Weekly Blog by Philip King, CEO of the ICM - 'A reason for good cheer'

As we enter the Christmas break, it's good to pause and reflect on the last 12 months.  Our Regional Roadshow programme, for example, has been really successful and it was great to end the year with a superb event at the premises of Schuco in Milton Keynes.  It was an excellent venue with great speakers, and proved to be a fantastic example of the ICM credit community at its best.

 

Looking at our wider activity, we've had some notable success too.  By the end of the 2012 there will have been 125,000 downloads in the year, over 50,000 more than in 2011, and almost 400,000 downloads in total of the Managing Cashflow Guides that were written and launched in 2008.  The Prompt Payment Code (PPC), which we host and administer for BIS, featured in a November House of Commons debate when the ICM received no less than eight mentions, and we've seen a surge in sign-ups in the last few weeks - particularly from large organisations - with signatories now standing at over 1,240.

 

Even more encouraging however is recent research by Experian showing that the PPC has had a positive effect on payment times.  It found that on average those who had signed up to the Code paid five days earlier than those who had not.  Furthermore, there has been a sizeable improvement over the period amongst PPC signatories who now pay 12 days quicker than in December 2008.

 

The Code was launched late on Christmas Eve, 2008 and, while I accept that there is much much more to be done, it's great to see independent evidence that it is has made some progress in changing the culture it was designed to achieve.

 

I'm looking forward to an exciting 2013.  In the meantime, may I wish you a very happy Christmas and a peaceful, prosperous and productive New Year.

 

Weekly Blog by Philip King, CEO of the ICM - 'A Christmas wish'

I asked a question on the ICM Credit Community group on LinkedIn recently and have had some interesting responses.

 

The question was: if Father Christmas were to bring you one gift that would really help you and/or your team be more effective in 2013, what would it be? There's still time for you to respond at http://www.linkedin.com/groups?gid=94851&trk=hb_side_g but posts so far can be split into three broad categories: practicalities; economic outlook; and professionalism.

 

The first comprises a wish-list including such things as: a crystal ball; a dictionary and thesaurus; more time; a cure for arthritis; better management systems; paying clients; sight of customers' management information; and a tool to force people to tell the truth! The second includes a wish for a steep economic upturn and a positive, optimistic view of the world. And the third, professionalism, covers: the desire for more networking; investment in the recruitment, retention and development of good credit people; and the resulting improvement that such investment delivers.

 

I'm afraid the ICM's ability to deliver some of the aspirations in the first category is limited, particularly in the field of arthritis (a cure for which I would certainly welcome if it were possible) but I'm pleased that our members are able to influence the second through our contact with the business/political community. I'm even more pleased that we're able to play a significant role in achieving the desires expressed in the third.

 

As I've often said in these blogs, we are all about driving professionalism, and developing services to support this ambition. As the recognised standard in credit management, our motivation is to raise the professionalism of people working in credit management by providing them with the opportunity to develop their skills, knowledge, and expertise in such a way that credit management is seen more and more as a profession in its own right.

 

I'll share some more thoughts from the discussion next week and also the wishes of the senior management team at ICM HQ; in the meantime I'm off to prepare for the ICM's Regional Roadshow in Milton Keynes where I'm looking forward to meeting a large number of our members and learn from an excellent panel of speakers.

Weekly Blog by Philip King, CEO of the ICM - 'Stand and be recognised'

I wrote last week about the importance of aspiration and referred particularly to the contribution of ICM members in helping to formulate our aspirations as an Institute. One of those aspirations is to achieve recognition of credit management as a profession in its own right. We want to be able to hold our heads up as equals alongside accountants, lawyers, architects and other professions. In some organisations we do but there is some way to go in others.

 

Two events this week have reminded me of this and of its importance. The ICM was strongly represented at a ‘Dods’ conference on Monday: Tackling Debt Owed to Government. We presented to two breakout sessions, had a stand in the exhibition area, and I was pleased to be able to present to an audience of over 200, mostly public sector employees and management, in the afternoon. My message was simple and clear: if Government wants debt to be taken seriously within the public sector and wants collection to be effective, then Debt Management must be seen as a profession and not simply 'doing a job in the Civil Service'. To achieve that culture shift, the value of the contribution of the role must be recognised, the impact of it being done well must be recognised, and professionalism in the Debt Management teams must be promoted and recognised.

 

Yesterday, I hosted an ICM Regional Roadshow in Exeter that was combined with a Quality in Credit Management Best Practice event. What did I see and hear about there? Professionalism in practice; examples of organisations that are best in breed and demonstrating the very professionalism I'd been talking about on Monday, and an audience of credit professionals who were eager to develop their knowledge and skills so that their contribution could increase and become even greater.

 

If you look up 'professionalism' in a thesaurus, you'll see words like competence, knowledge, and expertise but you don't need to find alternative words. Professionalism means exactly what it says and it's what we're all about.

