Do you spend much of your time on very urgent matters, putting out fires?
If so, you are not alone. In fact, things have never been busier or more urgent for credit executives as we emerge from a year of uncertainty, a remote staff, and an awakening economy with new risks and unknowns.
Consider this: Stephen Covey, the author of "The Seven Habits of Highly Effective People," argues that if you are constantly putting out fires, you are a victim of what he refers to as the "urgency addiction." You create the illusion that you are being effective and in high demand as you rush around, extremely busy. But this frantic activity is only an illusion of effectiveness.” Are you and your team constantly putting out fires, or wasting time on low priorities to the detriment of core department responsibilities?
Take Another Look at How Your Team Sets its Priorities
This is a good time to re-evaluate the scope of responsibilities performed by your credit team and reevaluate priorities. Look at department activities based on their profitability to your company‘s bottom line and to yourself and staff. Is each activity essential, urgent, of great importance to the company, or in the critical path of a larger project where others are dependent on you to meet a deadline? Should your department be doing certain activities at all? Are there things done in other departments more suited for your credit team?
Are tasks assigned strategically to help develop you and your team to develop an experienced grid, for reassignment or promotion opportunities? Do department deliverables enhance the perception others have of your team's effectiveness and value? What does your boss think?
There is a difference between efficiency and effectiveness. The team may be doing things very efficiently, such as quickly resolving chronic and repetitive disputes. Effectiveness is how these issues are identified, corrected, and reduced.
The Best Approach is a Team Approach
Have a meeting with your team to identify every activity performed by the department. Assign priorities and review how much time is spent on each activity, and who is assigned.
- Involve everyone in the department.
- Brainstorm and whiteboard all department activities.
- Consolidate into major activity headings: (Collection calls, research, meetings, clerical filing, etc.)
- List who does each activity.
- List how many hours (per week or month) the individuals/department spend on each activity.
- Take a break.
Segregate team activities into three categories:
- Unimportant or Inappropriate Activities:
For activities that are not core to your department's mission. Why is your team doing this? Should this be assigned to another department? Are there no consequences if it were completed beyond the schedule requested? What would happen if it were not completed at all? It is purely clerical in nature where improved automation could minimize staff involvement.
- Important but Not Urgent Activities:
These are core and essential department responsibilities, but no specific timeline or deadlines are negotiable to be scheduled overtime. Think of things like routine credit reviews, investigation of root cause issues for process improvements, training, customer visits, building relationships with other stakeholders. - Urgent Activities
The consequence of not dealing with them is critical and immediate.
- Reconvene and Review
Confirm everything the department does is listed, and confirm the hours of staff time are correct. Calculate the percentage of total hours per week/month per FTE for each activity. Then assign a priority to each activity. This will outline the information needed to understand where too much time is spent on low priorities at the cost of higher priorities, and if team members are assigned the most appropriate tasks.
- Follow-up
Use this information to develop an action plan for improvement.
Conclusion:
Whether you have a credit team of one or twenty, this is a good time to assess department activities. Are you prioritizing limited resources on the right things? Take what you learn and make the needed adjustments.
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