Leadership is the key factor

No one denies the importance of leadership in guiding organizational change.
Many articles have been written on leadership over the years. Leadership models have been glorified, studied and examined and then much has been said on varying leadership styles and their varying degrees of effectiveness. But in the end we all agree it is the single most important factor to create change in the organization.

Leadership is fundamental to the three elements needed to achieve change.
Vision provides a picture of the future. That vision should aspire to greatness. It must be grand enough to stretch the organization and it must be compelling to the employees making them want to commit to the vision of the leadership.

Without vision the organization’s goals become survival or damage control. People and organizations need vision to create a sense of purpose and also to determine the direction of the organization. Vision will only be obtained through leadership.

Alignment is the second key function of leadership.
Just like the golfer has to be aligned to the putt in order to lead the ball to the goal so must the leadership of your organization be aligned with the vision of leadership. I golfer who is miss-aligned can force the ball onto the correct track but it takes more effort and work to achieve the goal.

The same is true of an organization that is not aligned to achieve its vision and goals. Change will be implemented but it will be forced without proper alignment. Change will be resisted and hard to implement and it will over work the entire organization and the leader also. In the end the change will only work as long as it is being imposed.
Alignment is built through communication, participation of the organization and the meaningfulness of the vision.

If you can get the organization to participate in the vision of leadership and you have aligned yourself to achieve the organizations vision then you will be working with the minimal effort and change will be sustainable.

Deployment is a term used to indicate how resources will be allocated to achieve a particular result.
Deployment is a military term and a General once said that the force with the most resources will not necessarily be dominant; it is the force with the superior resources at the point of engagement. This is true in your organization also you need to make sure you have the superior resources handling the critical points of your business.

This is the essence of deployment, to allocate resources where and when they will have the highest impact on the problem. Effective deployment aligned with strategic change is the third arm of leadership.

Leadership is the key factor.
So the real answer is to have a properly aligned, deployment of leadership to obtain the organizations vision. This will require that the leadership has a clear vision of the desired result and can stretch the resources to meet that vision.

Do you need a culture change in your business?

Many employers are in need of employee culture changes throughout the complete business environment, how you can achieve change without disrupting daily business.

As your business matures it becomes necessary to move away from a “mom and pop” style of management more towards a corporate scheme. Most employers who face this moment in time are reluctant to make the culture changes needed to shift the company to the next level, as they wish to continue with the strategies that have built the business to this point.

With the appropriate planning this culture change can be managed to retain the “mom and pop” feel while creating employees who are forward thinking, cost conscious, long term, dedicated employees focused on the goals and vision of the owners.

Winning Culture Characteristics
Businesses that have employees with the following characteristics show increased employee retention, satisfaction and increased productivity.
• Adaptability
• Broad Organizational Awareness
• Interpersonal Effectiveness
• Empowerment
• Delegation
• Executive Disposition
• Entrepreneurship
• Mobilizes Resources
• Creates a Clear View of the Future
• Zeal for New Knowledge

So how can you develop employees with these skills?
This can be achieved with the proper Beacons for Change. Your first level to provide a beacon for change is your Senior Management Team the second beacon for change is a well communicated organizational model providing a clear picture of the organizational approach to success. The third beacon is a structured methodology to design the changes, this is required to analyze the current situation and make educated changes to current processes.
With these three Beacons for Change are initiated the business culture will evolve into a forward looking environment that is focused on the goals and vision of the owners. This will take time but starts with the vision of the owners of the company to have a different culture that is self managed and is headed for success.

What can the debt tell me about your client that the collector already knows?

When debt collectors work portfolios of debt the work standards will vary dependent on the portfolio. Debt collectors know that all debt was not created equal and neither was the debts creation equal, it all has different underwriting requirements. For example a Capital One card is targeted at a lower credit worthy customer and therefore has a lower credit limit and higher interest rate verses the American Express gold card that requires great credit to qualify for.

Debt collectors know that the higher the underwriting standards the more likely that consumer is to pay or at least desire to pay. So collection agencies, direct their attentions to the more collectable portfolios and less attention to the less collectable portfolios. What this means from the consumer’s perspective is more calls and more likely litigation will be in the forecast when the debt is deemed “more collectable”. What this means from the debt relief perspective is you need to understand the same things the debt collector knows to better arrange a settlement and to predict when the best time to settle is and forecast when a lawsuit may be filed in the account flow.

Also by the same respect that Capital One debt will have different expectations from the perspective of the agency and will receive less attention. It is also very useful to understand all the debt of the consumer as it all has a bearing on your enrolled debt from the perspective of the debt collector.
Debt collectors use many data points to determine the work standards for each account and often down to the account level. By appending the file with lots of data collectors segment the portfolio based on different factors and create workflows for each segment. They segment by age of debt, balance, original creditor, age of the consumer, enrolled in debt settlement, Bankruptcy, homeowner, employed and many more data points. As debt settlement companies begin to understand these factors they too can build strategies to match each segment determined by the debt collectors.

