We operate in a dynamic world economy where regulation plays an increasing role in how we conduct business. Competition is growing, technologies are changing, clients are becoming more financially sophisticated, and our diminishing workforce is more diverse and demanding than ever before.

Look Ahead at All Times & Stay Agile
In order to succeed, you need to be proactive and that means you have to foresee that change is coming before it arrives. One way to do this is to create a work culture where there is free exchange of ideas and observations as well as a mechanism that allows the best ones to percolate to the top.

At Key Equipment Finance, we encourage this exchange by bringing our senior managers together at regular intervals for strategy discussions. Prepare an agenda, but also ensure your team comes prepared to contribute ideas for discussion. You want to encourage them to talk about the things they are seeing and learning — and not just within their own areas of responsibility.

Use an outside speaker or a pre-meeting reading assignment to create fresh perspective. Once the creative environment is set, you can reassess your market boundaries and brainstorm about new strategies. To ensure the momentum is not lost, make solid plans for follow-up actions. Write down ideas that resonate, narrow your options through further discussion, assign team members to investigate topics and set deadlines for reporting to the group. It is critical to carry out planned follow-up actions; otherwise the day-to-day tasks of bringing in business may get in the way of looking ahead and preparing for the future.

Create a Strong Position in an Uncontested Marketplace
About a year ago, I asked my management team to read Blue Ocean Strategy, a book by W. Chan Kim and Renee Mauborgne. The authors describe two market spaces: the known market space or “red ocean” and the unknown market space or “blue ocean.” In the red ocean, businesses compete for the same customers, provide similar products and generally chew each other up. Sound familiar? In the blue ocean, there are as-yet unidentified industry options and therefore unknown and untapped potential. This concept resonated with my entire management team.

Obviously your company wants to be in the blue ocean where they can create a sustainable competitive advantage. To do that, each company must create its own blue ocean by doing things such as adding value through innovation and adopting strategies that favorably affect company cost structures over the long term. These actions can determine whether your company stagnates in the red ocean or thrives in the blue ocean.

Learn to Use “Positive Turbulence”
If you have read the “2006 Industry Future Council Report,” published by the Equipment Leasing and Finance Association (ELFA) you are familiar with the term “positive turbulence.” Based on the theory of Stanley Gryskiewicz, an organizational psychologist, positive turbulence occurs when a person or business acknowledges outside change, and then uses it to discover new trends and developments that might improve a process or product. Rather than resisting change, you leverage it to uncover new opportunities and innovative solutions.

To find a new perspective, you might look at an industry that is completely different from yours and think about what they are doing that works; then determine which practices might transfer to your business. You can find new perspectives by attending business conferences that only peripherally pertain to your business, reading trade publications from other industries, talking to people who perform similar work in a completely different industry, or encouraging employees to cross-pollinate practices from one department or division to another. You might also recruit employees from outside your industry to gain new insights on doing business. It is these types of activities that can open your mind to new ideas and potentially result in new processes, products or services.

Be an Active Participant in our Industry
I am a firm believer in the need for advocacy. Key Equipment Finance is very involved with the ELFA, and our employees serve on many of its committees. Dedicated organizations such as this are able to keep their pulse on what is happening in a given marketplace or industry. They can also provide excellent training opportunities for your employees. In the equipment financing industry, we are all too aware of the negative impact legislation can have on our ability to do business. I urge your active participation in our industry organizations, because the more each of us gets involved, the more effective these organizations can be.

Don’t Always Give the Customer What He Wants
If your customer wants the best price, is it in your best interest to encourage price as the only decision factor? It may depend on your mission for doing business, but I would caution lessors not to over-commoditize their product offerings. By expanding your services as well as your products, you are better able to give the customer the solutions that can take his or her business to the next level.

This is another opportunity to think outside the box. For example, if your customers ask about insuring their equipment and you don’t offer to make that process easier by offering options, are you missing an opportunity to differentiate yourself on something other than price? These are the types of questions you need to ask yourself.

Your clients are operating in the same changing business climate that affects you; try to look forward and anticipate their needs. You may find an opportunity — or several — to enhance your profits via a creative approach.

Inspire Your Workforce
As companies become increasingly global in breadth, it is important to identify and instill a culture that inspires workers and makes your company stand apart from the competition. We encourage our employees to be “client-focused, committed and capable,” but it goes beyond just announcing a slogan and pinning it to the walls of the workplace. Your mantra must take on real meaning, and you must continually demonstrate its significance to employees while teaching them how they can apply it to their everyday work efforts.

At Key we reinforce desired behaviors through training, demonstration (success stories), management endorsement, goal setting and awards. Your work culture is the essence of your business, because it affects how your employees represent your company and interact with clients. You must develop a culture that makes sense for your organization. But whatever culture you embrace, to serve your future workforce, it must be authentic and inspirational for all your employees.

