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The Case For The Defence

Kim Radok24 November 2013

THE CASE FOR THE DEFENCE

In any enterprise, whether it is a sporting club, business or a non-profit enterprise, you need both offensive and defensive strategies to survive and grow the enterprise. Having managers and employees with matching skills is also important.

It is interesting to observe how similar business and sporting enterprises are, and how the same influences abound in each type of organisation. Furthermore, the review of history shows us; the best businesses and sporting clubs survive and grow for the same reasons.

Off the field, the best sporting clubs have a great management / administration team who develop and maintain the culture of the club. In preparation for game day, these clubs will develop players with the required offensive and defensive skill sets and strategies to play the game.

The situation is no different within  the best commercial enterprises. Groups of offensive and defensive play makers (sales and credit employees) are supported by a strong management / administration team. The offensive team are the marketers and sales people which interact with the customers. The defensive people are the credit and accounts receivable managers, due diligence professionals and managers. 

Game day for the business enterprise is the interaction which occurs every time your employees and the customer interact. There will be times when the sales team will insist that a particular customer needs to be supplied. On other occasions, the credit / accounts people will say NO.

As in the case in the sports example, at times, one team should be given the right to be in ascendancy and vice a versa, depending on the situation. Typically such situations occur when deciding to take on a new customer, whether to supply or not to supply, or when evaluating whether to do business at all with a poor performing customer.

On other occasions, both teams should be encouraged to work together to find a viable commercial solution to gain another customer or additional sales. After all, finding commercially advantageous transactions in today's environment is a must on every possible occasion.

Unfortunately, the best commercial outcome does not always occur in business. When this happens, it usually because salespeople are allowed to over-rule the credit / accounts people without due diligence processes being conducted. We then find the credit and accounts receivable employees are forced to try and recover the outstanding debts where the customer has all the advantages. Consequently it is often an uphill battle to collect these debts in an efficient manner, if they can be collected at all. 

If we refer to our sports theme again, in Test cricket when the top order batsman fail to play correctly and go out for a low run score, the tail-end batsmen are often forced to try and save the game.

At the end of the day, the best commercial and sporting enterprises survive in the long-term when they develop professional offensive and defensive teams and respect the appropriate strategies. Furthermore, business owners and senior management teams have created an environment of mutual respect and co-operation between the two teams.

It behoves business owners and management to understand that not all business relationships are easy or all their customers honest. Each situation in business is different, as it is for the Test batsman having to face the next delivery. Each situation or ball must be played on its merits. Having both offensive and defensive strategies allows our batsman or business person to survive and grow their innings.

May you be paid rathar than tomorrow

Kim Raod

kim@creditmatters.com.au

www.creditmatters.com.au

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