Equipment Finance’s Leading Women

by Kelly Wolfgang Jul/Aug 2014
Monitor asked the leading women of equipment finance to share their paths to success, guidance for future industry professionals and industry insights. We thank Laurie Bakke of Western Equipment Finance, Maureen Carr of CapitalSource Corporate Asset Finance and Diane Notch of Stearns Bank Equipment Finance Division for their participation.

As the economy continues making strides and the demand for equipment rises, leaders of equipment finance companies in the U.S. must continually evolve to meet the expectations of both a growing client base and stakeholders. With a concern for interest rates and uncertainty over lease accounting changes looming, the pressure to maintain year-over-year growth and best the competition remains the focus of those heading the pack.

Monitor spoke with three leading women at the helm of top companies of the equipment finance sector to get their take on what the future holds for the industry, how they reached success and what advice they would give to newcomers. Overall, each individual feels optimistic going into the second half of 2014, with plans to build their talent pool and grow their companies’ already prominent standings.

Providing insight are Laurie A. Bakke, president of Western Equipment Finance; Maureen Carr, managing director of CapitalSource Corporate Asset Finance; and Diane Notch, senior vice president and general manager of Stearns Bank Equipment Finance Division.

Formula for Growth

To lead a seasoned team of professionals in the equipment finance sector is no easy task — one must remain constantly focused on communication, loyalty and teamwork. “The industry is all about service right now,” says Notch. “You have to follow up on what you say you will do and exceed expectations.” For Notch, that philosophy is not only her personal motto, but also the service goal at Stearns Bank Equipment Finance Division. “We make sure that when you call, we pick up on the first ring and when we say we’re going to help you, we do.”

For over 19 years, Notch has perfected that focus on customer satisfaction at Stearns Bank. “When I started, there were only 14 employees in the equipment finance division. Nineteen years later, we have about 126.” Notch says teamwork among the group is the key to Stearns’ success — not something that can be taught or practiced by just anyone. “I’m a roll-up-your-sleeves kind of person, as is the CEO of our company, Norm Skalicky. To me, it’s all about communication. I’m out on the floor and I don’t like offices. People see me, I go to conferences with people and I take calls,” Notch says.

In addition to team support, Bakke says an understanding of market development concepts aid coaching in success in equipment finance. “To maintain a sustainable business model that continues to meet stakeholder expectations, it’s imperative to make the right alignments. It comes down to building and developing a team, understanding market needs and pulling it all together so you are continually maintaining a high level performance.” And to make that happen, Bakke says, you must make a commitment to your position in the industry. “It’s important to understand that integrity and transparency are key,” she says. “Without the trust that’s developed, your value is diminished. We must continue to embrace change, find the architecture for a business model that speaks to our own personal approaches and make sure that the integrity we create is not only for ourselves, but our organizations and what we want to see in the long term.”

With her impressive experience in the industry, it’s evident that the advice Bakke gives is learned from her diverse background, with experience in such sectors as inventory finance for manufactured equipment with ITT Commercial Finance to her current position as president of Western Equipment Finance. “In the late 1980s I began working with the largest bank in Sweden, NordBanken AB. At the time, I transitioned my career to serving the middle market and the small ticket vendor finance channel,” she says. “It was my involvement there that I experienced the entrepreneurial approach and the true spirit of the equipment finance industry.”

For Carr, a focus on honesty and integrity has guided her success in the industry. “I started as a CPA at a public accounting firm, then furthered my accounting and finance work at Heller Financial,” she says. “It was there that I started my equipment finance career as a credit analyst. I continued on that path at Royal Bank of Scotland, eventually transitioning to director of capital markets. After a year in capital markets at CapitalSource, a division of Pacific Western Bank, I took over the reins for the Corporate Asset Finance team.” In that experience, Carr learned an invaluable lesson: “You must be a team player and hold key honesty, integrity, poise and dedication. You need to be all of these things all of the time. The industry is competitive — for deals and for talent. At the end of the day, putting in time at the appropriate stages of your career is critical. Working your way up the ladder and having goals is good, but you also have to earn the respect of your managers and your peers.”

Carr adds that having a diverse background is helpful in today’s equipment finance environment. “In my own experience, I’ve found that my background in accounting, finance, mergers and acquisitions, credit, and sales eases the day-to-day decisions I make that aren’t just limited to deals. For example, when working with complex lease structures, having an accounting background has been helpful for analyzing structures from both the lessee and the lessor perspective.”

