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Leadership in the Credit Department
Leaders vs. Managers
by Michael C. Dennis M.B.A., C.B.F.

Some credit departments are headed by managers, and others are led by leaders. There is a marked difference between the two. For example, leaders guide by example. Managers may follow the old adage: Do as I say, not as I do. However, leaders usually do not expect subordinates to work any harder or any longer than they do.

Leaders share the credit when things go well and accept the blame when they do not. Managers tend to take the credit and pass along the blame. When things do go wrong, a leader will immediately begin to look for ways to minimize the negative impact on the company and its customers. A manager will immediately look for something or someone to blame.

A credit manager who is a leader will develop and encourage his or her subordinates. A manager is someone who may actually be intimidated by smart, hard working subordinates. A manager is less likely accept ideas from subordinates, and is more likely to surround herself or himself with mediocre employees. Leaders in the credit profession cajole, coach, counsel, and if necessary terminate substandard employees. Managers tend to tolerate marginal performance on the job.

Leaders enjoy challenges. Managers tend to avoid them. Leaders in the credit profession are willing to take a chance on an employee who has made a mistake and appears to have learned from it. A manager is more likely to terminate that employee as a "lesson" to others [presumably, the lesson is: Never make mistakes, but alternatively the lesson might be: Never admit to making a mistake to anyone.]
Managers stay on the beaten path. Credit department leaders are individuals who are willing to break new ground, try new things, and even break rules that do not make sense to them --- because leaders are willing to accept the consequences of their actions.