Trends in Performance Metrics

The American car loan just hit a wall. Nearly 5% of U.S. auto loans are now 90+ days delinquent. That’s the highest level since the Great Recession. Repossessions topped 1.7 million in 2024, and the pain is now spreading well beyond sub-prime borrowers. On top of that, the average new vehicle now costs over $50,000, according to Kelley Blue Book. Loan terms are stretching past 72 months, interest rates remain painfully high, and more borrowers are finding themselves upside-down. Even Jamie Dimon is waving the caution flag, warning that “cracks in the consumer” are showing up first in auto credit. “When you see one cockroach, there's probably more.” When I started my career as a banker, auto loans used to be the most “sacred” payment in the household. People paid the car note before the credit card. Not anymore. Household fragility in a higher-for-longer world, where even middle-income borrowers are falling behind. And many of you don’t really understand your customers from a household perspective. If auto delinquencies are the cockroach in the coal mine, it’s time you start listening. #Banking #AutoFinance #Economy #Fintech #CreditRisk #Lending #CommunityBanking #Data #communitybanking #creditunions #automanufacturing #autodealers

Being from Michigan, motor vehicle sales are critical to the health of my state’s economy. Beyond looking at sales numbers from the Bureau of Economic Analysis, the data on delinquency rates of auto loans can be helpful to understand consumers’ abilities to finance their purchased vehicles. Two charts below from the New York Fed’s most recent household debt and credit report. Thoughts: •Top chart shows the percent of auto loans that moved into 30+ day delinquent status. That figure is 8% for Q4 2024. The good news is that this 8% figure suggests that the upward trend of loans moving into delinquency is flattening, albeit about 100 basis points above pre-COVID levels. •Bottom chart shows the percent of auto loan balances that are seriously delinquent (90+ days). Here we see a continuing upward trend, albeit still below pre-COVID levels. This suggests that roughly 5% of the balance of auto loans has an increasingly lower probability of being repaid by borrowers. •The one thing a bit scary about the current delinquency rates are that the median credit score of originated auto loans has trended upward over time (it was 722 for the most recent quarter of data). Implication: as with credit card debt, auto loan debt is showing mixed signals about consumers’ abilities to finance their auto loans. While we have seen the percent of loans moving into delinquency flatline, the percent of loan balances seriously delinquent is rising. This suggests any significant shock to the cost of motor vehicles in 2025 will be a bad sign for consumers. #supplychain #supplychainmanagement #economics #markets #freight 

Most L&D professionals learned the Kirkpatrick Model early on. Fewer have seen it applied beyond Level 1. Here's what each level can actually look like when you put it into practice, not just the textbook definition. ✨ Level 1: Reaction 🔹 Textbook version: Did learners find the training engaging and worth their time? ✅ In practice: Instead of "Did you enjoy this session?", ask "Was this relevant to the work you do?" and "Could you apply this right away?" ✅ Metric to track: Relevance and applicability ratings, not just satisfaction scores. ✨ Level 2: Learning 🔹 Textbook version: Did learners gain the intended knowledge or skills? ✅ In practice: Replace recall-based quizzes with scenario-based checks. Can the learner apply the concept to a situation they'd actually face? ✅ Metric to track: Pre/post assessment scores on scenario-based questions, not just "did you pass the quiz." ✨ Level 3: Behavior 🔹 Textbook version: Are learners applying what they learned on the job? ✅ In practice: 30/60/90-day check-ins, manager observations, or peer feedback on whether the new behavior is showing up in real work. ✅ Metric to track: % of participants demonstrating the target behavior, based on manager or peer input, not self-reported confidence. ✨ Level 4: Results 🔹 Textbook version: Did the training impact business outcomes? ✅ In practice: Pick one business metric the program was meant to influence, before you build it, not after, and track the change. ✅ Metric to track: Movement in that specific KPI (error rates, time-to-productivity, conversion rates, retention) compared to a baseline. Most programs are measured thoroughly at Level 1 and barely at all beyond it. But Levels 3 and 4 are where the "did this actually matter" conversation happens, and they are also where L&D earns a seat at the table. Which level does your organisation measure consistently, and which one do you wish you could measure better? #LearningAndDevelopment #LnD #KirkpatrickModel #TrainingEvaluation #InstructionalDesign #LearningMeasurement #TrainingAndDevelopment #LnDStrategy

