Outstanding Credit Culture


Just as individuals need a set of values (virtues) to guide their actions, systems should be designed to have a set of attributes which optimize their performance towards the goals. In this regard, the credit culture should have seven fundamental virtues:

  1. Provide fundamental insight to help clients achieve their economic goals and solve their financial problems.
  2. Responsive: the client deserves an answer as quickly as possible, even when the answer is no.
  3. Flexible (creative): commit to finding better ways to meet the client’s financial needs.
  4. Reliable: select clients as long-term partners and treat accordingly.
  5. Manage risk with agreed upon limits. Clients do not want to fail financially, and you should want a bad loan.
  6. Ensure an appropriate economic return to the firm for risk taken. The higher the risk, the higher the return the lower the risk, the lower the return. This is the expression of justice.
  7. Create a “premium” for service delivery. The concept is to provide superior value to the client through outstanding service quality.

My Consultancy–Asif J. Mir – Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, and my Lectures.

 

Advertisements

Leadership Styles


An effective leader recognizes that there are variations in leadership styles. The three basic styles are autocratic, free rein, and democratic. Autocratic leaders make decisions on their own, without consulting others. Democratic leaders involve their subordinates in making decisions. Free-rein leaders believe in minimal supervision, leaving most decisions to their subordinates.

The best leadership style is one that varies with the circumstances, changing according to three elements: the leader, the followers, and the situation. Some leaders are simply unable to encourage or even allow subordinates to participate in decision making. And some followers do not have the ability or the desire to assume such responsibility. Furthermore, the particular situation helps determine which style will be most effective. Problem requiring immediate solutions may have to be handled without consulting subordinates. With less time pressure, participative decision making may be desirable.

A democratic leader may be forced by circumstance to be autocratic in making a particular decision. Managers are increasingly moving toward a more democratic style of leadership. They find that workers involved in decision making tend to be more interested in the overall organization and may be more motivated to contribute to organizational objectives that those not involved in decision making.

No single best style of leadership exists. The most effective leadership style depends on the power held by the leader, the difficulty of the tasks involved, and the characteristics of the workers. Extremely easy and extremely difficult situations are best handled by leaders who emphasize task accomplishment. Moderately different situations are handled by leaders who emphasize participation and good working relations with subordinates.

My Consultancy–Asif J. Mir – Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, and my Lectures.

Statistical Analyses


The role of database is to help select names for modeling, implement the results of the modeling process by scoring names and assigning them to the appropriate decile, and selecting names by decile and other criteria for marketing programs. Most companies use statistical analysis for two principal reasons: a) segmentation, and b) predictive modeling.

Segmentation techniques are used to identify and profile groups of customers whose characteristics are similar. If the objective is to segment customers based on their performance, then the procedure is to group people according to their performance characteristics and then develop profiles of each performance group. Typical segmentation variables are performance measures such as recency, frequency, and monetary value of purchases; types of products purchased; or types of promotions responded to.

By linking this data with customer performance data, marketers can analyze who buys what and use the profiles of customers in each segment as a means of finding other customers like them.

Once the segments have been created, individual customers will be assigned to segments and these assignments will be recorded in the database. This makes subsequent selection of individuals for promotion based on the segmentation criteria relatively simple.

Predictive Modeling, based on previous purchase history, based on recency, frequency, and monetary value, models can be developed to predict who is most likely and least likely to purchase at the next opportunity. This scoring model would be used to determine who should be promoted and what they should be promoted with.

Once scoring models have been executed and customers assigned to deciles, this information is recorded in the database so that subsequent selection of customers who have the highest probability of responding to a promotion is easily accomplished.

End users would use a selection menu in which they would indicate which scoring model they wish to use and either a specific cutoff score or a desired number of names to select. The database would then perform the selection and produce an output file to the specific medium. This would either be a file, a magnetic tape, or mailing labels. A file could either be used for further analysis, or in many cases, the file could be combined with a patterned letter file to produce personalized mailings.

My Consultancy–Asif J. Mir – Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, and my Lectures.

Balancing Planning Efforts with Day-to-Day Demands


Managers often allow day-to-day activities to capture their attention while planning and strategy fall by the wayside. Use the following suggestions to ensure that you carry out your plans and spend the time you need for planning:

a)      Keep a log to determine how you are spending your time. Evaluate your time allocations to ensure that you are giving proper time and attention to the “big plan.” Consider delegating more.

b)      When you are faced with many demanding and competing priorities, ask yourself which are the most important ones and make them your first priority. When an urgent matter arises, determine how it fits into your daily plan (is it urgent and important, or simply urgent?) and act accordingly.

c)      Use the 80/20 rule, which states that 80 percent of the value of a group of items is generally concentrated in only 20 percent of the items. Simply put, the 80/20 rule means that you can be 80 percent effective by achieving 20 percent of your goals. If you have a daily “to-do” list of ten items, this means that you can generally expect to be 80 percent effective by successfully completing only the two most important items on your list.

d)     Use a software planning package to plan complex and multiple projects. These tools will help you keep track of what needs to be done.

My Consultancy–Asif J. Mir – Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, and my Lectures.

The General, Industry, and Competitive Environment


Through an integrated understanding of the external and internal environments, firms gain the information they need to understand the present and predict the future.

 The general environment is composed of elements in the broader society that influence an industry and the firms within it. These elements can be grouped into six environmental segments: demographic, economic, political/legal, sociocultural, technological, and global. Firms cannot directly control the general environment’s segments and elements. Accordingly, successful companies gather the types and amounts of data and information that are required to understand each segment and its implications so that appropriate strategies can be selected and used.

 The industry environment is the set of factors—the threat of new entrants, suppliers, buyers, product substitutes, and the intensity of rivalry among compititors—that directly influences a firm and its competitive actions and responses. In total, the interactions among these five factors determine an industry’s profit potential. The challenge is to locate a position within an industry where a firm can favorably influence those factors or where it can successfully defend against their influence. The greater a firm’s capacity to favorably influence its industry environment, the greater is the likelihood that the firm will earn above-average returns.

 How companies gather and interpret information about their competitors is called competitor analysis. Understanding the firm’s compititor environment complements the insights provided by studying the general and industry environments.

 In combination, theresults of the three analyses that are used to understand the external environment influence the development of the firm’s strategic intent, strategic mission, and strategic actions. Analysis of the general environment is focused on the future; analysis of the industry environment is focused on understanding the factors and conditions influencing a firm’s profitability; and analysis of competitors is focused on predicting the dynamics of compititors’ actions, responses, and intentions. Although we discuss each analysis separately, performance improves when the firm integrates the insights gained analysis of the general environment, the industry environment, and the compititor environment.

 My Consultancy–Asif J. Mir – Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, Line of Sight

Next Newer Entries