Ethics and Professionalism

by Robert Tavelli
Collector's Inc, April 1997

“There is no right way to do a wrong thing” In my agency, I demand this. This article raises a clarion call for honesty and integrity in your business, and in our industry. There is no in between, no gray area, when it comes to values, ethics, and the right way versus the wrong way in your business. In running your business, you represent your industry. Your represent my industry. How well do you run your agency? To help you understand this question, I will introduce my version of a different paradigm, what I call “The New Agency Model.” In doing so, I will give you a conceptual framework to gauge you agency’s success.

Why is this important? Because public perception is ultimate. Many businesses are not well run. In our own industry we respect our competition. We are concerned for our public image, and the damage done by the transgressions of a few. Positively stated, how many of us adhere in thought, word and deed to the most powerful internal Mission Statement possible, namely, the literal pledge under the California Association of Collectors? I do not believe the creed under the California Association of Collectors stands for something. I believe it stands for everything. Not only is there no right way to do a wrong thing is today’s consumer environment, the tolerance for doing the wrong thing, for doing something that is dishonest, is zero. Clients will eventually migrate to another agency that is honest.

Years ago, when first starting my agency, I worked by myself in a 500 sq. ft. of shared office space. At one new client’s office, I excitedly picked up two invoices for collection. Regretfully, I lost the two invoices. What would you have done? What would anyone in your agency do? Embarassed and upset, I instinctively did the right thing, the honest thing. I went back to the client and told the truth. I did not “misplace” the invoices, I lost them. They not have additional copies, and neither did I. What do I do? I paid on the full outstanding balance. The client, surprised, tried to make me fell better”:” At best, had you been successful, you only would have remitted 50% on our behalf.  Pay us 50% if anything.” “No,” I said. “If I finish this situation the right way, and pay you in full, I’ll never make this mistake again.”

The outcome

We kept the client. The client’s business grew, and I have enjoyed multiple referrals from this client. I continue to service the account well and at a reasonable profit. Honesty and integrity in agency practices works first because it is the right thing to do. People will respond to the way you do business. Secondly, you will achieve results in prioritizing ethics and professionalism in your agency.

Agency Profiles Worksheet

Category
The Old Agency
Today's Agency
The New Agency
Your Agency
Theme

Results at any cost

Justify the results

Do the right thing, results will follow

  
Culture

Lie, cheat, steal

Push the envelope

Rigorous honesty and integrity

  
Business Practices

Substandard

Standard

Best Practices

  
Association Standards

CAC No Membership

CAC: Passive membership

CAC Leadership role

  
Client Servicing

Overpromise, not delivered

Overpromise, under delivered.

Promised over delivered.

  
Sales

High pressure

Features and benefits only

Consultive selling

  
Marketing Focus

Vendor Status

Preferred vendor status

Partnering with clients

  
Financial Management

Borderline illegal

Loosely organized

Rigorous controls, reporting documentation

  
Collections

Abusive

Random communication

Standardization of presentation, ethics

  
Hiring/Firing

No criteria

Criterion not enforced

Clear profile, screening, evaluation

  
Training

No investment

Inconsistent

Ongoing, continuous education

  
Services

Collections

Collections with related services

All aspects of collections, receivables management, training and consulting.

  
Automation

Manual procedures

Half manual-Half automated

All aspects of collections, receivables management, training, and consulting.

 
Strategic Planning

Not understood

Lip Service, no real action

Leading edge, automation and communication

  
Growth Expectations

In contraction, no growth

Static, slow or growth

Exponential growth

  
Margins

Below industry benchmark

At industry benchmark

Above industry benchmark

  
Supervision

Nonexistent

Ad-hoc

Consistent, structured

  
Performance

Poor: the unacceptable is acceptable

Mediocre

Peak performance only

  


An agency is like any business organization, it has a unique culture. A culture suggests the underlying assumptions and values that drive primary attitudes and behaviors in an organization and specifically, in your agency’s culture? As agency principals, what are your underlying assumptions and values?

At my agency, we had a culture committed to:

There are two basic core values that all our people share. It is how I work. It is how I live. It is how I run my agency. Those values are honesty and integrity. I will discuss how these values play out in a New Agency paradigm. Can you short-cut the process? Sure you can. Will you compromise yourself, your clients, your employees, and our industry? Will you compromise you own family? Yes you will, if you shortcut the process!

My example concerning the reimbursement for the copies illustrates the difference between my agency culture, values, ethics, and business practices, and other lesser responses. My New Agency paradigm is a commitment to honest and integrity. My agency’s growth culture supports these core values. As a result of this, my staff and I have a commitment to standardization around what we call “best practices.” That was illustrated in my response to my client which exceeded his expectation. Just meeting expectation i.e. reimbursing him 50%, would have been an example of standard practices. Withholding the information, or lying, would have been example of substandard practices. For our purposes in the following paradigm (see chart) these different agency practices will be understood under “The Old Agency,” “Today’s Agency,” and “The New Agency.” In “The New Agency,” honesty and integrity permeate the organization from the top down and the bottom up. My staff’s organizational consistency mirrors our commitment to a common culture, common values, and common “best practices” business standards.

How far do people short-cut? As far as they can rationalize, equivocate, and like to themselves. A few years ago, I interviewed and ambitious collector who was smart, and had good persuasion skills on the phone. He talked about “flexibility.” Flexibility meant that during a 15 day pre-commission phase, monies coming in between the 13th and 15th day could be “held” (if the dollar amount  warranted it), until the account converted to a commission basis. At this point, it was clear our version of flexibility was different. I physically escorted this man to a mirror in our office and asked, “Whose money was that: yours or the client’s?” He answered, “I get the point” So did I. He was excused on the spot.

Attorney Ron Sargis, respected advocate of our industry, tells us to exercise caution! “Pigs get fat, but hogs get slaughtered” Ron Sargis’ counsel in positioning ourselves in debtor negotiation is excellent advice. When it comes to business practices and ethics, we are again reminded to set our sights high. We simply cannot afford the alternative. Pigs get slaughtered, too!. We do not grow animals for slaughter. We grow, people and we grow the numbers the right way: with honesty and integrity.
Today’s business climate, our clients, our employees and our best competition in the industry, except this, and deliver on this level.

How well do you deliver? Which agency model best describes your agency? How committed are you to a New Agency model? All of us are accountable to ourselves, our business, to CAC, and to our industry at large. In Closing, I ask you to look in the mirror…

Collector’s Inc/April 1997

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