Weekly Blog by Philip King, CEO of the ICM - 'Setting the future agenda'

I attended the ICM's 15th Regional Roadshow yesterday. Held at The Royal Armouries in Leeds, the attendance was excellent and so was the content. Gerry Barron focused on the concept that this is the time for credit managers, whereas James Perry, a solicitor from DWF, talked about what credit professionals can do to improve the chances of recovery in legal action to recover debts. I also shared my thinking about the credit management profession and the professionalism of those working within it.

The event prompted three thoughts to stand out in my mind: firstly, Gerry's statement that credit managers should be setting their own agenda in the current economic times; secondly, that we should be proud of our professionalism and the real value we add; and thirdly, that we should be smarter in the way we communicate to the audience beyond the credit professional.

Gerry worked through an example showing how the profit on a simple debt of £50 was eroded by late payment or, worse, non-payment and set out in absolute terms the impact to the business. The Benchmarker module for ICM Online Services available at: http://www.icmos.org.uk/ has a profit erosion calculator that demonstrates the same realism. It's a good way of making you think, and would be usefully shared with colleagues across our organisations as an indicator in real terms of the value we add. There is, after all, a positive impact to contrast with every negative impact - the opposite of profit erosion is profit generation - and that's where our professionalism can make a real difference!

The first and third thoughts are linked: if we're going to set the agenda, we also need to communicate in the right way and using the right language. All too often, we talk about DSO which means everything to a credit audience and almost nothing to anyone else. I believe strongly that DSO is a good and useful measure, especially on a trend basis, but it's rarely appropriate for a wider audience who would understand alternatives such as the amount of available cash collected for the additional amount of cash released into the business. Guess what, if we use graphs for the last two, an upward line is good news that matches the graphs used by our colleagues in almost every other area of the business. Credit people are, by their very nature, good communicators and a simple, subtle change to language and presentation could generate an exponential rise in the way we're perceived in our own organisations. It's time for us to set our own agendas!

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 - 'Recent days have held mixed emotions - first driven by our government and, secondly, by my family'

Francis Maude announced a few days ago that the Government would name and shame prime contractors who fail to pay suppliers within a 30-day limit. The Prompt Payment Code was established by BIS to encourage best payment practice and by definition expose those whose behaviours might be open to question, and here is a classic opportunity to promote its existence by insisting that suppliers sign up to it. It certainly needs more publicity and this would have built on the work we're doing with BIS; instead an initiative is launched that demonstrates a seemingly lamentable absence of joined-up thinking across government departments.

A day or two later, I attended a stakeholder meeting with the Insolvency Service looking at proposed changes to the rules surrounding pre-pack administrations. Having held a number of forums, the policy team had decided to meet with stakeholders again in smaller groups to inform a 'period of reflection' before deciding on the best way forward for the detailed implementation. I was greatly encouraged by what is a rational and sensible approach that will - I hope - lead to a better outcome than would have resulted from rushing ahead regardless.

On the personal front, I recently attended a family funeral that was both poignant and sad reminding me of the uncertainty of life and the future, and bringing things into perspective. On Saturday, my daughter is getting married and this will surely be a day of pride, happiness and, yes, some tears too I suspect!

After the weekend, I'm off for a few days post-wedding recovery in the North West so I've asked Rob Beddington, the ICM's Director of Commercial Relationships, to share some thoughts with you next week, and I'll be blogging again on 18 August which, coincidentally, is the day of the next ICM Regional Roadshow at Cutlers' Hall in Sheffield. If you're in the area, I hope I'll see you there.

www.icm.org.uk

Weekly Blog by Philip King, CEO of the ICM - 'Change the insolvency landscape'

I've spent a good deal of time over the last few days reading and reviewing the Insolvency Service's 'Consultation on Reforming the Regulatory Framework for Insolvency Practitioners' which has been produced following the OFT Market Study into Corporate Insolvency published last June.

It's large document (c90 pages), so not an easy read but nevertheless vitally important for credit professionals. Indeed the press release that accompanied the launch highlights a principal objective of the consultation in considering ' the three main issues to address the problems associated with the weak position of unsecured creditors.'

When I'm out and about, our Members and those in the credit community frequently complain to me about the insolvency process and how they lose out. This then is our opportunity to influence the insolvency landscape of the future. If we ignore it, we do so at our peril, and to this end the ICM will shortly be issuing a survey that will enable anyone interested to give their opinion and comment on aspects of the paper that are relevant to them. Please take the time and trouble to allow us to take your thoughts and feedback into account when we produce our final response to Government.

Elsewhere I see that David Kern, Chief Economist at the British Chambers of Commerce has reacted to the recently published minutes of the Monetary Policy Committee http://bit.ly/h77WrS. He's absolutely right when he says '...the factors pushing up prices in the short-term are outside the MPC's control...' Raising interest rates now would be too soon and would damage the prospects for recovery.

Finally, I'm writing these words ahead of the ICM's Regional Roadshow at the National Motorcycle Museum in Birmingham which has the highest number of registrations yet for our Roadshow programme. To find out more about our Roadshows and when we're going to be near you visit: http://www.icm.org.uk/default.asp?edit_id=1286-56