The future depends on what we do in the present.
~ Mahatma Gandhi
I have always loved working in credit and I’ve got as many reasons for loving it as the amount of years that I’ve worked in this field. From my humble beginnings in door knocking to rising through the ranks of global corporate organisations, this passion never changed. But what has changed is the need for constant adaptability and innovation in a rapidly changing landscape. This is not only true for organisations, but very much the reality within credit leadership.
So how can credit leaders move out of the subsistence of an ‘old’ reality and bring to life renewed value, purpose, and direction in order to manage future challenges that encompasses cultivating relationships and thinking outside the square?
Which one are you?
Do you take the time to reflect back on credit trends either in your industry or credit in general? Do you take the time to envision what your responsibilities may entail in the future? How will this affect current processes and customer relationships? How often and how well do you collaborate on customer data trends with your management peers?
These are some questions innovative credit leaders are likely to ask themselves. They observe, build and experiment on collaborative data and ideas with aims to reduce risk and increase cash flow, customer satisfaction and overall profitability for their organisation.
On the other hand, the credit leader may be happily focused on keeping the oil running on the structured tools and minimal flexibility in data systems that works well and targets are being met. Or where the ultimate decision about approving customers and stop credit are made by the CFO, FC or Sales Managers, and there is nothing to be done with it. This mentality of “if it ain’t broke” and “that’s just the way it is” tends to shut down a mindset for potential growth.
The paradigm of reactive and subservient credit leaders of the past no longer serves the environment in which we operate today. Those credit leaders resisting change (for personal or professional reasons), may be disinclined to embrace the responsibilities that require a different set of values to what was once considered the norm for success.
These different values are relationship-based and analytical in nature, and thus raises the New Credit Leader to be independent yet aligned with sales, marketing and service teams.
These changes in values are an absolute necessity for the New Credit Leader, with fast moving technological changes, Big Data and an ever-increasing landscape of market competition and customer satisfaction.
4 Qualities to Embrace Today
Upon reflection of the last 20 years inside the world of credit I looked for patterns in credit leadership development and how I experienced growth and success. I believe these critical and interdependent qualities are key in enabling a paradigm shift for credit leaders to be independent and aligned within their organisation.
1. Conversationally Intelligent
This is the ability to navigate and grow with others, and elicit a power-with rather than a power-over approach when holding the space in conversations. It requires a sense of self, an awareness of thoughts, feelings and actions that accompany empathetic intentions. Creating this type of trusting conversations will lead to building healthy relationships across the board.
Effective leaders understand that they need buy-in to align with other business units. They also need to provide clarity when leading, coaching and developing their team members through regular information sharing and feedback. With this quality, credit leaders have the ability to shift people from an I to WE culture that promotes a connection of care.
Since healthy conversations foster trusting relationships, collaboration is build on being conversationally intelligent. Collaboration means partnering with others toward a common goal, which in this instant would be optimal profit for the organisation.
In part contributing to the success of the credit leader’s independence, is the willingness to partner with sales, marketing and service teams to provide exceptional customer experiences. This can be realised through understanding relevant data trends from various aspects, and bringing these together to formulate the customer experience from a new perspective. One that delivers improved ROI and cash flow.
One of the future challenges that credit leaders are facing is developing skills for effective data management. With this analytical aspect of risk management, comes the responsibility for discernment. Being adept at managing customer data (whether based on entity verification, sales performance, payment performance, or competitive market analysis, etc.) allows the credit leader to make informed decisions on observable trends.
This information can then be brought to the table when collaborating on improvements, or for further risk management strategies to enhance prediction and predictive credit tools aligned with collaborative partnerships.
To find trends or patterns in large data, start ask questions around customer segments and whether there are particular groups at risk. At the very least credit leaders are encouraged to engage credit reference agencies that provide at minimum, credit reports and credit scoring to minimise financial risks associated with existing and potential credit customers.
Innovation is an attribute that engages that part of the human brain increasingly referred to as The Executive Brain (anatomically speaking, the prefrontal cortex). A place where strategy and curiosity leap forth through questions and aspirations shared with others for mutual success.
To activate the executive brain is to be conversationally intelligent. An open-mindedness and partnering attitude to experiment with data and ask questions for which you have no answers. Questions that bring insight and a shift in perspective, such as:
- What can we do to build common ground to increase profit/reduce risk?
- What would an amazing customer experience look like?
- What can we do to build on each other’s ideas?
- If we started backwards, what would we do?
Developing and nurturing these four qualities not only contribute to being an effective leader in credit but provides for ongoing personal development and opportunities to create a healthy workplace.
I hope this article gave you the inspiration to stop and reflect on where you are today and how you envision future challenges within credit leadership. So let me flip the coin and ask all the credit professionals out there “What are some of the qualities you think a credit leader needs in order to be successful in the future?”