Bakke, too, believes a diverse background will aid in industry success. “At NordBanken, I focused on equipment financing in the U.S. It enabled me to experience international and domestic operations and understand the importance of solidifying longstanding manufacturer, vendor and industry relationships.”

For Notch, who began her career at the ground level of an optical company, it was her experience outside of the industry that led to her current success. “Stearns Bank was the bank that helped the optical company I formerly worked with get started. When that company underwent a sale, Norm [Skalicky] asked me if I would come to Stearns to help with a division of leasing that was newer to Stearns. So I made the move and started a small division with a marketing focus. In December 2007 he asked me to head that operation, and I became the general manager and senior vice president of the Equipment Finance Division,” Notch says.

The Value of a Mentor

But without the guidance of mentors, Bakke, Notch and Carr say they would not be where they are in equipment finance. “I was fortunate to have three mentors throughout my career,” Bakke says. “Each were strong leaders, visionaries and strategists. Their styles of communication were engaging and their styles of management were collaborative and transparent. I was fortunate to be a part of their teams. It allowed me to develop and advance in my career.” Even now, Bakke says she uses her mentors to guide her day-to-day work. “If I’m faced with a challenge or an uncertain situation, I often stop and think back. I try to remember a situation that my mentors had encountered and envision how they approached it.”

And with that mentality, Bakke sets out to inspire her team. “Western prides itself on being a customer-driven organization,” she says. “It is our culture and it is our commitment. We are constantly mindful of our customers’ experience. I use the engaging communication style of my mentors to ensure each team member understands that service is our competitive advantage. Our ability to showcase the ‘Western Way’ is through our North Dakota friendliness and attentiveness. With over 40% of our new business volume derived from our existing customer base, it is important that we remain committed to the Western Way.”

For Notch, the managerial style of her mentor is something she emulates daily when working with her own team. “I had the fortune of working with a CEO of a company where I was previously employed. I was able to see him be involved with his company — he was a roll up your sleeves kind of person, and it really seemed to work. In addition, I frequently listen to coaches such as Lou Holtz, the former football coach at the University of Notre Dame. With his advice, I’ve learned about people caring and how to be a coach,” she says. “I want to be the best coach to ever happen to the industry. People say they want to work here, and I can see why. It’s hard work, but we share ideas and inspiration, and that’s contagious. Our motto is that we get the job done, and we take a lot of pride in that.”

Notch adds that at Stearns, it’s crucial to make sure the customer knows what is going to happen, and then exceeding expectations. “Challenges that come in the morning need to be addressed by the end of the night,” she says. “Each day, I make sure that I do what I say I’m going to do. You have to be fast, and you have to be accurate. If you can succeed in making your clients happy, you will succeed in your business. Today, the majority of our volume comes from customer referrals.”
Carr says her mentor, Laird Boulden, executive vice president, chief lending officer of CapitalSource, has guided her throughout her career. From her start at Heller Financial through her current role at CapitalSource, Boulden has been a constant in Carr’s success in the equipment finance industry. “Laird has continued to push and encourage me at times where his confidence in me exceeded that in myself,” she says. With Boulden’s encouragement, Carr says she is able to succeed in her work. “We are certainly not the largest player in the equipment finance space, but we feel we have carved out a niche for ourselves at CapitalSource,” she says. “With that, execution is paramount, and we pride ourselves on that. On a daily basis, we thoroughly vet transactions prior to making promises. Bait and switch is not a part of our vocabulary. Instead, we zero in on our non-investment grade box while balancing risk and reward.”

Career Milestones

Taking the road to success comes with the knowledge of how to handle bumps in the road, and the pride of having overcome them. When asked what defining moment stood out in their careers, Notch, Bakke and Carr each shared a unique experience.

“In 2007, a pipe in our building broke and the entire building flooded,” Notch says. “We had a disaster recovery plan that worked to a T. At the time we had about 85 employees who had to relocate to the mother bank about 20 miles from our office. It happened on a Saturday, and we were back to work in the new location that Monday. There wasn’t a soul in the U.S. who knew we flooded because we took the time to practice our disaster plan and talk about the ‘what if’ situations. In regards to location, we had to make a change, and that was hard, but it only made us stronger. We had to stay at the other bank for close to three months — it was a challenging situation. But we got through it, and now we’re like a family here.” That experience, Notch says, became a milestone in her career — a true test of her leadership, and a situation that could have crumbled a lesser team.

