Nobody wants to do it even though they know they’ll be better on the other side
I have been a consultant to the debt collection industry for over a decade and it still amazes me why so many CEO’s, owners, managing partners and staff are resistant to change. Despite the fact that they all proclaim loudly that they need to find new and better ways to perform many tasks, most will not do what is required to make the move to change. It is like the person who knows they have a drug or alcohol problem and agrees the best solution would be to go to rehab to learn new ways to manage their addiction, but never follows through to make the commitment to do the hard work to actually get better. Over the past decade, I have met with and analyzed many companies purchasing and collecting debt. I have had extensive discussions with CEO’s, managing partners and staff who all had no problem identifying areas of the business that were in serious need of improvement, but most of the time, they fail to follow through to make the commitment to do the work to achieve their intended goals.
The clients that finally call me to work with them to improve their businesses usually tell me they wish they had done it much earlier, just like the person completing rehab proclaims they should have gotten clean much sooner. So why are these very smart, successful CEO’s, owners and staff members so hesitant to change? It is part of the inherent entrepreneurial traits that are needed to be an owner or managing partner of a collection entity. These individuals have gotten where they are based on their knowledge and drive, and most have done it on their own. Few successful people became successful by relying on other parties to help make decisions about their company’s direction, but those that have sought wise counsel along the way are usually more successful than most.
Recently, while speaking with a prospective client, he made a statement that really cemented this hypothesis in my mind. He said, “I have a CPA, MBA and Law degree and after all that schooling I learned just one thing. The only way to learn something is to learn from other people who have already done what you want to do.” This was quite a statement from a very successful debt collection lawyer and it’s very true. As a consultant I have learned the same thing, and most of my knowledge and skills I have acquired over the past 20 or so years has come from my mentors, other consultants that I learned my craft from and my clients.
With every consulting project I complete and every conversation I have with industry professionals I learn something. I possess the level of knowledge that I have only from those interactions. The advantage that I have over most owners and CEO’s in the industry is the sheer number of agencies, law firms and issuers I have worked with over the years. In my career as a consultant and previously as an auditor I have probably worked with over 200 clients. Whether I was engaged as an auditor or as a consultant, these agencies and law firms have opened their processes up to me and I have been able to quickly determine which are best practices and which are liabilities. While each client is unique in some way, the things that work usually work for the vast majority of clients, and the mistakes that are being made are usually made by most of my clients as well.
I can name several debt collection entities that have embraced the idea that they do not have all the answers and have used consultants, staff and any other continuing education programs to remain relevant, competitive and profitable. The most successful have small egos and a big desire to learn and grow in a market that continues to be more and more competitive. I have seen improvements of 10%, 20%, 40% or more from companies that have routinely utilized outside consultants to help them, as opposed to those that relied only on the CEO’s vision and existing level of knowledge.
So why are some willing to embrace change and the search for better processes and others not? Let’s discuss the unwilling first. They generally know that change is required or at least needed, but they either think their staff will not be responsive to change, or they believe that the change will be too costly from a financial or time perspective. Many times when I meet with a prospective client at a conference, they have an excuse as to why engaging an outside consultant to address operational efficiency won’t work; just like the person who is resistant to commit rehab. If you think your staff is reluctant to change, fire them! If you believe the change is too costly, see what happens when you do nothing in today’s marketplace. The reality in today’s market is that fewer and fewer firms are competing for a smaller piece of the pie.
When you look up the word change in the dictionary, it speaks of modification, altercation, amendment, transformation, conversion and revolution. Change can be voluntary or involuntary. The collection industry is now undergoing involuntary change at the hands of regulators because it would not change voluntarily. Sometimes it takes a revolution to create change and sometimes it just takes desire. The CEO’s, staff and managing partners that embrace change will see drastic improvements that will be positive for the business, the owners and the corporate culture while the companies that are changed involuntarily will see negative impacts on staffing, process and culture.
If you desire to make change to your organization, culture, profits, process, attitudes and longevity, then embrace change and look everywhere for it. Hire consultants, read books, attend conferences and find ways to learn and change. If you desire to keep talking about change and never doing anything to reach your goals, then prepare yourself and your company for defeat in today’s marketplace. Today the industry is waiting for the few that will survive and thrive in the new collections environment. Will you be one of those coming out on top?