Recently, I attended the Receivables Management Association of Canada conference in Toronto. A number of credit professionals across Canada came together, and talked about our industry, regulation, and shared challenges. I feel strongly about the RMA, because it is a great forum for the exchange of ideas. In our industry, that's sadly rare.
Before the RMA formed a few years back, throughout my career I had attended some unsatisfying focused collection industry events. These events brought to mind a bunch of folks sitting around a table, playing poker, and no one wanted to play their cards first. It's like everyone believed they were doing something secret and new, and didn't want to give away what they were doing to their 'competitors'.
Now, I may have the unusual belief that there is more than enough business for our industry for everyone, and that transparency is a requirement for all successful companies (not just collection agencies) in this current culture of social media. Twenty years ago, your clients were privileged information you didn't share -- now consumers freely share that information on Twitter and online discussion forums. Secrecy, regardless of the inclinations and wishes of business owners, is a thing of the past.
As well, many collection agency owners try to paint an image of their agency is something new -- a hybrid legal/collection service, a specialized boutique agency focused on a single industry group, a customer service agency, and so on -- but let's face it, regardless of the trappings, what we are doing here isn't rocket science -- it's the act of one individual talking to another and arranging payment. There may be subtle differences in execution, but largely this isn't where companies can stand out from each other.
What *is* rocket science is the culture and structure of the agency. Clients and competitors often overlook this, focusing on the minutiae of letter scripts or staff training. What they should be looking at is the way the company is built.
The Real Rocket Science Stuff
Software -- the software the company uses is crucial to operation -- just like a automotive factory allows the company staff to make cars, the collection software allows collection agents to contact and collect funds for creditors. Rarely do companies focus on this, but really it's the central tool which makes the company run and delivers results. At one point I had the unfortunate circumstance to work for an agency with software that couldn't produce collection letters. Can you imagine the difficulties we encountered?
If an agency is going to be truly different, they need to develop and refine their own software. Many agencies use 'off the shelf' software, and their costs and licenses spent to maintain it would keep employed a fleet of technical support staff. That's something to think about.
Structure -- does the company bloat on management and technical staff, or does it pass responsibility to the collection agents? This can often tie to software and efficiencies, as well as company culture. If there are collection agents, then supervisors, then managers, and directors, and more, this drives up the fundamental cost for operation, and limits the ability of the majority of the company employees to steer and drive results.
Most agencies have grown without a plan, so they look like a patchwork house with addition after addition added on. If you are an agency owner, or dealing with an agency, ask for a business plan, and ask what innovations have been brought to bear over the last 12 months, and who was the author of these changes. Because if we aren't adapting, we're slowly dying, right?
Culture -- often companies that focus (by client requirement or otherwise) on reactive management rather than proactive management, adds to obstruction to the collection agents doing their job. This can cause company structure bloat by requiring supervisors and managers to patrol the floor or critique calls in an armchair management fashion, or put limitations on innovation of tools. Little things, like limitations requiring five to ten minutes and three sets of eyes to process a single payment, or disallowing email as a communication path to staff because it isn't a trustworthy tool are perfect examples of huge but indirect limitations on an agency's ability to perform their role.
Most agencies don't pay any attention to their culture, and this fuels a rotating door for staff, and dissatisfaction amongst all levels of the company. Who are the 'old guard' at your company on the ground level? What do they think about the company culture, and the satisfaction of those working at the agency? And most importantly, who is listening to these team members and doing something about it?
Drive -- Our service role is repetitive. Find consumers, contact consumers, collect from consumers, and repeat endlessly. It is so easy for our companies to fall into patterns, and fail to progress and develop. This is probably the absolutely most important quality of an agency. If you aren't growing, and adapting, you are being left behind. Our industry has seen terrific changes over the past ten years, and while it isn't as apparent as it might be in auto manufacturing or software development, these changes impact us just as much as any other company.
What's Your Point?
Why am I rambling on about this? Because the strength of organizations like the RMA and the survival of our industry depend on us talking to each other. If we take these points, and start a real discussion, from agency to agency, or creditor to vendor, we can be innovators and thought leaders rather than unthinking vendors. We can share notes on structure, culture, software platforms, innovation, or change management. This isn't about who each agency is representing as clients, or sharing 'black box secrets', it's about having a conversation about our differences (and really, we all want to be different), and working together on shared goals -- whether this is appealing for intelligent legislation reforms, or working to improve the image of our industry, we should be doing this together.
If you are a credit or collections professional, and you have some ideas to share, I would strongly recommend joining the Receivables Management Association of Canada. The website for the RMA is www.rmacanada.org. I have been a member from almost the beginning of the organization, and I can state I have received a great deal of support, collaboration, and interaction with some amazing people in our industry.
If you would like to have a discussion about the credit industry in Canada, I'm all ears and I'd be very happy to hear from you. My telephone number at Kingston Data and Credit is 226-946-1730.
Kingston Data and Credit