Start-up opportunities seem to find me! This is the third time that I’ve been involved with bringing a new business to the UK asset finance marketplace. There’s certainly no point in getting older unless you get a bit wiser. Having a demonstrable track record in this particular area, I would try and distil the "lessons learned" down to avoiding the pitfalls that one can easily fall into, as well as embracing the challenge of the new.
The pitfalls are potentially many. Therefore, if one was to draw up some form of management checklist, I always start with a good old-fashioned assessment and quantification of the market opportunity. This is a cold, hard, objective analysis of the market, the potential opportunities as well as the internal bandwidth of the organisation’s capabilities and competencies. The outputs from this work is a strategic road map and a set of priorities. Organisations cannot easily make giant leaps. Within my frame of reference, success appears grounded in making lots of baby steps towards the agreed goals and objectives. The road map helps management, as well as other internal stakeholders, ensure that all the baby steps are in the right direction and that they are contributing toward a common purpose.
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Recruitment is next. Cost may walk into a business on two legs but I advocate recruiting the best people you can find and afford. Recruitment is like a marriage, if you get it wrong, it will cost you a lot of money. Therefore the downside risks associated with recruitment and small teams needs to be minimised. Recruiting by way of demonstrable competencies and proven market track records is the start point. Also crucial to the process is aligning individual recruitment to the values of the organisation. However, it’s vital to ensure that the "fit" between the organisation and the individual is right. In a start-up the fit is absolutely vital.
In the context of ABN Amro Lease as a start-up, the recruitment "pixie dust" is two-fold. First, it’s about identifying those people who can look beyond what exists or does not exist today. I call them "pathfinders". A pathfinder is someone who is prepared to set out on a journey without necessarily knowing that everything they need to undertake the voyage is in situ and nailed down. They are people who are generally resourceful, passionate about customer service and above all confident in their ability. They are prepared to take a calculated risk. Their bias for action is not to sit back and wring their hands. Rather it is to see the opportunity and challenge associated with being able to contribute to the building of infrastructure, processes, controls, and distribution networks. In short, recruit only those who want to make a difference.
Secondly, in the UK, it’s about identifying those people who can work across and demonstrate empathy with different cultures. The Dutch are renowned for being direct. We Brits are generally regarded as not always being able to say exactly what we mean. In business, and certainly in a start-up scenario, there’s no time for wasting, or for a lack of clarity. In the context of ABN Amro Lease, as we seek to transition from a Dutch-centric organisation into a more international oriented business. The international branch operations must be big enough and vocal enough to play their parts (both individually and collectively) in helping our Dutch colleagues make this transition. After all, their world is changing as well and will continue to change for the foreseeable future.
The simple facts of some 450km between our Utrecht head office and the London branch, as well as a time difference of one hour exist. These geographical aspects may not seem important, but when one is looking to provide clients with the best service possible it demands that staff at all times remain professional.
Challenge culture
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By GlobalDataIn summary, a start-up is not everyone’s cup of tea. If it’s not in your DNA then my advice is keep well away. At ABN Amro Lease we are a "challenge culture" It’s very much based on the working belief that there is no monopoly on common sense and no such thing as a stupid question. I believe that a culture of this nature both creates and sustains a learning and fast-moving organisation.
The "pixie dust" element above is supported by good communication. Predicated upon clear goals and objectives, effective communication is essential. Whether this is through formal communications, town halls, one-to-ones, coaching and mentoring sessions – it does not matter. The important thing is that it is consistent and on message.
Distribution is where I would turn next. ABN Amro Lease is a bank-owned organisation and has operated as a brand in the UK since the middle of the 19th century. We go to market on a multichannel basis. Our proposition is still developing. However, not only are we a lessor that is prepared to assume real asset risk, we’re also one of the few players in the UK market with appetite for long-term committed facilities. We ideally look to finance assets that are mission-critical to the client’s underlying business, that demonstrate real economic value throughout the corresponding financing term, and which have readily accessible, transparent and relatively liquid secondary markets.
On the indirect side, we go to market via a small number of UK brokerages. These relationships largely pre-date the branch opening on 2 June and our desire is now to build on the excellent work of the cross-border team in setting up these relationships. We’re working hard with selected business partners to sharpen our customer service proposition in this key business area. Now that we have all our relationship managers in place, our capability to support our broker partners is much improved. ABN Amro Lease NV (UK branch) now has a permanent establishment in the UK and by year-end will be at least 17-strong.
We also go to market working on a direct basis, as well as in conjunction with our bank colleagues. Indeed, we’re very proud of our first award in this context. In conjunction with our colleagues in ABN Amro Commercial Finance we recently won the "Deal of the Year" in the Midlands business community. We hope that this will be the first of many such awards. Our direct capability may be growing, but it will not in any way whatsoever conflict with our broker distribution activities.
Whether on a direct or indirect basis, there’s nothing of a rocket scientist nature about what we are seeking to do. ABN Amro Lease will focus on financing hard iron assets where we can literally "kick the tyres" or the tracks. Assets with good loss given default (LGD) characteristics have a strong fit with our moderate risk profile.
Embracing the challenge of the new is perhaps the final point. ABN Amro Lease is a regulated business. I have been personally challenged with again becoming an approved person and relearning the myriad complexity of the UK regulatory framework and the implications surrounding conduct. In doing so, I believe that one can discern where regulation is going and therefore discern what the likely future implications are for the UK asset finance market. We have some interesting times ahead!
George Ashworth is UK managing director at ABN AMRO
