Chairman's Message

NACM Chairman's message to credit managers, credit risk managers, collections managers and credit departments
Meet Your 2018 National Chairman

Kenny Wine, CCE


Like a lot of credit professionals, Kenny Wine didn’t grow up dreaming he’d one day manage a corporate credit team and become chairman of the National Association of Credit Management.  When he started at Arkansas Tech University in the 80s, he had ambitions of becoming a college football player and seeing where that might take him.

After a year or so, Wine, CCE, director of credit for the Southeast Region at Joseph T. Ryerson Inc., figured he wasn’t big enough and didn’t have the determination to make playing the sport a realistic way to pay his bills. He’d always enjoyed observing the movements of the stock market and tracking the world economy in the news, so he earned his degree in economics and finance. Then he went to work for John Latham, the former CEO of Madison Guarantee who got swept up in the Whitewater investigations and was eventually jailed for bank fraud.

Wine worked for Latham for several months before Latham was arrested by federal agents and the business was closed. Despite his brief brush with infamy, Wine carried on studying for his exam to get into the securities industry.

That didn’t work out as planned, however, and Wine took a job in consumer credit at what was then Chrysler Financial. He worked on repossessions and consumer loans at the time Chrysler had come out with its popular minivan and business was booming. After more than a decade on the job, the industry downshifted and firms began to consolidate. Wine’s office in Little Rock closed, so he found a job at the cosmetics firm L’Oreal in its Maybelline division. That’s when his first experience in corporate credit began.

Learning Credit Nuances

Starting out as a credit supervisor, Wine spent a lot of time calling customers about past-due accounts. He was fortunate to have a supervisor who took a chance on him and got him involved in NACM. Al Hall was his first mentor in credit. “Everyone needs a mentor in the credit industry to help navigate the complexity of the field,” Wine said. Hall sent him to a national mass merchandisers’ trade group meeting in Manhattan.  “My first impression was that credit had a lot more layers to it than I thought.”

Beyond making collection calls, a forward-looking credit professional studied financial statements with very large balances and even delved into the corporate strategy of customers to determine if his own company was a viable part of that strategy.

“It was a very eye-opening experience,” he said. “You saw some really smart people who understood risk, who would continue shipping  when  the  customer  didn’t seem financially sound and who knew when to get out. A lot of the lessons learned weren’t in books.” He saw the importance of monitoring a company’s debt-to-income ratio, but also when the timing was right to ship if the company had inventory, capital investments or other factors that made it a viable partner. He picked up on the importance of evaluating the likelihood a CEO would make a quick exit if he or she was someone freshly picked by the owners of an equity group that had held the property for six months versus someone who was third generation of a family deeply invested in the firm.

Beyond academic considerations, Wine said he learned from his early mentors—credit leaders of major corporations in different industries, like Kevin Carter at Energizer Holdings Inc. or Pete Knox, CCE, with Nestlé—the value of weighing the human element in granting credit. “They had experience and understood credit and the human  side of the equation,” Wine said. “They knew there is more to it than numbers on a piece of paper. They helped me understand not only the risk of a customer, but how the credit department can be an advocate for sales, rather than the sales prevention department.”

He was encouraged to stand up from behind his desk and go meet with his customers to develop relationships with them, so that pleasant conversations struck up at the beginning can serve as an entry point to stronger conversations when conditions are more difficult. “Some people aren’t going to talk to you, but it surprises me when I visit and a customer says: ‘You’re the first credit guy that’s ever come to visit me.’ Hopefully that will help me in the future.”

Over the course of a decade, he also learned the value of understanding more about the major players within the trade creditor’s own organization, from the direct manager to the heads of operations and logistics to the CFO. “You need multiple points of contact,” Wine said.

In 2008, Wine decided to leave L’Oreal but stay in Little Rock. He found a job at metal processing and distribution firm Ryerson, which went private and opened up an office in the area. He was able to bring a few of his old staff members from L’Oreal with him as their office was closing, so everything worked out well. People have asked him what it was like transitioning from working with companies like Walmart and Kmart when he was at L’Oreal to corporations like Caterpillar and Trane. “The only difference is the smell,” he said. “Typically, credit is credit. A lot of it’s about relationships, the five C’s of credit, and do your customers have the ability and willingness to pay. We’re always trying to develop that.”

The Past and Future of Credit

The rise of technology has been a predominant theme in the course of Wine’s career in credit. When he started in the late 80s, he worked from call lists and handwritten notes. Today, enterprise resource planning (ERP) systems and other forms of software incorporate advanced data analytics that can be used to more quickly target high-risk customers and begin collection actions, keep and share notes, spot trends, track SEC filings, automatically calculate important ratios and store it all to be recalled at any time. “Technology is the piece that’s really changed our industry,” he said.

As with the manufacturing sector, a lot of corporate credit work has been outsourced. Credit departments that consisted of 30 to 40 staff members have shrunk in many larger firms to a third of that size, he said.

The prevalence of credit cards to make business-to-business transactions has increased, making surcharge fees more of a factor in a company’s bottom line, Wine said. Figuring out how to earn the lowest surcharge fee is paramount to mitigating cost increases.

Digital security is another key factor for any credit department. It just wasn’t there decades ago, he said. For instance, “We tokenize the credit card so we don’t keep card numbers anywhere in our system. Then we don’t have to worry about data breaches.”

What has not changed over the arc of Wine’s career is the need for credit professionals to educate themselves and keep up on subjects, such as the latest changes to bankruptcy or lien laws, how to read financial balance sheets and how to improve negotiating skills. “NACM helps our group with that,” he said. His credit team members, who are spread across the United States, attend NACM’s Credit Congress, the Graduate School of Credit and  Financial Management,  online  classes and regional affiliate meetings in rotation. “You have to educate people and spend money to take advantage of continuing education. You need analysts that understand so they’re making good decisions every day.” He said he’s seen people in trade group meetings that went for trade references but didn’t educate themselves sufficiently and ended up getting burned in bankruptcy filings or preference actions, or because they didn’t know the proper lien filing requirements.

Going forward, Wine said rising credit professionals will need to be personable, like a salesperson who sells to their customers so they’ll pay faster. They’ll have to be comfortable navigating the IT ecosystem, and be able to quickly move information to and from their customers as well as to management. “They’re going to need to be knowledgeable in a multitude of subjects, not just one subject, and I think that’s where NACM can help gain them that knowledge.”