Bakke said that reflecting on the milestones of her career is always interesting, as they provide perspective on where she is now. “At Huntington Equipment Finance, where I managed the vendor finance division, I was involved with the formation and development of Huntington’s national vendor platform,” she says. “I’ve also been fortunate to have the opportunity to drive the national market presence and growth of Western Equipment Finance. I consider myself privileged to experience significant milestones thus far in my career.”

For Carr, the defining moment of her career came through past experience that eventually led to a stronger take on her current position. “I think anyone who has started their equipment finance careers in credit will tell you that the defining moment was when they migrated into sales, and I would agree,” she says. “Moving into sales when I headed the RBS Capital Markets Group gave me a different perspective of being on the other side on the front line. Running the organization I do now, I have more of a balanced perspective of sales, credit and finance. It helps when managing my team because I’ve truly been in their shoes.”

Leading a Talented Team

Those milestones have become the foundation for operational success, something each uses to guide her work and her managerial styles. The leadership teams at CapitalSource, Western Equipment Finance and Stearns Bank, according to Carr, Bakke and Notch, respectively, are all the cornerstones of success.

“The Corporate Asset Finance team at CapitalSource has been together through four companies,” Carr says. “We are only a group of 13 people, but we’ve stuck together the entire way through — at times, we even finish each other’s sentences. Our working relationships go back more than 10 years, so it’s definitely a family environment,” she says. “Sticking through the 2007-2008 timeframe was difficult for everyone in our industry — we, too, went through significant changes as a team. As a team, we had a lot of ups and downs, but that really has bound everyone together. From RBS, which was a huge organization, to Tygris, more of a startup, and now to CapitalSource, we’ve been given a wide range of perspectives.

“Where we are now, we’ve learned that it’s not necessarily what’s biggest that’s best. We have access to executive management, which helps us move quickly and confidently in the market. We have a leg up knowing that on a day-to-day basis, we’ve got the executive management team just a phone call away,” Carr says. “A lot of people in the industry have stayed in the same size or type of organization, but our leadership team has a breadth of experience from working in institutions of all sizes and types. At CapitalSource, we may not be the largest, but we know our clients very well and have strong relationships with all of them that span years and organizations.”

“Western’s leadership team is unique in that it’s somewhat conservative, yet aggressive,” Bakke says. “We have a forward-looking capability for evaluating risk and return and have the ability to capitalize on our flexibility. One of the benefits of being a smaller organization, with 41 employees in total, is that it allows you to evaluate, incorporate and implement changes through new programs or strategic offerings. From a leadership perspective, the fact that we’re conservative with risk analysis but aggressive with growth means that we fit well within our targeted business strategy.”

The single factor differentiating the leadership team at Stearns Bank is communication, Notch says. “The style our whole bank has is that communication is open and verbal. We don’t do things through formal memorandums and meetings. We rely heavily in open discussion and the two-way interaction between employees and customers. We learn to respect each other, and it just works. Caring for others is a common thread throughout the organization,” Notch says. And that respect begins early, as Notch says she spends a lot of time on the interviewing process, speaking with every person before they are hired to ensure that they are a good fit from the beginning. “I strive to hire people who want to grow within the company and provide them the opportunities to do so,” she says. “I hire people that are smarter than I am, help them set goals and point them in the right direction by providing a challenging environment that makes them use the talent they have. My motto is that people are essential to success. I strive to attract and retain highly qualified people who will work together to provide exceptional service in an environment in which they can grow personally, professionally and financially.”

Outlook for 2015

With the support of their leadership teams, Bakke, Notch and Carr are setting their sights on 2015. Bakke says that Western Equipment Finance continues to focus on net returns while maintaining a diverse portfolio. “We also continue our commitment to team development and operational efficiency while embracing change. I anticipate that as an industry we will continue to see rate compression while new business opportunities increase, albeit at single digit levels. Rates will increase, but will produce minimal uplift as we’ll most likely meet the corresponding increase in cost of funds,” Bakke says.