Car Loan Delinquencies Hit Record for Riskiest Borrowers The share of subprime borrowers more than 60 days late on their car loans has climbed to 6.65 percent, the highest level since 1994 according to Fitch Ratings. It is the latest sign that financial stress is spreading across the lower end of the credit spectrum. For many households, the car payment has become the final bill they can no longer stretch to cover. Prices remain elevated, borrowing costs are high, and the last of the pandemic-era savings have faded away. But this is not really a story about cars. It is a story about the consumer. The rise in auto loan delinquencies marks the front edge of a broader shift in household credit. Subprime borrowers are often the first to feel pressure when economic conditions tighten. Many are already paying more than 20 percent on used car loans, carrying credit card balances with double-digit interest, and juggling deferred student loan bills. The same forces pushing them behind on car payments are showing up elsewhere. Overall delinquency rates have reached 4.5 percent, and credit card and student loan delinquencies are rising even faster. Together they signal that many households have exhausted their financial flexibility. This is what a late-cycle economy looks like. Wage growth has slowed, job openings are shrinking, and the cost of essentials like insurance, rent, and groceries remains stubbornly high. The job market still appears solid, but beneath the surface the cushion between steady and struggling is getting thinner. Car payments are often the first test of that balance. Falling behind there is an early indicator that stress is spreading through the financial system. The macro implications are clear. Consumer spending, which has carried the economy for much of the past two years, is likely to lose momentum as more households turn from spending to survival. Rising delinquencies tend to tighten credit availability and reduce demand for big-ticket items. The impact is gradual, not dramatic, but it accumulates. Economic growth can appear stable even as the foundation weakens from below. At Havas Edge we track this because consumer credit is one of the most reliable leading indicators of behavior. When financial stress builds, it changes how people spend, save, and respond to risk. Understanding where that stress is emerging helps us anticipate when the narrative of resilience will give way to restraint, and how that shift will shape the next phase of the economy.

"Since the pandemic, buyers on auto-dealer lots have encountered surging sticker prices and smaller incentives from automakers to lessen the blow. To afford an automobile, more consumers, especially lower-income families, have resorted to buying used cars and taking out longer loans. Now, more are falling behind on their loans, signaling that lower-income consumers are struggling to afford payments as wages stagnate and unemployment ticks higher. While the economy has remained strong, and Wall Street has kept buying subprime auto loans, the auto market is evidence that not all is well under the hood. The percentage of new-car buyers with credit scores below 650 was nearly 14% in September, roughly one in seven people, J.D. Power said last month. That is the highest for the comparable period since 2016. And the portion of subprime auto loans that are 60 days or more overdue on their payments hit a record of more than 6% this year, according to Fitch Ratings, while delinquency rates for other borrowers have remained relatively steady." https://lnkd.in/eSbFaJaU

Are you measuring what matters in your organization? A comprehensive measure of organizational effectiveness includes much more than profit margins and growth rates. The market and media often celebrate companies that show rapid financial growth or high profitability, leading to a cultural bias towards these metrics as signs of success BUT the tide is slowly turning- more businesses are recognizing the long-term value of a holistic approach to effectiveness and success. Many more businesses are embracing the concept of the "Triple Bottom Line," which measures success not just by financial profit ("Profit"), but also by the company's impact on people ("People") and the planet ("Planet"). HOWEVER 🚨 There is more work to be done! The prioritization of non-financial elements of organizational success can get pushed aside when financial pressures hit or quick results are valued. You have probably heard the phrase "What gets measured gets managed". This is generally true. Quantifying and measuring non-financial aspects of effectiveness, such as employee well-being, social impact, and workplace culture, is hugely important but remains challenging. 💡 Here's some straightforward steps to move you towards a more holistic approach to measuring success: 𝐒𝐭𝐚𝐫𝐭 𝐰𝐢𝐭𝐡 𝐜𝐥𝐞𝐚𝐫 𝐠𝐨𝐚𝐥𝐬: Define what holistic success means for your organization. This could include specific targets related to employee well-being, social impact, and environmental sustainability. 𝐄𝐧𝐠𝐚𝐠𝐞 𝐬𝐭𝐚𝐤𝐞𝐡𝐨𝐥𝐝𝐞𝐫𝐬: Talk to employees, customers, and community members to understand what aspects of your business matter most to them. Their insights can help shape your holistic success framework. 𝐂𝐡𝐨𝐨𝐬𝐞 𝐫𝐞𝐥𝐞𝐯𝐚𝐧𝐭 𝐦𝐞𝐭𝐫𝐢𝐜𝐬: Based on your goals and stakeholder feedback, pick metrics that are meaningful and manageable. For example, employee satisfaction can be measured through regular surveys, while environmental impact can be tracked through energy consumption or waste reduction metrics. 𝐔𝐬𝐞 𝐞𝐱𝐢𝐬𝐭𝐢𝐧𝐠 𝐟𝐫𝐚𝐦𝐞𝐰𝐨𝐫𝐤𝐬: Look into established frameworks (like GRI or B Corp standards for sustainability; Gallups Q12 Engagement Survey for employee engagement or the Denison Organizational Culture Model to measure workplace culture). There are existing frameworks for most known elements of organizational effectiveness so it's just a matter of looking into them. 𝐈𝐧𝐭𝐞𝐠𝐫𝐚𝐭𝐞 𝐢𝐧𝐭𝐨 𝐝𝐞𝐜𝐢𝐬𝐢𝐨𝐧-𝐦𝐚𝐤𝐢𝐧𝐠: Ensure that these holistic metrics are part of regular business reviews and decision-making processes, not just side projects. 𝐑𝐞𝐩𝐨𝐫𝐭 𝐭𝐫𝐚𝐧𝐬𝐩𝐚𝐫𝐞𝐧𝐭𝐥𝐲: Share your progress openly, including both successes and areas for improvement. Transparency builds trust and credibility. 𝐂𝐨𝐧𝐭𝐢𝐧𝐮𝐨𝐮𝐬 𝐥𝐞𝐚𝐫𝐧𝐢𝐧𝐠: Be prepared to adapt and refine your approach as you learn what works and what doesn't. This is a journey, not a one-time task. #organizationaleffectiveness #measurewhatmatters #leaders

