Motivate like Google
With more than 50,000 worldwide employees and offices across the world, Google must keep its employees working hard and efficiently. To that end, Google installed a number fun gadgets and perks in their offices. And now the company needs to make sure its workers are not distracted. An article from Business Insider says that Google’s Advanced Technology and Products (ATAP) team accomplishes this by instituting a two-year deadline on every project. At the end of a week, employees are reminded that they’re 1% closer to the deadline. (Don’t worry, the math works.) The idea here is that motivation needs to be balanced with hard-and-fast deadlines, which is an important lesson for auto financiers to consider as their businesses expand, and, boy, have they been expanding lately.
Good at Identifying Risk / Terrible at Fixing It
After the credit crisis, a wave of auto finance companies installed enterprise risk management (ERM) programs. The question is, though, Are they working? The answer across all industries: not really. The Wall Street Journal reported last week that while 65% of all companies have ERM programs, less than 1 out of 5 executives think their company is effectively managing risk. Based on the survey conducted by APQC, companies are successful in identifying potential risk factors, but then don’t strategize on how to fix those risks. Even more alarming, 66% of companies said they do not have a method for ensuring that strategic risks is included in the company’s strategic plans, and 43% do not have a solid plan for reporting risk assessments to the board. The report did not offer specific data on auto finance and ERM — which is why we hope these stats are not emblematic for the industry. We put emphasis on the word “hope.”