Ten Tips on Managing Change in Credit

Change is inevitable.  Why?  Because it is the way people, departments or companies adapt to changing conditions.  Implementing new ideas can increase productivity.  Change is disruptive, but experienced credit professionals should be equipped for and accustomed to managing change.  Some of the many factors driving change include:  Regulatory changes, Competitive changes, Cuts in sales, Cuts in funding, Mergers, Acquisitions or restructurings. Here are some ideas on managing change:

1. Change involves exploiting opportunities to improve the performance of the credit department.
2. The process begins by identifying a business problem that can be corrected through change.
3. It is importan not to attempt to make too many changes too quickly.  (Note that there is some debate about this statement.  There are those who believe that incremental change or improvement based on the Japanese model for improving effectiveness and efficiency is outdated.  These detractors of incremental change argue that breakthrough change capable of helping departments and organization to leap ahead of their peers and competitors is more desirable than slower incremental change.  The problem is that resistance to change will intensify if and when breakthrough changes are proposed or implemented). 
4. Try not to impose your ideas about changes on the department.  Instead, try to develop solutions with the members of your department who will be directly affected by the change. Consider forming teams to evaluate the proposed changes in order to reduce employee resistance to it.
5. Clearly articulate the need for and the goals of changes being implemented.  Without this information, team members will not be highly motivated to support the change initiative.
6. Give individuals specific roles and assignments relating to implementation of the change, ideally roles that are consistent with their skills, interests and expertise.
7. Make certain that assignments are clear, concise, coordinated and comprehensible.
8. Managing change properly includes a willingness to revise plans as challenges emerge or conditions change.
9. When there is resistance to change, encourage those directly affected to express their concerns and misgivings about the change or about the change process.
10. Recognize resistance to changes as another aspect of the change process rather than as a challenge to the merits of the change process itself.

Change needs to be well managed because it causes confusion, anxiety, skepticism, distrust, apathy, anxiety, and stress among employees leading to lower productivity. Clearly, a strong argument can be made that the most important element in managing change involves managing the change process for the process for the employees most affected by it.  Why?  Because resistance delays change.

© 2009 by Michael C. Dennis.  All Rights Reserved