So, we have new technology, we have new ways of doing business, we have a changing customer base that has new needs and desires of our companies. It’s a darn shame we can’t do a better job, because our business is modeled on a structure out of the 1960’s.
Let’s take a look at my good friend Steve (it’s not his real name, but he may know who he is). Steve owns a mid-size third party collection agency, and he has 40 collection agents, 3 administrators, 1 IT manager, 2 sales representatives, and himself. Steve has a problem because his company has stalled in growth, and he’s feeling some pain points because his IT manager can’t deliver on simple requests, and his sales representatives aren’t growing his business.
Steve is watching too much Mad Men on television. This kind of structure doesn’t work anymore.
The fundamental basis of your company, the people who work with you, has changed immensely over the years, and many companies are failing to keep up with the cultural change. People don’t stay in the same job for 30 years out of loyalty, and the idea of building a human assembly line is gone. If you want to retain your staff, you need to engage with them – this means giving them the opportunity to be more than a button pusher, and to take on responsibilities and risks.
My friend Steve has a high turnover, because he isn’t any different from other collection agencies, and doesn’t pay as much as others. However, it’s not the pay that retains people, it’s a positive work environment. Steve’s collectors are told to collect more, without being given the tools to do it, and aren’t told how their work impacts the clients, or the company’s bottom line. There are a couple of staff that have been there for years, and there’s an informal pecking order based on seniority, but no effort is given to help staff members grow or improve, or take on new roles.
Many staff members have aptitudes that are waiting to be unlocked – some are writers, some are tech-savvy, some are friendly and outgoing, some are analytical. These qualities can be utilized outside of a one-paragraph job description, and the people who work with you will thrive on challenges that you give them.
Retaining employees through empowerment isn’t a new concept, but it is one that I believe is lost on our industry. Our workforce is aging, especially in management, and millennials are stepping in to the empty spaces left behind. If we don’t adapt our structures to retain the talented, and intelligent people that will come to work with us, our industry will suffer.
Sales & Marketing
In the good old days, a business owner would hire one or two sales representatives to make cold calls, often out of the Yellow Pages (or Vernon’s Directories – anyone remember them?). That sales representative would try to call 80+ businesses, and when they reached someone interested in their services, they would put together a sales presentation package and hand deliver it to the target client, and try to build rapport. The company was built by landing individual contracts in a traditional manner, and the sales manager would receive a significant commission for the clients they had built up over years.
Steve has two sales representatives, who call about 150 leads a day, resulting in about 50 contacts, 2 client proposals, and maybe 2 meetings a week, resulting in 1 new client every other week. Outside of these cold calls, or the occasional conference, no one has the opportunity to hear anything good about Steve’s company. Compare this to a company with a lively blog that gets 200 hits a day, or an outreach program that allows allow staff members to engage with people on Twitter, Facebook or Linkedin. How many positive brand experiences are possible when you don’t limit your marketing efforts to one staff member and their telephone?
In a perfect world, you don’t need a sales manager – you need to encourage everyone who works in the company to be an ambassador for your brand to the outside world. The old days of dialing one call at a time are over, now a Linkedin post might be viewed by hundreds of people. A Slideshare presentation or embedded video can have an ongoing effect of a presentation to anyone who is willing to click on it, and your staff can share those links. Everyone in your company has the ability to support sales and marketing, and everyone at your company should.
IT and Technology
If your organization struggles because one or two IT managers are responsible for your day to day operations, you are doing it wrong. There could be a number of things involved – outdated software, apathetic staff, or simply overloaded work on a restricted number of FTE, there is a solution, and it’s not just dealing with the symptoms.
Steve’s IT department woes are out of a Dilbert strip, and sadly not different from anyone else’s pain – the IT manager can’t be found when something crashes, and there are issues almost every other day with corrupted databases, files to import, exports and reports that need to be run for clients, and any other number of ongoing small fires that need to be put out.
There are thousands of brilliant IT folks out there, and they don’t work 9 to 5, or are necessarily local to your company. They are freelancers, contractors, and consultants. They are available to launch an isolated project, finish it, and bow out of the picture. With start-up companies, corporations that claim to be “nimble” or have “scrum” positions, there’s not really a need to suffer through the traditional IT department woes.
By fixing woes, I don’t mean troubleshooting, I mean building better tools. This weekend, I shared horror stories with a business colleague, and between us we were able to name a half-dozen companies don’t have CRM software for their customer service or sales departments – some of these companies were large national firms! I may be a database junkie, but if I could build a robust CRM in a weekend for less than $1,000 why can’t a multi-billion dollar company provide that tool to their sales and marketing team?
By hiring an outside contractor, you can provide a finished product to your company with relatively low cost and quick turnaround – after all, if it’s not completed, the contractor doesn’t receive payment. This way, you can have start-up innovation and energy for your larger company. For ideas of where to search for these brilliant and efficient freelancers, I would recommend starting with www.elance.com, www.guru.com , or www.project4hire.com.
There are still in our industry collection supervisors, collection managers, VPs and Directors – all in the same company. Literally layers and layers of management over a core role in your agency or your credit department, which manages a simple task – calling consumers or companies to resolve outstanding issues. Our industry no longer needs to be complicated by bureaucracy.
In the old days, supervisors would sit on the floor and overhear conversations held by collectors, and critique them based on one side of the conversation. Or maybe they had a conference line they could barge into a call and listen on a live basis. In this day and age, that really isn’t necessary. Technology can be built to filter, to easily access, and drive exception management, and the stacked layers of supervision no longer are necessary.
Steve Jobs referred to Apple’s “startup” culture as part of its success. Why? Because culture drives innovation, and leadership evolves from culture. If you look at successful technology companies like Apple, Hubspot or ValvE, or even customer service companies like Zappos, they all have a strong culture that empowers their staff to take on leadership roles and responsibilities to some degree or another.
In the credit and collections industry, I’d recommend empowering the base line staff (the collection officers and the CSRs) in your company – handing them responsibility for project management, for acting as a point of contact for the client, for managing portfolios with proper tools we can provide them. After all, the collection agents make up the majority of our workforce – why aren’t they being involved in the big picture?
The whole point of Mitch Joel’s book, CTRL ALT DEL – Reboot Your Business, is in my opinion, is to not accept the old way of doing business as the only way of doing business. We have such phenomenal tools at our disposal, and with the workforce changing, and the customer base of our companies changing as well, we can’t afford to not be innovative and make the change ourselves.
There are huge opportunities for the credit industry to grow, and improve our reputations as a service industry, as employers, and as an important component of business, and we need to innovate just as other industries are evolving around us.
If you want to talk about business structures, innovation, or technology solutions, this is something I’m very passionate about and would be very happy to discuss with if you want to reach out to me – my direct line is 226-946-1730.
Kingston Data and Credit – www.kingstondc.com