41st ANNUAL ELA CONVENTION
MANIFEST DESTINY IN THE
LEASING INDUSTRY –
IS GROWTH ALWAYS THE PATH TO SUCCESS?
PRESENTED BY
JOHN C. DEANE
THE ALTA GROUP
SAN FRANCISCO
OCTOBER 2002
MANIFEST DESTINY
41st ANNUAL ELA CONVENTION
Lessons of the Perfect Storm
•
Strategic Alignment
– What is the principal goal or mission of the company?
MANIFEST DESTINY
41st ANNUAL ELA CONVENTION
Lessons of the Perfect Storm
•
Strategic Alignment
– What is the principal goal or mission of the company?
– Does the company have stated, specific strategies?
MANIFEST DESTINY
41st ANNUAL ELA CONVENTION
Lessons of the Perfect Storm
•
Strategic Alignment
– What is the principal goal or mission of the company?
– Does the company have stated, specific strategies?
– How many strategies are there?
MANIFEST DESTINY
41st ANNUAL ELA CONVENTION
Lessons of the Perfect Storm
•
Strategic Alignment
– What is the principal goal or mission of the company?
– Does the company have stated, specific strategies?
– How many strategies are there?
– Do the strategies align with and support the principal
goal or mission?
MANIFEST DESTINY
41st ANNUAL ELA CONVENTION
Lessons of the Perfect Storm
•
Operational Alignment
– Does the company have stated, specific tactics?
MANIFEST DESTINY
41st ANNUAL ELA CONVENTION
Lessons of the Perfect Storm
•
Operational Alignment
– Does the company have stated, specific tactics?
– Does these tactics support the company’s strategies?
MANIFEST DESTINY
41st ANNUAL ELA CONVENTION
Lessons of the Perfect Storm
•
Operational Alignment
– Does the company have stated, specific tactics?
– Does these tactics support the company’s strategies?
– Does the company have sufficient capital, human and
technical resources to support the tactics?
MANIFEST DESTINY
41st ANNUAL ELA CONVENTION
Lessons of the Perfect Storm
•
Operational Alignment
– Does the company have stated, specific tactics?
– Does these tactics support the company’s strategies?
– Does the company have sufficient capital, human and
technical resources to support the tactics?
– Is the company’s commitment to full and complete life
cycle management real?
MANIFEST DESTINY
41st ANNUAL ELA CONVENTION
Lessons of the Perfect Storm
•
Controlled Growth
– The “right” growth rate depends on the company & the
environment
MANIFEST DESTINY
41st ANNUAL ELA CONVENTION
Lessons of the Perfect Storm
•
Controlled Growth
– The “right” growth rate depends on the company & the
environment
– Control should be the first emphasis – growth the
second
MANIFEST DESTINY
41st ANNUAL ELA CONVENTION
Lessons of the Perfect Storm
•
Controlled Growth
– The “right” growth rate depends on the company & the
environment
– Control should be the first emphasis – growth the
second
– Develop a list of control stress “warnings” & watch for
them
MANIFEST DESTINY
41st ANNUAL ELA CONVENTION
Lessons of the Perfect Storm
•
Controlled Growth
– The “right” growth rate depends on the company & the
environment
– Control should be the first emphasis – growth the
second
– Develop a list of control stress “warnings” & watch for
them
– Think < 15% annual growth
MANIFEST DESTINY
41st ANNUAL ELA CONVENTION
Lessons of the Perfect Storm
•
Discipline
– Does the company have a strategic and/or business
planning process?
MANIFEST DESTINY
41st ANNUAL ELA CONVENTION
Lessons of the Perfect Storm
•
Discipline
– Does the company have a strategic and/or business
planning process?
– Is it real? Is it used?
MANIFEST DESTINY
41st ANNUAL ELA CONVENTION
Lessons of the Perfect Storm
•
Discipline
– Does the company have a strategic and/or business
planning process?
– Is it real? Is it used?
– Develop a list of discipline stress “warnings” & watch
for them
MANIFEST DESTINY
41st ANNUAL ELA CONVENTION
Lessons of the Perfect Storm
•
Discipline
– Does the company have a strategic and/or business
planning process?
– Is it real? Is it used?
– Develop a list of discipline stress “warnings” & watch
for them
– Discipline does not mean bureaucracy
MANIFEST DESTINY
41st ANNUAL ELA CONVENTION
Lessons of the Perfect Storm
•
Focus
– Does the company align the mission, the strategies
and its tactics?
MANIFEST DESTINY
41st ANNUAL ELA CONVENTION
Lessons of the Perfect Storm
•
Focus
– Does the company align the mission, the strategies
and its tactics?
– How is this alignment reviewed periodically?
MANIFEST DESTINY
41st ANNUAL ELA CONVENTION
Lessons of the Perfect Storm
•
Focus
– Does the company align the mission, the strategies
and its tactics?
– How is this alignment reviewed periodically?
