Today's collection centers are complex departments that are continuously evolving. Grappling with a period of profound change, executives are experimenting with new strategies.

But when it comes to turning these high-tech collection centers into workaday departments that consistently cut costs and raise employee productivity, the track record is dismal.

One major U.S. manufacturer recently decided to unplug an expensive predictive dialing system because the collectors consistently performed below expectations while working on the dialer. It wasn't the technology that was lacking, however.

The problem was that credit executives overlooked the human factors necessary for success - those of incentive, motivation, and morale - and failed to include collectors in the business planning process.

Yearning for Stability

Collections is a process of continuous adaption to unforeseeable events, to contingent circumstances which cannot be forecast. One would think that precepts like stability and control are all but irrelevant in the collections environment.

Ironically, though, collectors as a group yearn for stability and tend to resist change, preferring instead to maintain old work habits. There is reason for this mindset.

Kept outside the company's core business systems, the collector works in a different world, foreign to the competitive issues other members of the organization face.

What matters is the bottom line - how much they have collected from delinquent accounts this month.

From the collector's point of view, outside expectations seem to climb higher and higher. Collectors often react by raising barriers, closing ranks, and seeking stability and control.

High Turnover

The most visible effect of such an environment is an alarming rate of turnover within collection departments.

Many collectors feel they are expendable and do not see themselves as members of their company's learning organization.

Virtually everyone agrees that senior collections executives must focus on technology to improve productivity and control costs.

Collections, as we know it, is on the verge of drastic change and managers are allowed only a small margin of error.

Perhaps for the first time in the industry, the collections department is being asked to increase effectiveness in the face of cutbacks. But the technological advances cannot be adopted in a vacuum.

To succeed for the company, the department must make sense for overall business goals, and must be understood and embraced by the collectors who will implement the strategy.

Understanding Their Role

To help collection centers become better learning organizations, credit executives must explicitly address the mindset. One way to challenge it is to create a culture committed to honest, open communication, to include clear discussions of the competitive issues facing the organization.

Once collectors understand their role in the organization's struggle to compete, they begin to ask questions such as "Are we as smart as the competition?" "How can we help our company achieve a competitive edge?" "What can we do to raise our corporate intelligence?" "How can we learn to adapt to technology faster?"

Collections, as a separate internal department, may very well cease to exist as these functions are taken over by outside providers in the future.

But for now, the squeeze is on and the collector is being asked to be the change agent. Change agents, no matter what the field, are often shot along the way, and collectors know it.

Most people can accept the idea of continuous change if they understand why performance improvements are so vital to their organizations.

There always seems to be a gap between the creators of change and those who are expected to live with the change.

Developing a learning organization is most effective way to narrow that gap.

The Partnership

Unless collectors are made part of the learning organization, enhancing technology will not in and of itself achieve the goal of boosting collections while reducing costs.

Savvy collections managers understand that the only way to sustain a competitive edge is to develop a strategy that allows collectors to look outside the corporate boundaries and to take on the role of partners.

Mr. Wallace is a partner in Wallace & DeMayo, a recovery management firm based in Atlanta.

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