Credit analysis requires focus
Cooley says that deal flow can improve when credit analysts are able to concentrate, so he suggests asking analysts, “Do you concentrate better in the morning or the afternoon?” After reading the book, Deep Work by Cal Newport, Cooley used this approach with some institutions in his consulting work: He suggests credit analysts be given a period of time to focus on the credit in front of them without being disturbed. Allow them to shut their doors or put something outside their cubicles and mark the time in their calendar as being off limits for disturbances.
“I’ve seen efficiencies improve when you implement deep work periods either in the morning or the afternoon so that your analysts can really focus,” he says.
Encourage analysts to learn
Credit analysts, like all bank or credit union employees, want to feel respected, rewarded, and appreciated, Cooley says. “Just making credit analysts do file after file after file after file – you’re going to burn them out,” he says. With banking skill shortages seen as a threat to growth prospects, it’s a good idea to look for ways to avoid credit analyst burnout.
One of the ways managers can show credit analysts appreciation and respect is to ask, “Are there any additional areas in the credit department you would like to learn more about?” Helping analysts learn more about areas outside of their immediate purview benefits both the employee and the financial institution, he notes. “Maybe let them work on the allowance. Maybe one quarter let them learn about the exception-tracking process. Let them work on appraisals; let them develop a variety of skills, and in that variety of skills, they’ll develop a better perspective, and I promise you, it helps with retention tremendously.”
“This is about retention and engagement and managing your talent risk,” Cooley says.
Understand how personalities can affect performance
Another way to improve efficiency in the credit department is simply to be understanding of your employees, according to Cooley.
Everyone approaches their work in a different way, and being cognizant of various personalities and work styles can help you uncover “superpowers” in certain analysts. For example, some analysts reveal they are “fiercely loyal when they feel understood,” Cooley says, adding they might pass up another job opportunity if they feel their current work situation suits them well.
Cooley recommends creating office boundaries for all workers, such as requiring that people who wish to discuss a loan file set up a meeting in advance with the analyst. While some analysts may be prepared and have their “i’s dotted and t’s crossed and they’re ready to go” if you’ve made an appointment, it can throw that same analyst off if you pop in unannounced, Cooley says. “It makes certain people extremely anxious when you just drop by. It creates inefficiencies. They get unfocused. They get flustered. It takes them an hour to get focused again, and your deal won’t get done as fast.”
While Cooley didn’t suggest this, one option for increasing your team’s effectiveness and encouraging collaboration is to implement personality testing across the team to gauge individual work styles. Assessments such as the Myers-Briggs assessment and the DiSC assessment can help both management and teammates understand one another’s personalities and behavior, which can shed light on opportunities to improve the quality and efficiency of work.
To hear more of Cooley’s advice for optimizing deal flow and helping credit analysts perform at their best, listen to the replay of the webinars, “Best Practices for Credit Analysts at Banks” and “Credit Union Best Practices for Credit Analysts.”
However, chief credit officers cannot overlook the human component of optimizing deal flow, either. There is a lot more to an effective team than the number crunching and simply moving applications along a pipeline, according to loan review and credit risk Consultant Ancin Cooley.
