Jeff Judy

Jeff's Thoughts - September 5, 2018

Values, Words, Deeds

A couple of issues back, I wrote about the "values" your institution may embrace, the core beliefs and principles that are intended to guide practices throughout the organization. I discussed "top-down values", the official list that comes from your leadership team. And I suggested that you compare these with the "bottom-up values" your staff, especially your newest employees, might see in action at the front lines.

The question was, if you didn't have an official list and had to deduce your institution's values by observing staff behavior, what would you come up with? And would your deductions land close to the official list?

The key element in the question above is "behavior". It isn't enough to pay attention to what colleagues and managers say as they do their work. It's a matter of "do as I do, not as I say," because as I talk to credit staff at all levels across the country, I find that many of them are using the same vocabulary without necessarily engaging in the same actions or holding the same standards.

Take a word I hear everywhere: "relationship." Credit is all about building relationships, often with an aim to generating customer loyalty.

But how do you define "relationship"? We know that at some institutions, a relationship is defined by the number of products and services the customer pays for. More wallet share equals a better relationship, pure and simple.

In this scheme, loyalty is generated by these entanglements, if you will. The customer stays with you because it is difficult to unravel and move all those products and services.

If this is your definition of a relationship, that's perfectly fine, just be honest about it. If your notion of relationship is more oriented toward customer satisfaction with how they are served, your training and guidance needs to be different from what you would offer from a wallet-share perspective.

Or consider exceptions to credit policy. Some institutions require minimal documentation and justification for exceptions. Others require thorough documentation, in the credit proposal, of any exceptions.

But there are institutions where thorough documentation is required, not to help make a better credit decision, but for "cover your butt" reasons. If all exceptions are well documented, and virtually all exceptions are approved, that says something about credit standards.

I believe that the vocabulary used in your credit organization is important. But I also believe that the right vocabulary is not enough to ensure good performance. What that vocabulary really means is revealed by the associated behavior.

Make sure your credit deeds match the words, and the values, that describe credit practices in your organization.