Jeff Judy

Jeff's Thoughts - June 13, 2018

Committed To Communication?

We all know that effective communication is crucial to our success. In the credit industry, good internal communication among team members reduces costly mistakes, enhances the credit process, and ensures that sound decisions are made, sound actions taken.

And even more importantly, clear communication with customers (and potential borrowers) leads to stronger customer relationships at the same time that it avoids ugly surprises for both parties.

Now, I can go around the conferences and events where I present and ask a hundred people from a hundred institutions about communication and one hundred of them will tell me that effective communication is very important. They will all agree that their own institutions are "committed to communication."

But what does that mean? Follow a credit from the initial request to the final decision and you'll discover that most of the steps in the process receive explicit attention. Credit analysis, to take one example, draws plenty of training, guidelines, specific tools, and clear standards.

In other words, the "commitment to sound credit analysis" is revealed by the resources – time, energy, and yes, money – that are applied to prepare people to do it properly, and to hold them accountable for their work. We can point to actions taken to ensure that analysis is done well, that it contributes to the success of the institution.

What can you point to to show that "communication" is taken equally seriously? At most institutions, the answer is, "not much." But even though "communication" is always going to be a broader concept than, say, "credit analysis," you can improve this part of the process for better overall outcomes.

First, identify key interactions where better communication could pay off. Relationship manager – customer is an obvious one, as is analyst-relationship manager. But there are others, and you need to know where to focus your efforts to enhance outcomes.

Second, identify criteria for effective communication in these roles. What would tell you that communication worked? What would tell you that it was weak?

Third, determine how you will assess effectiveness. This isn't always easy, but it may entail customer interviews or surveys, staff feedback, and so on.

Fourth, regularly administer explicit training on communication, including hiring outside expertise if necessary. Saying "communication is important" over and over again does nothing to improve communication skills. Explicit skill development is the best way to make sure these important interactions contribute to your overall success.

You wouldn't tell analysts that "good analysis is important" and then leave them to develop sound analytical skills on their own. Take a more disciplined and consistent approach to identifying and enhancing the communication component of your credit process, and you'll end up with happier (and more loyal) customers, a more efficient (and less stressful) credit process, and just possibly, a big advantage over your rivals in your marketplace.