“At Western, we will continue to focus on our small- to mid-size business clients, and primarily work with vendor partnerships in a wide range of industries, such as agriculture, landscaping, waste management and technology.” Bakke says that in the first half of 2014, the company has outperformed forecasts and expects to continue to do so as the year ends. “While we will continue to exceed performance expectations, I will remain focused on our ability to meet long-term expectations of our stakeholders. The rate compression we’ve experienced over the past couple years has resulted in equipment finance portfolios evolving from higher to lower yielding portfolios producing less profitability in the years to come. This presents an interesting challenge that requires close evaluation of product and service capabilities to complement our largest income producer,” she says.

Notch says she is “pretty optimistic” about 2015, and expects the second half of the year to show an uptick in revenue. “Looking into next year, I plan to meet and exceed my goals. In the first half of 2014, we’re ahead of goal, and expecting to finish out the year above goal. Looking ahead, we expect to set another record. In 2013, we were 52% over goal and this year we expect to be 40% over our volume from the year prior,” Notch says. “We’re currently adding to our facility and continue to stay focused on fabulous service. I have a vision for the year ahead. What we’re doing this year will affect how well we do next year, and knowing where we want to go will help us get there.”

And in the next year, Notch says Stearns will market their success by leveraging a positive stock market and growing equipment demand. “There are all kinds of opportunities out there; we just have to make sure we get to where the opportunity is. Healthcare is a strong industry for equipment finance, and construction is huge compared to what it once was. One good thing we’re good at is digging around and finding what’s out there.” If there is one concern Notch is looking to mitigate, its competition. “Sometimes I’m concerned that the competition will do crazy things as far as pricing and terms,” she says. “We may not have the lowest prices, but we do have the best service. I tell my team that we will do it right and do it fast.”

For Carr, the goal is simply to hit the numbers. “Right now, I believe the outlook is tough for the whole industry, given the political landscape and pending accounting changes. Our goals are to make sure we can stay competitive in a space where there continues to be more entrants, find ways to get deals done and remain disciplined from a pricing and risk perspective,” she says. “We are a group that focuses on good volume, not just volume for volume’s sake. So far in 2014, we’re tracking ahead of plan from both a volume and pricing standpoint. Moving into 2015, our opportunities are brightest in the marine, manufacturing and energy sectors. We’re trying to make sure that our calling efforts are targeted in those spaces where we see some uptick in spending. We definitely see spots in the industry where there is still some runway left. At CapitalSource, we want to make sure we put the right efforts in the right industries.”

Carr says that the company’s recent merger with PacWest Bancorp gives her team a larger box from a pricing standpoint, providing some stability in an uncertain political and economical environment. “As the equipment finance world gets more competitive, we have a more competitive cost of funds to help us stay in the game due to the PacWest merger. But at the end of the day, new business volume for the industry as a whole may increase, but there’s also more players grabbing a piece of the pie, so it may be more difficult for each individual institution to hit their numbers.”

Setting Goals

As we near the second half of 2014, Bakke, Carr and Notch agree that they will call on lessons learned to navigate the coming year. “As I tell my team, the most important thing you can do, and what I try to always adhere to, is focus on integrity and transparency. Those are two of my core values, as well as guidelines for our entire team. Trust is the foundation of the industry,” Bakke says. “As president, my goals target sustainable growth and human capital development with a focus on developing an additional business strategy to complement our existing interest income model, investing in leadership and team development and further establishing Western’s national market presence.”

“I’ve learned that you’re only as good as the team that you surround yourself with,” Carr says. “A cohesive team can navigate some of the most difficult situations and create results. I am going to take that team and build a successful year, with a continued focus on non-investment grade companies in our sweet spot. We will bolster work with clients in the $100 million to $20 billion range, with no limit in geography.”

Notch says that the biggest lesson she’s learned is to chase your dreams. “So many people think they have a dream, but that they can’t accomplish it. But all great accomplishments start with a dream — it fuels enthusiasm and vision. I’ve learned that if I show my employees that I care and I truly do listen, they’ll give me 110%,” she says. “It’s one of my goals as senior vice president and general manager to foster my teams’ goals and grow them within the organization. I am always working to keep them cross-trained, to uphold communication and always listen. I have a lot of pride in my team. Without them, we’d have nothing.”

Those teams are the building blocks of the industry, Bakke says. “Each of us plays an important role in the continued growth and success of our $827 billion industry. It’s incumbent upon each of us to recruit, develop and afford opportunities to the future leaders of the industry and the thousands of people committed to its success.”

Kelly Wolfgang is an associate editor of Monitor and the web editor of monitordaily.

Leave a comment

No tags available