"The credit department must operate autonomously
to be effective."
The credit department is part of the larger organization. Credit managers
that do not understand this basic idea will sooner or later find themselves
marginalized, or in dead end jobs, or worst of all terminated for their
failure to understand that every employee and every department plays a
role in helping the company achieve its short term and long term objectives.
"Don't sweat the details."
Big problems often start out as small ones. Big problems are sometimes
comprised of a number of smaller problems. Credit and risk management
requires attention to detail, so credit managers have no choice but to
sweat the details, and to make certain their subordinates do the same.
"Do as I say, not as I do."
Some managers feel that certain rules don't apply to them. For
example, they may arrive a few minutes late or take a long
lunch and justify it
to themselves because [a] they are exempt employees and [b] they frequently
work late. All their subordinates see is their manager bends the rules
- meaning the company's rules are "flexible." Credit managers
must lead by example.
"You can control credit risk through aggressive
This is like trying to engineer quality into a product manufactured on
an assembly line after the product has been produced, shipped and sold.
It is unlikely to work - except on Fantasy Island.
"Busy people don't have time to prioritize."
In reality, busy credit professionals cannot afford not to prioritize their
time. Credit managers that do not prioritize will soon find themselves
spending time on tasks that are urgent but unimportant. Their priority
Urgent and important, followed by
Important but not urgent, and finally