Do you want to learn more about this subject and how you can ramp up your debt settlement processes and reduce the time to settlements? Contact Phillip W. Duff at 904-687-1687.

What if the debtor lived on the moon?

How do I think “out of the box”
First it is necessary to define the meaning of thinking “out of the box”. Most people use traditional methods to solve traditional problems, thinking out of the box is the term used for the people who use untraditional methods to solve traditional problems. The term is used to describe any method that is not previously been used to solve the problem currently at hand.

Most thinking out of the box is actually intentional brainstorming to solve a problem although a percentage of the unconventional solutions are the vision of someone involved in the process.

How can train my group to think “outside of the box”?
Not all people are visionary or able to see solutions to their everyday problems. Most employees are far too engrossed in the daily affairs of their position to spend any time trying to make it easier to accomplish. They do their job and exactly as they were taught without questioning whether it is the best way to perform the task. Yet some employees always see a better way to accomplish every task these employees are generally able to over produce their coworker by improving the processes within their own job parameters.

People can be taught how to think in a diverse manner but it will always be easier for that percentage of employees who have the vision to do so. As a manager it is imperative to deploy the right people to the right situation and therefore using the visionaries to help you create new ways to solve old problems is a win/win situation for the business and employee. By the using creative thinking you can learn to think in a more visionary method.

One of the most common tools used in brainstorming in the Six Sigma methodology is the use of “what if?” in this exercise after defining the problem you asked “what if the problem existed”, on the moon?, underwater?, below freezing temperatures?, within a culture of caveman? or any other off the wall suggestion. This exercise may bring on many answers that will not be helpful to solve your current problem but it will begin the group of employees to think about the problem in a different manner. This is essential to thinking out of the box.

Creating a culture of visionaries
So how can you create a culture of visionaries, it will probably be difficult to create a complete culture of people who are forward thinking but with the deployment of the proper personnel to the proper projects and you’ll be able to come up with ideas that are “out of the box”. As this culture is formed it will slowly grow, the non-visionaries will see what the visionaries have been seeing for sometime and they will learn to think in unusual patterns. This is when all problems within the culture will be approached with an “out of the box” solution.

There will always be room for traditional solutions to traditional problems but the visionaries who can see solutions no one has thought of will be the ones who succeed at business. The debt collection industry is full of people who have been doing the same job the same way for decades, technology is the only major transformation in the debt collection process in decades. But many young and new entrepreneurs beginning to come into the collection industry with new ideas and new ways to skin the same old cat things are changing and new methods are emerging.
Reprint from Beacon Alert January 2006

Can you get paid and hug the consumer at the same time?

With the consumer friendly environment that currently exists with regulators, the debt collection industry also needs to create new ways to soften the image of debt collection while increasing its effectiveness. How? Implementing the use of Emails and Text messaging. By using electronic communication channels to interact with the debtor, we can also send consumer friendly content to the debtor to give them helpful tools to live closer to their debt-free-life goal. Also, providing value and extra help and care builds a relationship with them. Sharing links to consumer education sites that discuss unbiased facts about bankruptcy, disputes, settlements and the advantages of paying their bills also establishes trust. Plus, these communication channels are so inexpensive in comparison to outbound calls or letters that the collector can send friendly notices along with dunning letters. Equip your consumers with valuable help at the same time you ask for payments so they see they are also bettering their own life, and not just repaying a debt alone. Show them benefits.

Imagine an email to the consumer that provides a link to a credit bureau article that explains how much their credit score can improve by just paying off the collection accounts along with a note that says “Click here to see the discount we are offering you if you pay your bill today!” The discounts could be 25%, 54% or up to 74% off your current balance. “CLICK HERE TO EXPLORE YOUR OPTIONS”

Also your dunning notices will seem softer with images of consumers happy and soft colors in the email template. Additionally, you can change the dunn to softer tones that drive the consumer to self cure at your payment site by ‘clicking the button’ or ‘talk to a collector’ by clicking the other button. By driving the consumer to self cure or create an inbound call themselves,, you reduce the compliance issues and the need for so many outbound calls.

What help to show your consumer’s what’s in it for them, paying off their debt? We’ll show you and set you up with a consumer friendly email campaign. You’ll feel great too. Give me a call at 904-687-1687

Phillip W. Duff
Lighthouse Consulting

Now your using your head for something other than a hat rack.

What can Jim Tom from the well known TV series Moonshiners teach us in the ARM industry? Well, first of all we need to learn to think about collections from a totally different point of view: to use our brains. So first, let’s explore what the issues are; growing regulations, compliance, lower profits, higher expenses, consumer attorneys and well that’s enough for now. So how do we overcome those hurdles: reduce costs, automate, build compliance and increase collections.

We have taken the whole industry and put its issues and solutions in one paragraph, but what’s next? Jim Tom would say “it’s time to figure out a MacGyver solution”. Moonshiners were and are some of the most ingenious people in the world. They have been hiding jugs of moonshine in cars and other vehicles for decades. They have figured out how to make moonshine in the middle of the woods with no electricity or running water. They learn to solve problems by looking around and finding a solution using objects and tools that were close by to their still site.

