Receivable/Accounts - Information for Credit and Collection Issues

Wednesday, July 30, 2014

Using Scrum In The Collections Industry




I've talked on this blog about empowering collection agents in the past ... I'm a huge advocate of giving collectors the ability to manage themselves, and trusting them to do it.  However, trust alone cannot build a business.  Looking for better ways to grow our company, I've been looking at servant-leadership models, and came across Scrum.

If you work in the IT industry, it's probably a familiar term, but to the credit and collections world, it's not something we deal with – however, from what I've learned thus far, I think it's incredibly viable for our work model.

It's a bit ironic, as I've based our company 's ethics and team model on companies like ValvE and Hubspot, so finding another IT-related solution for our growth is a lot like coming back to the same well over and over, but I'd like to put forth a case for Scrum as a perfect model for collections.


What Is Scrum?

What I've learned is Scrum is a form of Agile Practice, or a model for a team of people to deal with complex and changing problems, while producing reliable results and encouraging creativity and teamwork.  It's used in environments with complex dynamics—and in my opinion, nothing can be more complex than organized negotiation with consumers on a large scale, where every single debt is a unique situation driven by a unique personality, and trying to fit it within a repetitive and productive process.

The term "scrum" comes from the formation of the same name in rugby, which is used to restart the game after an event that causes play to stop.  The idea, from what I understand so far, is to keep a complicated work environment running – it's supposed to be a simple, lightweight framework without a lot of bureacracy which is all about the people doing the work, not about technology or what they are producing.



How The Scrum Process Fits

So, above is a diagram of a scrum process.  You can see the main circle or "sprint" is a monthly cycle, which is a central feature in collections, for performance and revenue.  Inside that Sprint is a Daily Scrum, or a short 15 minute meeting where a team would get together and identify their "Sprint Backlog" or tasks to be met, and the ultimate "Product" that we produce in collections is the monthly result of revenue generated and liquidation achieved.  There would be an "End Meeting" after the month to look back and examine what went right, and what went wrong.  Sounds fairly applicable, right?

It gets better, at least from my perspective – before the month begins, there can be a "Sprint Planning Meeting" to determine the checklist or "Burndown Chart" for the month, which is a list of goals – the idea is that through the month, this chart of items can be tackled.  The awesome way that this can apply to collections is not just meeting collection targets, but setting targets for improving how the agency or credit department functions, or bringing in new tools or methods to collect.  This can be a database upgrade, an analysis of collection letters or talk-offs, or brainstorming ideas gathered from the collection team.


Enter The Scrum Master!

What got me on to Scrum was the role of the Scrum Master.  It's a kooky sounding title, but to me is an awesome idea.  The Scrum Master is a facilitator, or someone who works with the team to solve problems and keep everything running.  They aren't a manager, and they aren't in an authority position – they are one of the employees. 

Our industry already leans towards a facilitator role – we have experienced staff train new staff, and we have team members in place to double on uncooperative files, or handle escalations and complaints.  Inside the collection team, there are already people who help members of the team get the job done.  So why not adapt it?

The more I read about Scrum, the more I want to implement it at our company – however, it's a simple concept, but a hard thing  to master.  Really, the Scrum Master has to be a people person, and build teamwork without telling people what to do, or necessarily solving their problems for them.  They have to encourage involvement, smooth out rough edges, be intelligent and think about what they are doing, and win the respect of their fellow teammates.

But imagine this – a team of five collectors are working at a collection agency, all working on the same private label credit card portfolio.  The "Project Owner" is the Collection Manager who has set the liquidation and revenue targets, and deals with the client's requests.  The team gets together for their daily huddle meeting, and in 15 minutes identifies one month has a low liquidation, and collectively decide that today they will look at whether a credit bureau scrub has been done, the data has been imported, and the problem files have all been worked within the last seven days.  The Scrum Master spends maybe an hour or two outside of their regular role as a collector checking in with members of the team through the day and talking about what the team has found out.  The next day, in the next daily huddle, the team has identified that a number of files weren't assigned to the team, and the problem is fixed.  The best part is the problem was fixed by the team, without the use or need of management.


Conclusion

I'm certainly still a novice as far as Scrum goes, but I really think this is the way we want to take our company.  I'd recommend the following web sites for further reading.  Even if you aren't interested or able to bring Scrum to your company, there are a number of excellent points here about building team environments, encouraging employee engagement, and running a company  without a lot of bureaucracy.


If you are interested in Scrum, or have an idea of how this can apply to credit and collections, feel free to drop an email my way or give me a call.  I'd be interested in your opinion.

Thanks kindly,

Blair DeMarco-Wettlaufer
KINGSTON Data and Credit
226-946-1730
bwettlaufer@kingstondc.com