“We wanted a culture of accountability and results. We gave employees more flexibility and empowerment and, in return, got much higher engagement and higher performance.” Neiman Marcus Group CEO Geoffroy van Raemdonck Neiman Marcus Group had industry-leading retention in frontline employees, higher productivity and profit -- and made its investors very happy last year. The secret sauce? Allowing flexibility – including in the frontline – while holding people accountable for results. My newest for MIT Sloan Management Review is a deep-dive into NMG and the efforts led by CPO Eric Severson over the past few years, culminating in a highly successful sale to Saks at the end of year. Some quick highlights: 🔸 75% annual retention rate in store associates and 78% in operations (both of which often see 80% turnover!) 🔸 Higher productivity and quality metrics in stores and operations 🔸 High engagement, productivity and retention of headquarters staff – even through an acquisition. Eric learned at Gap the power of apply programs like ROWE – results-only work environments – versus traditional monitoring. “Some leaders instinctively believe that you had to reward people who put in the hours, even if some of them were poor performers in other aspects of their jobs. Those leaders ultimately admitted they passed employees along, as long as they showed up.” Eric described the work his team led at NMG as “freedom about when, where, and how you do your work.” and in return managers had “the right to hold you totally accountable for results.” They did away with the annual performance review and moved to quarterly reviews of progress against goals and professional development – and mutual goal setting for the next quarter. The bigger deal? They enabled flexibility in the frontline as well. Store associates had more control over locations and departments, and tooling to manage customer outreach and merchandising work from home some days, for example. 👉 LOTS more in the column, getting into what they did, how they used metrics and the outcomes they drove. Linked in comments! Flexibility in the frontline and for office-based employees combined with results-based management drives spectacular results. Thanks to Eric Severson, Geoff van Sonsbeeck, Leslie Brokaw and the whole MIT Sloan Management Review team! #Flexibility #Productivity #Engagement #Frontline #Hybrid #RemoteWork #RTO #ReturnToOffice

Loan credit performance. I've been writing about this for a while now, the slow but steady weakening of consumer credit. Credit unions are the main street lenders of the United States and they just crossed a dubious threshold - NCO ratio hits a decade high. We've felt this for several quarters. The weakness is also hitting lower income and younger borrowers for auto lending - a core strength of credit unions. The slower loan growth is more closely tied to their deposit struggles. "US credit unions are grappling with a rapidly rising level of problem loans, in a similar fashion to their banking brethren. In contrast to banks, however, the credit union industry reported slower loan growth in the fourth quarter of 2023, according to S&P" "The net charge-off (NCO) ratio for credit unions was 0.77% in the fourth quarter of 2023, 16 basis points higher sequentially and representing the peak since the first quarter of 2012. The majority of the $670.9 million quarterly jump in NCOs was from used vehicles and unsecured credit cards. NCOs for used vehicles were up 36.1%, or $219.4 million. Unsecured credit card NCOs increased 30.5%, or $222.7 million." "Even with escalating NCOs, credit unions reported a spike in loans that are delinquent for at least 60 days. The delinquent loan ratio was 0.83%, as of Dec. 31, 2023, up 11 basis points from the previous quarter and representing a tie for the highest ratio in the last nine years. Used vehicle loans comprised 27.2% of total delinquent loans and were responsible for 23.4% of the quarterly increase." "Following two quarters of contraction, credit union total shares and deposits were up 0.3% in the fourth quarter of 2023." "Total loans and leases across the industry rose just 0.8% from Sept. 30, 2023, which was the most diminutive growth rate since the first quarter of 2021. Used vehicle loans declined 0.5%, ending a streak of 50 consecutive quarterly increases. Credit unions also cut their balances of new vehicle loans by 0.7%, discontinuing a 10-quarter upward trend. Areas of growth included junior-lien one- to four-family, member business and credit card.' #creditunions #desposits #lending #credit https://lnkd.in/eKHcNdSe

