Adapting to Change is Never Easy

I was reading an article in my local paper about a successful business owner who started a service business in his basement and was able to grow it into a $200 million company in 10 years. The article reminded me of many debt collection agency owners I know and how they got their start.

This owner was described as someone with a passion for the business, a strong intellect, good salesmanship, willingness to take risk, and lots of drive. What struck me as the most important element of success, however, was his ability to adapt to change.

Just running a collection business is challenging enough, but then you must also contend with the economy and all its gyrations; keep up with stricter, more costly state and federal government regulations; and be ready to adapt to whatever will happen tomorrow. Navigating through all of the “landmines” the world throws at you on a daily basis is never easy, but it is really what separates the strong from the weak.

How have you adapted? Was there a moment in your life that drove you to change the way you were running your agency? Perhaps it was when you realized that a long-time client was right when he said you were not giving his company good service. Maybe it was when you finally decided to terminate an otherwise productive collector who kept pushing the compliance envelope with debtors – or when you came to grips with the fact that you have taken your agency as far as you could.

These types of “turning points” are critical to your development and that of your agency. When they occur, don’t let them pass by. Trust your instincts and take a step back to figure out what action is needed. Sometimes all that is required is a small adjustment, like changing the way a collector communicates a Settlement in Full offer to a debtor. Other times they may require courage of conviction, like telling a client that you can’t take on more volume unless you have a higher fee rate.

I know of one agency owner who faced a turning point when he learned he’d be losing a substantial amount of business from a major client. In this case, it was a hospital client who’d been with him for ten years and represented 20% of his overall net revenue. The owner had known for some time that this client was considering bringing its early-out placement stream in-house. This placement stream represented a majority of the work the agency was receiving and was also the most profitable. Despite knowing this potential risk, the owner stayed with the status quo and did not take any action – until he was forced to!

All agencies should be aware that their clients are internally trying to figure out how to be more efficient with A/R these days. With the loss of these early-out placements, this owner is now trying to change the direction of his business. He hired another sales person and is aggressively going after new clients, cutting overhead, sub-leasing some of his office space, and is adding additional billing services for his clients.

You can’t be stagnant in this industry. If you do, your competitors will pass you by. The best approach is to be proactive – embrace change head on – before you are forced to catch up to shifting conditions. I’m sure most of us have heard the story; it starts out with “I wish I would have…” or “maybe I should have…”

Whatever your “turning point” may be, take a hard look at yourself and your agency and ask yourself whether you are really taking advantage of all the threats and opportunities that are presenting themselves and adapting your business model accordingly. The most successful agencies in our industry embrace change – even thrive on it. They vigilantly manage their business as if they are always in a crisis and they are passionate about supporting their company mission.

How do you adapt to change? What was the mental trigger that got you to wake up? I would welcome the opportunity to hear your story, feel free to contact me directly; my contact information is below.

Michael Lamm advises owners on their growth and exit strategies for Kaulkin Ginsberg’s Strategic Advisory team. Michael can be reached directly at 240-499-3808 or by email. You can also read his blogs, follow him on Twitter, or network with Michael from his social media page on insideARM.com (http://www.insidearm.com/go/personalities/lamm).