Weekly Blog by Philip King, CEO of the ICM - 'Watching and learning'

I attended my third Start-Up Loans Company Board Meeting this week, and it was a masterclass.  If you've read James Caan's autobiography, you'll know that he attributes much of his success in the recruitment sector and subsequent businesses to his skill at asking questions, teasing out meaningful responses and, as a result, choosing the right people.

As each director presented an update on what had been achieved in their area of activity since the last board meeting and set out their key challenges, it was fascinating to observe him use questions to unearth underlying themes, and then use further questions to identify the priorities for the month ahead, and commitment to getting them achieved.

It's difficult to pinpoint the specific techniques or words used, hard though I tried since I always like to watch and learn from people I meet.  I guess it's more of an inert talent that just seems to work, and it's amazing to watch in action.

Individuals aside, the progress made in the last 60 days is incredible and the next 60 days are going to be really exciting as Start-Up Loans become available and the scheme fully operational. Watch this space for more details to follow and, in the meantime, I've been reminded of the power of people-watching and learning. I'll keep hoping that some of the positives rub off on me now and again!

To find out more about the Institute of Credit Management visit www.icm.org.uk or follow Twitter Http://www.twitter.com/ICMorg and http://www.twitter.com/philipkingicm

Weekly Blog by Philip King, CEO of the ICM - 'The case of the pickled onion'

I belong to a Vistage Chief Executives Group which provides its members with the opportunity to hear expert speakers, to share issues with other Chief Execs from different unrelated sectors and industries, and coaching. I attended a session yesterday with a workshop on negotiation run by Malcolm Smith.  He was one of the best speakers I've heard and his style, passion and energy were very impressive.  A couple of things seem worthy of mention.

We hear a great deal about large retailers exploiting smaller suppliers by demanding long and extended payment terms, and one of the things I always say is that this behaviour isn't restricted to the issue of credit. Buying power will manifest itself across all areas including credit terms, margin, price, rebates, packaging and so much more.

Malcolm shared a story from earlier this decade about how a supplier in the US was put out of business by the behaviour of a large retailer.  I don't want to go into too much detail here but, in essence, a small supplier won a contract to supply the retailer with its pickled onions which would retail at their almost standard price.  Buoyed by the prospect of massively increased sales, the company expanded by setting up new processing plants and scaling up to meet the expected demand and everything went well.  Two years later, after a process involving merchandisers, auditors (who were on the supplier's site for eighteen months), and procurement experts, the selling price was reduced to less than half and the quantity for that price was increased from a small jar of a few grams to one the size of an aquarium that was too big to carry in one hand and was branded as a 'gallon jar of pickles for $2.97'.  Not surprisingly, we were told, the company went out of business and I guess it's a case of the classic ‘if it sounds too good to be true, it probably is’.

I understand how difficult it must be to resist the demands of a large customer when that customer might be the gateway to a brilliant future but, if the ultimate price is too great, what's the point?  I've been quoted frequently saying that businesses shouldn't just roll over.  First say no, then get back to the table and negotiate what can be obtained in return, before finally walking away if that's the only option.  Accepting business, however good it seems, at suicidal terms can only be a recipe for disaster.

One of the things Malcolm talked about yesterday was the need to have a list of ‘tradables’ that could be introduced to prevent the negotiation being only about price.  I was delighted that one of the key ‘tradables’ on his list was payment terms – "yes, I can reduce the price by x% if you guarantee to pay me within 14 days rather than your standard 30, 60, or 90 days".  The thing he clearly understands that so many businesses, politicians and others do not is that payment terms are as much a part of the overall business transaction as price, colour, delivery or anything else.  When payment terms are left to be discussed after everything else has been put to bed, the only loser is likely to be the supplier!