It is time for the industry to start using its head for something other than a hat rack and realize that change is what needs to happen in the industry. We will have to look for new ways to reduce costs, to automate collection processes, to build processes that are 100% compliant and ways to drive collections.

Bill collectors tend to look at problems like bill collectors, and it is time we start looking at them from the side of the consumer. We must find consumer friendly ways to collect outstanding debt, which means we must allow the consumer to interact with us in a manner that he or she prefers.
Surveys have clearly shown that consumers prefer to deal with debt collection online as opposed to direct human interaction. Collection agencies and collection law firms need to move towards a self cure solution, providing the consumer a payment site 24 hours a day, and communicate with their preferred way, perhaps a smart device, via text. It then becomes the job of the collection agency to drive the consumer to directly that payment site to self cure the bill. Only consumers who have disputes are more difficult because they most likely have questions that need humans interaction. And, those will be inbound calls reducing the compliance issues tremendously.

In order to drive that consumer to the payment site or the inbound phone call, we will need the consumer to opt-in toan email or texting campaign. This is where we can hug the consumer by educating them and establishing a relationship in addition to driving them to self cure. Due to the very low cost of these electronic communication channels, we can now look at communicating with the consumer in a much different and better way that is much more friendly from the view of the consumer but the regulators as well.

The next evolution of Debt Collection is implementing automation using email and texting channels and the types of messages that will be used to drive those self cure solutions. If you are looking for the next evolution of debt collection and want to grow your business starting today with new automation, call Phillip W. Duff at 904-687-1687.

Jim Tom would likely suggest a snort of shine and a little deep thinking about now.

The CFPB makes me feel like when I just left my house and the firetruck went the other way with full sirens.

It amazes me the power the CFPB has and is exerting on the debt collection industry as a whole. As a consultant daily, I am looking for ways to help protect my clients yet, still allow them to make some money. At times it seems like no matter what we do as an industry, the firestorm may still hit at any minute. Like when you just left your house and you know you turned off the coffee pot, heater and such, but when the firetruck blazes past you headed back in that direction and you begin to doubt your efforts at fire prevention or what I call, “CFPB prevention”.

Unfortunately, it’s not what you have done wrong that will be your downfall. It is just timing and location as much as anything or any fault. If you’re in the path of an unhappy consumer that gets past your public efforts at a complaint opportunity, and the consumer gets to the CFPB or a consumer lawyer, it will cost you money, whether you are at fault or not. The fire can burn your house just because it existed.

So what do we do? The answer? All that you can! Don’t just hope nothing happens to you that your ‘too small to matter’ because at some point, you will be wrong. You have to find as many ways as possible to reduce the risk by directing the consumer to complain to your website, staff or anything except the CFPB or a consumer attorney. You have to do ALL possible to train your staff and write policies that reduce the risk, no matter the size of your business. You have to look for vendors that can help with things like voice analytics and litigant debtor scrubs, or automation platforms that help mitigate risk.

What I suggest is you hire a consultant or outside agency to review your current policies and suggest improvements to the same. Sometimes you may need a compliance auditor and sometimes just a smart consultant, but often both.

Call me to learn more about how Lighthouse Consulting can help your business avoid the pitfalls of compliance failures.

How does a debt settlement company decide what debt to settle when and why?

Debt settlement companies seem to fit into one of two categories when it comes to analytics. The first and more common are the smaller debt relief agencies that are working from a canned software package or a CRM designed for other business lines. The second are the very large companies that are working from propitiatory systems they have developed or built out to work within another system with much expense.

So let’s discuss first how the big guys use that fancy system to increase profits, reduce time to settlement and decide which debt is ripe and what is still being worked First, the big guys have data integrity. They have built the systems to accommodate the data in which they will be using later in the decision process. And, they have protocols in place to make sure the data is clean. In contrast, many smaller companies have dirty data from the intake process that continues to degrade to a point that it i no longer mineable.

For example, let’s explore the infomation taken from the consumer at enrollment, specifically the debt enrolled. The smarter companies have standardized their data so it’s consistent. The smaller guys see a Chase Air Mile card branded with Southwest Air logo and a Chase Aspire card the same way or actually in several analytic columns. The smaller company who has no standardization automation in their system will likely have those two accounts listed above entered into the system as the following options;
• Chase
• Aspire
• Southwest card
• Chase SW

And many more…

So, you can see how the data is now dirty and any decisions downstream in the settlement process made from that data are flawed. By having no standardization or standardization automation, the data is corrupted.
One of the next differences is that technology makes the big companies append data to the consumer’s record which help them make decisions. Some of the data is just more accurate data from a credit bureau or address updates, but also some of the data mimics what the debt collectors has appended to their file. Data such as: ;

• Fico score
• Home ownership
• Income per zip
• Employment status
• Days since charge off