the front lines with the investors in our fund. It was the beginning of a challenging time and little did I know it was the beginning of a period that would last more than six years until we decided to ultimately close the fund. I did not know at that time the depths the market would fall, but felt certain this was not going to be a flash in the pan. I sought professional help to prepare for the choppy waters ahead. The professional help could very well have been a therapist, psychologist or a psychiatrist for that matter, since we originated second mortgages in California, but at last it was a global professional peer advisory organization. The structure is typically 12-16 professionals in different industries that meet once a month for an all-day meeting session. Meetings consist of speakers, issue processing and other professional development practices.

One of the most valuable tools I experienced while attending these sessions was structured goal setting. I will go into the process further, but I want to impart on you that you do not have to be in an outside group to enact goal setting with yourself or your employees. There are a number of published worksheets and reflective questions out there to get your juices flowing on goal setting, but starting with a review of the previous year’s good and bad highlights will likely lead to an informative discussion on what needs to be addressed for the following year.

For instance, if there was an item that came in significantly over budget due to bad planning, what is the issue that needs to be addressed for the following year? A good example is IT. After winding down our fund, our need for live data and space, in theory, should have been reduced, but our IT cost did not go down. We addressed this issue by going through and identifying with our IT company what could be stored inactively and what needed to be accessed live (typically 1 years’ worth of data). A challenging part to IT is being able to speak the same language and identify needs with clarity. It ultimately came down what we defined differently as available data versus live data. Once we worked through that expectation, it resulted in a solution that reduced the monthly cost by 75 percent.

Our structure for goal planning is designed in three parts:

Professional goals – Professional goals are about you, your career and your leadership skills – in essence your personal professional development. This is not for your company or employer, but ultimately the company will benefit as well. As a private lender, is it your goal to become a speaker or expert on your niche product for an investor or borrower? What do you need to do to attain this goal? Create a case study or white paper? Join a professional organization? Network more or attend focused conferences? When going through this planning session a strategy will start to emerge and definitive tasks can be defined.

Organizational goals – Organizational goals are tied to specific outcomes for your company. For a private lender, it could be to increase loan originations by offering new loan products or expanding into a new area. What would need to happen in order to accomplish this? Should I be researching licensing requirements and cost, borrower and real estate demographics and typical lending needs in the area? Breaking down the requirements to accomplish the goal is as important as the goal itself. In most cases if you have a strategic business plan in place, this goal will also be noted there but not in all cases.

An efficiency goal in some form should be one key goal for every organization. To start out, task the employees with documenting their daily tasks for two weeks to a month. This exercise alone will be eye opening on a number of fronts. You will likely find which employees use technology or seek out efficiencies to solve matters. You will see which employees follow a process because “it has always been done that way and do not question the necessity.” It also bring things to light matters that need to be addressed whether through removing the task altogether or brainstorming on other ways to solve, particularly if it is an intensive task.

The ultimate result a leader or company wants here is to empower the employees to think this way on their own. If an employee asks the question, “is this necessary” or “is there an easier way to do it”, that is a good step in the right direction. Or best-case scenario, they identify a problem and a possible solution to management. That is efficiency at its best.

To bring this efficiency point home, our fund experienced immense growth within the first couple of years and we increased employees exponentially to fill the need. At some point, we had to take a breath and go through this exercise. We not only tasked the employees with documenting their work but also had them create visual flow charts. We provided education and technology to create the flow charts and more importantly cash incentives for the best work submitted.

This exercise gave management the ability to know how the company was operating on a day-to-day basis, but also indicated where there were major inefficiencies. The inefficiencies were fixed by technology, process documentation (many employees did the same task differently), one-time cash incentives to employees that suggested and subsequently implemented expense reducing measures, and some reduction in force where needed.

Personal Goal – You may be able to guess what this goal tends to be for most professionals – losing weight or getting healthier. Defining how this is going to be achieved along with an attainable goal number is critical for success. Other typical personal goals are volunteering, travel destinations, future planning like a will or trust, or creating more of a work life balance. A lot of professionals are high producing but also think things will stop without their input, so vacations can be consumed with checking email or calls resulting in added pressure from the family. Some professionals have to define checking email two times per week during a vacation. Having defined parameters helps in keeping to the goal at hand.

In December I completed my 7th annual goal setting planning session with my group for 2014. Thus far, my success rate in completing goals is about 75 percent. Over the years, I have adjusted my overarching goals to attainable size and realized which ones will require the most attention and time, then prioritize them accordingly. It is easier during the year to identify a goal that may be a candidate for the next year’s mission so that when November or December rolls around, you are not completely starting from ground zero.

Lastly, it is important to do this in a group setting. It helps immensely having outside input on your goals and tasks when you are creating them. Different perspectives help vet the real goal at hand. You can increase revenue by gaining more sales or reducing unnecessary expenses. Point is, there may be many answers in identifying the tasks to achieve your goal, and having the input of others is a creative and efficient way to find them. Following up on a monthly or bi-monthly with your group is necessary to ensure accountability and awareness. It is easy to get caught up in day-to-day operations and that is why breaking down the goals into specific tasks is necessary.

What better time to set foot on a new path than the beginning of spring? What are your goals for this spring/summer?