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First Community is a credible player in the market because of its history and the human resource policies of the company. The company invests in its employees and works to assure that turnover is low. The goal of this strategy is to develop a consistent, professional team that has more expertise than its competitors.
Whereas Jim Adamany, president and CEO, has a strong history in the industry and is a recognized expert in asset-based lending and factoring, First Community has one of the youngest staff and management teams in the finance industry.
In the banking industry, promotions are slow coming, because many banks employ conservative personnel programs. First Community, however, has recruited young, ambitious people who are specifically looking to grow with the company.
As the company grows, so will the responsibility and rewards for these young executives. In his early thirties, for example, Matt Vincent is a vice president; at only 28, Brian Zcray, is director of marketing.
Since First Community has a diverse product line, it must compete in distinct markets. Its factoring products compete with small specialized factoring companies. Factoring
284 THE OB SKILLS WORKBOOK
is a way for businesses to improve their cash flow by selling their invoices at a discount. Factoring clients are traditionally the smallest clients finance companies must serve. Education about the nature of the product is crucial if the company is to be successful since this often is a new approach to financing for many companies. First Communityís sales staff is well trained at understanding its product lines and acts as the clientís representative as they work through the approval process.
To assure the loans or factoring deals fit within the risk profile of the company, First Community must ask many complex financial questions. Many small businesses are intimidated by credit officers, so First Community handles all of these inquiries through the business development officers. The business development officers, in turn, must understand the needs of their credit officers, who are attempting to minimize risk to the company while maintaining a friendly rapport with the client. By centralizing the client contract through educated sales representatives, First Community is able to ask the hard financial questions and still keep the clients interested in the process. A potential customer can easily be discouraged by
a creditor administratorís strong questioning about financial background. Utilizing the business development officers as an intermediary reduces the fear of many applicants about the credit approval process. Thus, a sales focus is maintained throughout the recruitment and loan application process.
Internally at First Community Financial there is a continual pressure between the business development staff and the credit committee. The business development staff is focused on bringing in new clients. Their compensation in a large part is dependent on how many deals they can execute for the company. Like sales staff in any industry, they are aggressive and always look for new markets for business. The sales staff sells products from both the finance department and the factoring department, so they must interact with credit officers from each division. In each of these groups are credit administrators specifically responsible for ensuring that potential deals meet the lending criteria of the organization. While the business development officerís orientation is to bring in more and more deals, the credit administratorís primary goal is to limit bad loans.
The pressure develops when business development officers bring in potential loans that are rejected by the credit administrators. Since the business development officers have some experience understanding the credit risks of their clients, they often understand the policy reasoning for denying or approving a loan. The business development officers have additional concerns that their loans that have potential to be financed are approved because many of the referral sources of the sales staff will only refer deals to companies who are lending. If First Community fails to help many of a bankís referral clients, that source of
business may dry up, as bankers refer deals to other lending institutions.
These structural differences are handled by focused attempts at improving communication. As noted before, the First Community staff experiences an extremely low turnover rate. This allows for the development of a cohesive team. With a cohesive staff, the opportunity to maintain frank and open communication helps bridge the different orientations of the sales staff and the administration divisions. A simple philosophy that the opinions of all staff are to be respected is continually implemented.
Since approving a loan is often a policy decision, the sales staff and the loan administrators can have an open forum to discuss whether a loan will be approved. CEO Jim Adamany approves all loans, but since he values the opinions of all of his staff he provides them all an opportunity to communicate. Issues such as the loan history for an appli-