A Credit Manager’s Journey Never Really Ends

By Nancy Seiverd, President, CMI Credit Mediators Inc.

A credit professional colleague of mine was working as the Director of Global credit for many years at a large Fortune 500 global company. The department was quite sophisticated and took advantage of a wide range of credit tools, information, and technology to evaluate and monitor credit decisions. Additionally, as the company was selling a niche product in a marketplace that had very few competitors, they could “call the shots” when it came time to extend credit to new and existing customers.

Like many big organizations, retirement is often at an established age limit and at the ripe old age of fifty-nine, my colleague was given his thirty-year plaque of appreciation and was asked to enjoy his golf game. However, with thirty years of wonderful and unique international global credit expertise behind him, and still feeling like he had a lot of “juice” to offer, perhaps another “encore career” in credit would still be in the cards.

Within about six months my colleague found a new position as the credit manager for a domestic mid-sized company that was a supplier to the retail industry. It was a huge change from the previous behemoth global organization with its tens of thousands of employees and offices all over the world. In addition, it didn’t have the thousands of customers that required credit monitoring — maybe only a few hundred. Furthermore, it didn’t have a niche product and had to bid against a lot of competitors to procure and keep its customer base. Finally, the new place of employment had a more casual and unstructured atmosphere in which the lines between departments and job titles were blurred. Without question, it was a much different place to hang his credit hat than what he had been used to for thirty years.?

About two weeks after entering the new company, my colleague was hit with his first credit revelation. I use the word “revelation” rather than “decision” because the president was able to contract with a well-known retailer, requiring almost 120-day terms, and merely informed the new credit manager of his decision. This was something that took my colleague’s breath away. At his previous company, no matter how big, famous, and financially profitable a new customer was, they still had a procedure for compiling, confirming, and evaluating all kinds of credit information. However, my colleague soon realized that the highly competitive environment which his current company was struggling in required that decisions to sell and grant credit be made quickly, especially since the competitor down the street would certainly step up to the plate if they didn’t.

As the months went by and my colleague settled into the new pace, he realized he needed to modify his credit decision and operating style which included:

Flexibility?- In his past environment, my colleague’s role and that of his subordinates were all very defined and rarely did anyone step outside of what they were instructed to do. In addition, because of their niche market advantage, they had the luxury of time on their side. In view of the current smaller business scale and tense competitive environment, credit decisions must be made quickly, often without all the credit?information at hand, and even at times making a “shoot from the hip” credit decision. My colleague came to realize that along with the need to be speedy in his credit decisions, some determinations resulted in accounts becoming considerably delinquent. In his previous organization, he and his credit team rarely had a past due customer and if?they did, they did not get directly involved in calling – instead sending it over to the collection department. However, here at the new place, rolling up one’s?sleeves and getting your hands dirty is all part of the job.

Personal Involvement?- It often seems that the smaller the organization, the more closely the team from different departments and sections must work?together. The accounting manager may at times be involved in aspects of credit and the credit manager may find him/herself involved in accounting and sales. My colleague has been pleasantly surprised how he has been roped in to be more involved with the sales team and their efforts. This has given him a new appreciation for their challenges and a better understanding as to how and why certain credit?decisions must be made.

Technology?- Big organizations usually run on big platforms of all kinds and that also goes for the credit risk management function. Having been exposed to a wide range of credit tools, controls, and systems, my colleague has come to understand that a simple and more personalized credit approach to making credit decisions is what’s important. Nevertheless, he has been able to experiment and implement ideas from his previous experience that have greatly improved the?current?credit risk management system.

Adaptability?- Even after an illustrious career of thirty years in credit that culminated as Director of Global Credit, my colleague has reached the conclusion that at his new company he’s a “work-in-progress.” Although he?learned a tremendous amount from his previous career, his new company, with its own set of unique products, competitive environment, employees and customers, has given him a whole new credit mind-set.

Wishing you well on your own credit journey.?

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