Face It: Our Workforce is Changing
One of the biggest issues facing the equipment financing industry is the “graying” of the current workforce and the impending shortage of qualified employees in the future. As the pool of seasoned financing professionals leaves the workforce through retirement or career change, the day will come when hiring experienced candidates is no longer a viable option. Given the changes in generational attitudes and advanced technology, it will be necessary for today’s senior managers to break the mold when devising solutions to fill the workforce gap. It is imperative that we begin to find new ways to attract, train and retain talent.

Let’s use training as an example. For years, rather than invest in training, we have all looked for demonstrated experience within the financial services industry. This has forced lessors to recycle existing talent, usually with a bidding war on salaries. We need to re-examine our hiring criteria, identifying core capabilities rather than specific experience. Since we will no longer be able to match prior experience to the job, we can also no longer assume that new employees will informally pick up all the details of their position from co-workers. Instead, we must establish organized training programs, which allow selected new employees to learn about our companies and our industry, perhaps while rotating through various critical job functions.

ELFA has recognized the importance of these human capital issues and is helping members shape the next generation of our industry’s leaders by offering challenging training programs through its Future Leasing Leaders Institute. In addition, the association’s Human Capital Committee helps member companies address the important areas of talent recruitment, development and retention by providing a forum for sharing best practices, resources and lessons learned. As lessors, the onus is on us to attract the right candidates and teach them the job — and do it in a way that inspires and engages them while also keeping them in our industry.

Consider New Ways to Use Emerging Technology
We all know technology is changing very, very fast. In the past, Key Equipment Finance allowed Blackberries and PDAs but did little to support them. Now, just a year or two later, we have realized that these are necessary tools if we expect our sales force to respond effectively to customer needs and stay on top of burgeoning company communications.

Generation X and Y candidates have grown up with technology and consider the latest and greatest tech toys to be a necessary condition of employment. As we move forward, these employees will mirror the clients we serve, so we need to keep pace and reconsider how we distribute technology assets and how we use them. Some companies are finding that it is more effective to equip employees with company-provided cell phones, PDAs and iPods, because it raises productivity and encourages loyalty. It also attracts candidates and might even position your organization as a “cool” company to work for.

Look Outside Your Own Industry
Sometimes it’s hard to see beyond what you’ve always done and your own experience. You may be surprised by what other companies outside your industry are doing to attract and retain the new generation of employees. Today’s college graduates have a much different set of priorities than past generations and are looking for a different set of perks. Not only do they want the latest in technology but also flexible schedules and work conditions. Technology companies tend to be on the cutting edge in these areas and consequently are popular places to seek employment.

With that in mind, Key Equipment Finance recently sent a contingent from our human resources management team to visit a high-tech company to see what they were doing differently, and we saw some startling things. For example, instead of spacious offices and assigned work cubes, we saw unassigned work pods and work rooms. Employees secured their personal items in a locker at the beginning of the day before going off to find an available space to work. After plugging in their phone and computer, they were good to go. While it might seem chaotic not knowing where any person will be sitting at any one time, our team instead witnessed the high energy that pervaded the workplace as employees were forced to mix, share ideas and collaborate.

Virtual employees are another option to consider. While “going virtual” may never be an option for many positions, in certain jobs it may be more time-effective to equip an employee to work from home. When you arm an employee with a phone, computer and the appropriate system connections, you may create a more productive work environment — 
one that is free of lengthy or stressful commutes, gas price concerns and time clocks. While this is something that is very much in the experimental stages at Key Equipment Finance, we find that our “test” virtual employees tend to work longer hours, get more done in less time, adapt more easily to time zone challenges and maintain a high level of job satisfaction. If this type of flexibility works for your company, your employees may be more productive, happier and less likely to look elsewhere for employment.

Believe in Our Industry and Its Future
It’s a changing world out there, but it’s exciting, too. There are lots of opportunities for creativity and new ways to conduct business. As an industry, our first step has been to recognize that we have a larger market opportunity than just leasing, thus the change in our association’s name. Now it’s time to accept reality, acknowledge the significant changes the future will bring, and find our “blue ocean.”

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Paul A. Larkins holds the dual role of president and chief executive officer of both Key National Finance and Key Equipment Finance. Key National Finance is the umbrella organization for KeyCorp’s national businesses and includes Key Equipment Finance (which operates internationally). Larkins had previously held the position of senior executive vice president, Key Equipment Finance and had also been senior vice president of KeyBank U.S.A., N.A. Prior to joining Key in 1993, he has held various executive positions at USL Capital and IBM. Larkins serves as immediate past chairman of the board of directors for the Equipment Leasing & Financing Association (ELFA). Additionally, he is active on the University of Colorado’s Leed’s School of Business Advisory Council.