Irving H. Rothman, CEO of Hewlett-Packard Financial Services, said he's built successful financial services firms around the idea that the employees who are closest to the customer should be empowered to make decisions to help their clients — and that while it may seem obvious to put the customer first, the financial services industry doesn't do nearly enough to build its business model around customer satisfaction.
Rothman spoke Tuesday to the New Jersey chapter of Financial Executives International at The Manor, in West Orange, where he signed copies of his book, "Out-Executing the Competition."
A Bayonne native and Rutgers graduate, Rothman helped lead a team in the late 1980s that implemented what at the time was a novel customer-centric approach at AT&T Capital Corp. — the captive financing arm of AT&T that financed telecommunications equipment leases and purchases by small businesses and large companies. Rothman became group president of AT&T Capital, and following the sale of the company by AT&T in 1996, he was recruited by Compaq Corp. to create a global captive financing and leasing company, Compaq Financial Service Corp., which became Hewlett-Packard Financial Services following the 2002 merge of Hewlett-Packard and Compaq.
HP Financial Services, based in Berkeley Heights, has 1,500 employees in 51 countries, more than $12 billion in assets and more than $3 billion in annual revenue. Rothman said the company is involved in financing, leasing and asset management for HP's corporate customers all around the world.
When he first began talking to Compaq about creating the new captive finance company, Rothman was told that any deal larger than $10 million had to be approved by the company's board. Instead, he persuaded Compaq to allow the size deal that could be decided locally to grow as the company's equity grew.
"We didn't mind going to the board for the really big deals, which were few and far between," he said. "We wanted local authority to handle basically 85 (percent) to 90 percent of the deals we wanted to do."
That operating freedom, Rothman said, "is a very important differentiator for us — it gives us a leg up and an opportunity to out-execute the other guy." But it's not an endorsement of anarchy, he said: "You need a set of clearly articulated operating principles and values so you keep everyone moving in the same direction. Senior leadership is very involved in the day-to-day operations of the business."