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May 1, 2011 BCMA - It’s All About You! Welcome to the latest issue of BCMA News! This month’s topics… 1. Nine Things to Consider Before You Negotiate 3. Employee Evaluations: Don’t Put Off a Good Thing 4. Want to Move Up the Corporate Ladder? 1. 1. Nine Things to Consider Before You Negotiate 1. Leverage Both sides must want something or else there is no point to be negotiated. Usually one side needs the bargain more than the other. The difference in this wants/needs equation is leverage. You may not have leverage, but you don't need to be at a disadvantage. The key is in your preparation. 2. Their Style You must anticipate how the other side will bargain. Is this someone who is a combative "hardball" negotiator or a compromiser? You can't change them, but you need to size up the person you are dealing with going in. 3. Their Goals Assessing what the other side wants requires pre-negotiation preparation and research into the situation of the other side. You will only be able to estimate what they hope to achieve, but this information gathering is critical to setting your own targets. 4. Your Goals Effective negotiators have a knack for developing a reasonable range of expectations but are not reticent about bargaining for a result at the higher end of the range. 5. Your Style Know your limits. Do you negotiate as a problem solver or are you a competitor? You may need to get beyond your own style in order to get the best result. 6. Strategy Actors often say, every play involves three performances: the one you rehearse, the one you do, and the one you wish you did. The same adage applies to negotiation. No two negotiations are alike, and there is no one way to get to a good result. More than anything, effective strategy is a function of planning. 7. Information Exchange This is usually a part of the initial stage of a negotiation where the tone of the negotiation is set. What can you say, and what are they telling you? Is the information flowing freely, or is the other side holding back? You should be probing for insight about their issues and goals. 8. Effective Concessions What are the issues? What do you concede and when? One rule of thumb is to make big concessions on the little issues and stick to small, incremental movement on the big ones. 9. Commitment to the Bargain There is no point in getting the other side to say yes to everything you want if they can't perform or don't have a commitment to perform on the bargain. Unless you end up with a deal that everyone can live with, the deal is sure to fail and all you accomplished was to negotiate yourself into a lawsuit. 1. 2. Dr. Credit – Current Ratio Dear Doctor: I was told that a solid customer needs to have a current ratio of more than one to be solid. Is that always so? Dr. Credits says that, generally, the higher the current ratio, the more easily your customer can pay its bills. If the assets in the current ratio are "turning" faster than the liabilities, then it should be able to pay on time. For example, many companies in the restaurant industry routinely have current ratios that are less than one. This can work for them if their inventory turns very quickly, for example, every 10 days. So, a current ratio of .5, usually considered rather low, might still be enough for them to pay you on time. (But, watch them closely!) Conversely, a company which has obsolete inventory, or poor accounts receivable, might have a current ratio over two, but nonetheless be unable to pay on time. 3. Employee Evaluations: Don’t Put Off a Good Thing With the pressures that credit managers face every day to lower DSO and control risk, it’s easy to put off some tasks to the very last minute. One of those tasks is filing out those performance evaluation forms that have been sitting in your in-box for the past two weeks. Why the hesitation? Credit managers may see the performance evaluation process as a mechanical exercise that must eventually be gotten out of the way rather than as an activity that adds value to the credit operation. Performance evaluations deserve to be moved toward the top of your priority list. Why? They are of vital importance to all three classes of employees–the top performers, the laggards, and those in the middle. The evaluations are important to your most valued employees. Even those highly capable and motivated employees like to be told how well they’re doing. Moreover, those positive evaluations will be crucial for salary increases and promotions. Not everyone’s a star. Keeping those steady performers steady and, perhaps, nudging them forward can be accomplished during the performance review. Here is also the chance to tell your poorly performing laggards what they’re doing wrong and to map out a strategy for improvement. This is also the time to document that poor performance. If you don’t do it now, you may have trouble when it comes to firing them. Here are three tips on making the evaluation process work smoothly. · Give concrete examples. · If possible, state information in positive terms. · Support the overall plan for the employee’s development. If she wants to go to a seminar, then send her. 1. 4. Want to Move Up the Corporate Ladder?Want to move up the corporate ladder? Then, says John Broderick, get in touch with the trends that will be shaping credit in the future. One trend is the separation of credit from collections. The emphasis is now on your ability to evaluate credit risk in market terms. Should your company be in a particular market? What demographic trends are driving that market? Your ability to supply reliable answers to those kinds of questions will impel those in power to see your department as a value-added center that’s essential to those running the sales and marketing programs. In short, the key to your future success lies in becoming an indispensable resource to senior management. Branch out. Learn treasury management–cash management, banking relationships, and cash flow forecasting. Those who get the top jobs are readers and thinkers who come up with unique ways to get the job done. To learn more about subscribing to Credit Today, check out our web site at http://www.credittoday.com/ Credit Today Benchmarking Survey- 2011 Improvement Initiatives -- Many Different Things Going On Credit Today 2011 Outlook Survey Reveals a Changing Risk Scenario Benchmarking Survey on Meetings Looks at the Worst Meeting Experiences - Learn What to Avoid! Benchmarking Extended Terms- Survey Participants Weigh In on the Process With Some Great Advice |