– Develop a list of focus stress “warnings” & watch for
them
MANIFEST DESTINY
41st ANNUAL ELA CONVENTION
Lessons of the Perfect Storm
•
Focus
– Does the company align the mission, the strategies
and its tactics?
– How is this alignment reviewed periodically?
– Develop a list of focus stress “warnings” & watch for
them
– The challenge in the leasing industry is not to find
opportunities but which ones to choose
MANIFEST DESTINY
Growth Is Not A Strategy
Ingredients for Successful Growth in Leasing
11/8/2002
Paul J. Menzel, CLP
SVP - General Manager
Leasing Division
Santa Barbara Bank & Trust
Profitable Business Proposition
!
Adequate Margins
!
Meet hurdle rates
– EVA Economic Value Added
– ROI of 15-18% including cost of capital
!
Cover All Costs
!
Acquire for profit not critical mass
!
Avoid Vendor Captive Trap
– Sacrifice discipline for booked sales
Sustainable Capital Source
!
Cost Effective
!
Leverageable
– Equity
– Debt
• Public
• Private
• Securitzation
Competent Product Delivery System
!
Access to Diversified Markets
!
Strategic Diversity
!
Product Intelligence
– Understand your competencies & limits
Direct
!
– Sales Organization
!
Indirect
– Vendor
– Broker
Scalable Infrastructure
!
Front End
– CRM
– Credit Processing
!
Back End
– Accounting
– Portfolio Management
!
Risk Management
– Audit
!
Reporting
– Efficient Data Access
Reasonable Enterprise Expectations
!
Strategic Fit
!
Relative Contribution
!
Goals
– Management
– Owners
– Parent
• Vendor Captive
Management Strength
!
Operating Skills & Competencies
!
Leadership Development
!
Succession
!
Discipline
!
Noble Motivations
Manifest Destiny in the
Leasing Industry
James Merrilees
First Portland Corporation
Rebuild Alliances
Employees
Creditors
Customers
Industry
Employees
Re-educate and train
Reduce turnover
Hang on to key people
Creditors
Build a long-term strategy
Sacrifice immediate gain
Plan for a business cycle
Commit to quality growth
Customers
Learn customers’ business
Establish common goals
Share risk
Share success
Patience and Persistence
It takes time
It takes repetition
Find the good, (yes there is)
Bonus Alliance
Network within the industry
Stay involved
Utilize ELA
Growth Is Not A Strategy
Ingredients for Successful Growth in Leasing
11/8/2002
Paul J. Menzel, CLP
SVP - General Manager
Leasing Division
Santa Barbara Bank & Trust
Profitable Business Proposition
!
Adequate Margins
!
Meet hurdle rates
– EVA Economic Value Added
– ROI of 15-18% including cost of capital
!
Cover All Costs
!
Acquire for profit not critical mass
!
Avoid Vendor Captive Trap
– Sacrifice discipline for booked sales
Sustainable Capital Source
!
Cost Effective
!
Leverageable
– Equity
– Debt
• Public
• Private
• Securitzation
Competent Product Delivery System
!
Access to Diversified Markets
!
Strategic Diversity
!
Product Intelligence
– Understand your competencies & limits
Direct
!
– Sales Organization
!
Indirect
– Vendor
– Broker
Scalable Infrastructure
!
Front End
– CRM
– Credit Processing
!
Back End
– Accounting
– Portfolio Management
!
Risk Management
– Audit
!
Reporting
– Efficient Data Access
Reasonable Enterprise Expectations
!
Strategic Fit
!
Relative Contribution
!
Goals
– Management
– Owners
– Parent
• Vendor Captive
Management Strength
!
Operating Skills & Competencies
!
Leadership Development
!
Succession
!
Discipline
!
Noble Motivations
Manifest Destiny in the
Leasing Industry
James Merrilees
First Portland Corporation
Rebuild Alliances
Employees
Creditors
Customers
Industry
Employees
Re-educate and train
Reduce turnover
Hang on to key people
Creditors
Build a long-term strategy
Sacrifice immediate gain
Plan for a business cycle
Commit to quality growth
Customers
Learn customers’ business
Establish common goals
Share risk
Share success
Patience and Persistence
It takes time
It takes repetition
Find the good, (yes there is)
Bonus Alliance
Network within the industry
Stay involved
Utilize ELA
Manifest Destiny in the
Leasing Industry
James Merrilees
First Portland Corporation
Rebuild Alliances
Employees
Creditors
Customers
Industry
Employees
Re-educate and train
Reduce turnover
Hang on to key people
Creditors
Build a long-term strategy
Sacrifice immediate gain
Plan for a business cycle
Commit to quality growth
Customers
Learn customers’ business
Establish common goals
Share risk
Share success
Patience and Persistence
It takes time
It takes repetition
Find the good, (yes there is)
Bonus Alliance
Network within the industry
Stay involved
Utilize ELA