Weekly Blog by Philip King, CEO of the ICM - 'Just the job'

Some of you who know me will know that, since I spend a fair amount of time on the road, I am an avid listener to audiobook biographies as I drive.  Last weekend I finished listening to the biography of Steve Jobs by Walter Isaacson. The audiobook is unabridged, and on 20 CDs lasting 25 hours so it took a few weeks, but what a listen and what a story!

  

I wouldn't suggest that he was an ideal role model for, in many respects, the book suggests Jobs' style and communication skills left much to be desired.  Nevertheless, he had some qualities without which Apple wouldn't have grown from a start-up in his parents' garage to the world's largest company, and without which the Apple products wouldn't have earned the reputation they have for simplicity, quality and intuitive use.  He brought ideas, art and technology together in ways that invented the future.

  

His ability to focus on a small number of projects or details to the exclusion of everything else allowed him to ensure they received absolute and undivided attention.  His relentless drive for perfection meant he never settled for second best and never compromised any of his design principles.  His ability to see the future for his and other products and predict likely trends enabled him to spot opportunities in the market that would otherwise have missed and indeed were often missed by other players already in those very markets.

  

Some leaders push innovation by being good at the big picture, others by mastering details, but Jobs did both relentlessly and delivered a range of products over 30 years that transformed whole industries.  He quoted Henry Ford as saying "If I'd asked people what they wanted, they'd have said a faster horse; our job is to show people what they can have"; Jobs believed Apple should show people what they were going to want before they knew it themselves; he said Apple's task was to read things that were not yet on the page.  When you look at the graphical interface introduced on the Mac, iTunes music downloads, iPods, the iPhone and, most recently, the iPad, it's hard not to accept that he did exactly that.

  

Perhaps the most interesting aspect of his personality was his frequently cited "reality distortion field' which resulted in him seeing things as he believed they should be rather than as they really were, and in him refusing to accept that something couldn't be achieved.  At the end of the book the author says that almost all the many people he interviewed would share a litany of examples of how badly Steve treated them but end by saying how he got them to do things they never dreamed possible and which they didn't believe they were capable of.

  

If you get the chance, it's a cracking good read (or listen) and has some great good and bad examples from both of which there is much to learn.

To find out more about the Institute of Credit Management visit www.icm.org.uk

Weekly Blog by Philiip King, CEO of the ICM - 'Promoting the credit profession across government'

I spent most of yesterday in a room at HM Treasury for a workshop with representatives from a number of government departments. We were discussing and exploring debt management across government, and I was the non-governmental participant invited to bring a perspective from the private sector and the wider credit profession. It was an interesting and fascinating day where a wide range of issues and views were expressed.

It would naturally be wrong to detail our discussions but suffice to say I was pleased to be able to share my thinking – as so often expressed in these blogs – about the importance of professionalism in credit management, the importance of providing a career pathway to that professionalism, and the importance of recognising that professionalism when it is achieved and delivered.

We explored the core values, behaviours, and skills required in a credit professional and there were no surprises in the discussion output. The effective credit professional has attributes and characteristics that are common regardless of the sector or industry in which he or she works and, of course, the ICM plays its part in bringing these attributes to the fore. Whether it is through our learning and development short-courses and qualifications, our Continuing Professional Development scheme, or our networking activity made up of branch, regional and national events and online forums, the ultimate objective is the same: to promote and enhance professionalism in our credit community.

Many of our members work in the public sector and add real value to their organisations; it was good to explore how that value might be further enhanced.

Finally, the LIBOR scandal that has overwhelmed us in recent days makes me wonder if any of the participants were members of professional bodies and subject to ethical codes. If so, I hope those professional bodies will be opening files within their complaints and disciplinary regimes. Very occasionally we have to deal with complaints and take action against an ICM member under our Ethical Code and it is right that we do so. Integrity is a fundamental part of the professionalism we all promote and want to see.

To find out more about the Institute of Credit Management visit http://www.icm.org.uk/ or follow http://www.twitter.com/icmorg or http://www.twitter.com/philipkingicm