Weekly Blog by Philip King, CEO of the ICM - 'Joined up thinking benefits customer'

I recently experienced, at close hand, the efforts of the police, local authorities, and other agencies attempting to work together to protect a vulnerable child. What it demonstrated to me is that acting independently creates frustration for all those involved or affected, prevents the best outcome being achieved and, indeed, stands in the way of getting the required result.

The same could be said of business. In far too many businesses we hear about the 'them and us' attitude that exists between sales and credit departments and how neither party is at fault when something goes wrong.

Take for example my own experience last week when I checked into a hotel ahead of the ICM Regional Roadshow in Sheffield. It was late and I was tired. I took the lift to the fourth floor only to find that the key card wouldn't open the door to room 411 (a not unusual occurrence in my experience) so I returned to reception and had the key card re-coded. The new key worked perfectly but as I stepped into 'my' room I realised from the bags on the bed and the clothes on the floor that somebody had got there first.

I returned to reception and was moved to a new room that was mercifully vacant. On my third visit to the Reception desk, I asked the very pleasant young lady why she didn't feel the need to apologise for the inconvenience I had been caused. Since the card coding machine malfunction wasn't her fault, and someone else had made the error that resulted in me being booked into an already occupied room, it was clear - in her mind at least - that there was nothing for her to apologise for!

Wherever we sit in an organisation, but especially as credit professionals, when we communicate with customers, suppliers or any other stakeholder, how we respond reflects on our business and how it is viewed. As Glen Bullivant reminded us at the Sheffield Roadshow last week, credit management - whether we like it or not - is customer service because we face the customer, we talk to the customer, and we manage the customer. Doing it well, and working effectively with all other parts of the business, is just one way in which we add real value. I'm reminded that someone once said: 'There's no pleasure in knowing the hole is in the other end of the boat'.

Oh, and if you were in room 411 at the Park Inn, Sheffield last Wednesday, you had a very lucky escape!

Weekly Blog by Philip King, CEO of the ICM - 'Pride in Professionalism!'

A couple of weeks out of the office and I'm back raring to go. I looked at only a few emails, turned off Twitter and was generally very well behaved - I think even Mrs K was surprised! While I was absent, I gave away my daughter on her wedding day which was as perfect as we could have hoped for, spent a few days in the North West of England, and watched the world going mad. Riots in London and elsewhere, the US economy being downgraded, and a possible European financial meltdown as just a few examples. So back to reality and I've decided not to join in the bigger debates that have been going on while I've been away since all the arguments have already been expressed and in better words than I can use.

I do want to share some thoughts on professionalism though. The Institute of Credit Management (ICM) delivers cash for business by empowering credit professionals working in those businesses to be more effective, and a couple of emails received from ICM members during my holiday reminded me of just how important the credit management role is. Members of the ICM are professionals working in the field of credit management who recognise the importance of what they do and are keen to develop their own knowledge and careers, whether that is through qualifications, training courses, keeping up-to-date through reading Credit Management magazine and ICM Briefings, attending regional networking events, participating in online forums, or engaging in other ways. In short, they are showing pride in being professional by belonging to an organisation that supports them, works for them, and encourages them.

And yet I meet many people working in credit management who, although they recognise the value they add, don't see it as a profession in its own right. Many of us would argue rightly that it is a challenging, rewarding and worthwhile profession, and needs to be seen as such. We have made significant strides in recent years in gaining recognition but we need to do more. The new Continuing Professional Development scheme the ICM is piloting is an example. More important though is getting those of us who do the job to make sure our peers and business colleagues (above and below) understand that we're working in a profession we're proud of and is vital to the sustaining and growth of business and the economy.

If you know someone who's working in credit management and hasn't yet got round to joining the ICM, give them a nudge or send me their details and I'll nudge them. The more members we have, the louder our voice will be and I'm on a mission to raise the volume - let's get all credit professionals to show Pride in Professionalism!

Guest Blog by Rob Beddington, Director of Commercial Relationships at the ICM - 'The Ratings Game'

In my (too many) years writing about the credit industry, the importance of accurate credit ratings or limits has always been a hot potato, whether a particular decision is made about a small start-up or a multinational going through a sticky patch. This situation could not be better illustrated than the one we are seeing in the fallout from the US debt crisis, where the last minute deal by Congress to increase its credit card bill has brought differing reactions from the three main ratings agencies. Although Moody's has given the lawmakers the benefit of the doubt, it has already assigned a negative outlook to the USA's long -standing AAA rating, which could lead to a downgrade in the medium term if the proposals go off track. Fitch is currently maintaining its AAA rating. That said, the agency is conducting a thorough review, with a further announcement due at the end of this month. A negative outlook may be applied when this review is concluded.

Which, at the time of writing this blog, leaves Standard & Poor's, who had already placed the US on negative watch last month. The proposals by Congress to impose budget savings of $2.1 trillion are about half the amount S&P were seeking if it were to support a continued AAA rating. With its rivals showing their hands early, and severe pressure to maintain the current rating, S&P's decision is eagerly awaited. A downgrade now would be surprising, but it is still possible.

Whatever S&P's decision, if we were to apply sound credit management practice to the situation, some sort of downgrade must surely be handed down, especially if the proposals are not seen through. The eleventh hour agreement may improve the USA's ability to pay its bills now, but commercial credit ratings are not based on that ability alone. Businesses with a sound credit policy extend credit based on full financials, they consider the management team, the marketplace and much more. In our day-to-day lives, any business operating well beyond its means, relying on increased borrowing to fund its operations and obligations and promising to cut expenditure in the future, does not warrant a top rating. In the case of the USA's rating, we must also add into the mix the continued political game-playing, not forgetting probably the biggest factor, the current poor performance of its economy, an upturn in which is crucial to the success of the new deal.

As for what a downgrade would mean to the USA, the rest of the world, and indeed the dollar as the world's reserve currency, this is the subject of much debate, but an accurate credit rating would certainly be a good start!

Closer to home, but staying with sound credit management practice, it is very encouraging to see the ICM's UK Credit Managers' Index (CMI) moving from strength to strength. Our latest quarterly survey sees almost three times the number of participants as the previous Index, thanks to the engagement of our members, members of the ICM Think Tank and their organisations. With this level of participation, the Index promises to offer an increasingly detailed insight into the thoughts, attitudes and levels of confidence of UK credit professionals. Full analysis will be published soon, and look out for the next ICM UK CMI in Q3.

Philip King returns on 18 August.