𝐏𝐞𝐫𝐟𝐨𝐫𝐦𝐚𝐧𝐜𝐞 𝐀𝐩𝐩𝐫𝐚𝐢𝐬𝐚𝐥𝐬 : 𝐣𝐮𝐬𝐭 𝐧𝐮𝐦𝐛𝐞𝐫𝐬 𝐚𝐧𝐝 𝐫𝐚𝐭𝐢𝐧𝐠𝐬 ? Appraisals are often seen as a scorecard, a moment in time where performance is measured and rated. But shouldn't we be looking at these another way? Performance appraisals have long been perceived as an evaluation tool and an assessment of what’s been achieved in the past year. But if we truly want to develop talent, we must shift the lens. 𝐀𝐩𝐩𝐫𝐚𝐢𝐬𝐚𝐥𝐬 𝐬𝐡𝐨𝐮𝐥𝐝𝐧’𝐭 𝐛𝐞 𝐨𝐧𝐥𝐲 𝐚 𝐫𝐞𝐟𝐥𝐞𝐜𝐭𝐢𝐨𝐧; 𝐭𝐡𝐞𝐬𝐞 𝐬𝐡𝐨𝐮𝐥𝐝 𝐛𝐞 𝐭𝐡𝐞 𝐥𝐢𝐠𝐡𝐭𝐡𝐨𝐮𝐬𝐞 𝐭𝐡𝐚𝐭 𝐬𝐡𝐨𝐰𝐬 𝐚 𝐝𝐢𝐫𝐞𝐜𝐭𝐢𝐨𝐧 A holistic appraisal is much more than ratings and checkboxes. While performance metrics and KPIs provide structure, they don’t capture the full picture. What about the challenges an employee navigated? The skills they acquired? The impact they created beyond defined goals? Their aspirations for the future? If appraisals only measure the past, they miss the opportunity to shape what comes next. This is where feedforward becomes critical—shifting the focus from evaluation to evolution. Instead of just identifying gaps, conversations should center around where an individual wants to go, what skills they need, and how the organization can support that journey. The shift from once a year review to a continuous feedback culture is just as important. Growth is built through ongoing dialogue, coaching, and alignment between individual potential and business needs. When approached this way, appraisals build careers and strengthen the organization’s future. What practices have you experienced/ implemented that made your performance appraisal mechanisms richer? #PerformanceManagement #Feedforward #Appraisals2025

This article in MIT Sloan Management Review on hybrid work by Nick Bloom, Prithwiraj Choudhury, and Brian Elliott confirms what we've been documenting for years: This isn't a location problem. It's a leadership capability gap. While too many executives still debate office attendance, their more forward-thinking, innovative competitors build the leadership AND operational capabilities that a high-performance flexible work model--not just "hybrid"--requires. The research and case studies that the article cites get critical points right: ✅ "To date, no peer-reviewed research shows a benefit to a rigid five-day office model." ✅ Synchrony's CEO focusing on measurable results over presence. ✅ Atlassian's teams creating working agreements. ✅ The reality that only 25% of managers of distributed teams get leadership training (and we wonder why they are reporting historically low levels of engagement and burnout!) But this alone doesn't close the capability gap. What I'm seeing in our work with organizations: 👉 Teams need more than permission to create norms. They need facilitation frameworks for making planning and coordination decisions within the context of broader organizational parameters that all levels of leadership have aligned behind. 👉 Managers need consistent protocols, tools and training to guide the conversations about how, when, and where their specific work gets done—not just implement generic policies. This includes defining: → How does work get prioritized and coordinated for your business? → When do teams need to be together in person, and not in person, to achieve specific outcomes? → In what spaces and places (in person and virtual) does different work happen most effectively given your constraints? The article does mention the importance of space redesign and technology but a high-performance flexible work model integrates technology capabilities, and workspace design into the defined parameters as one coordinated way of operating across places, spaces and time. This requires moving: ✅ From debating location to starting with the work and defining how, when and where that work happens best, and ✅ From treating flexibility as policy compliance to building it as strategic capability. The evidence is clear. The business case is proven. Organizations that build these operational and leadership capabilities have a competitive advantage and will outperform those still debating badge swipes. What's the biggest capability gap you're addressing to help your organization achieve high levels of sustainable performance working flexibly? #FutureOfWork #FlexibleWork #RTO #HybridWork #Leadership #WorkplaceStrategy #HighPerformanceFlexibility #ReimagineWork