A few years ago, I was asked by a large international corporate to present my Performance Beyond Compliance program at their offices in Johannesburg, South Africa. But before commencing, the CEO wanted me to spend a few weeks walking around the building, getting to know the people and gain a general idea of the business. I wish more clients would make this request!
I was having coffee with the debtor’s manager, and she was briefing me on the performance of each of her staff. One person was, according to her, a problem. Apparently, she (yes it was a woman) was doing just enough to avoid being put into the disciplinary process. Her debtors book should not exceed 30 day’s but it was sitting on 34 days. So I asked if I could speak with her.
I approached this lady and asked if I could have a word with her. She smiled and nodded, indicating a chair at her desk. I sat down and introduced myself, telling her what I’m doing with the company. I opened the conversation with “So tell me what you do.” “Oh, I’m a debtor’s clerk” she answered. “I know that, but I really would like to know what you do.” I countered. She looked puzzled for a moment and then smiled. Looking me in the eyes she said, “I collect money from people and companies that are in arrears with their monthly payments to us.” I commented sincerely on the level of responsibility that her work carried then asked, “how do you do this?”
Very proudly she turned her computer screen around and showed me all the different colour- coded ribbons indicating the status of the accounts that she was working with. To say the least I was impressed with the technology that enabled this lady to do her job and told her so. She smiled proudly. “Why do you do this job?” I asked. She looked at me quizzically for a moment and then said, “because it’s my job. Its what I’m paid to do!” “Really?” I said, “Is that why you do this job?” She nodded but had an unsure expression on her face. “Has it ever occurred to you” I said,” that it’s your responsibility to ensure that at the end of each month this company has the cash in the bank to meet its cash needs. Payroll, rent, water and lights etc?” Her eyes were wide as she said, “you’re kidding me!” “No I’m not” I responded. “That’s the reason that this company has a debtors department.” Anyway, after a few small pleasantries I left her.
A few months later I was walking down the stairs between floors and met up with the debtor’s manager. After some small talk, I asked her how that debtor’s clerk that I spoke to was doing. “It’s good and bad news” she said. I asked her to elaborate. “Well,” she started, “after you left her, she did something that she has never done in the five years that she has been working for me. She went to the financial manager and asked how much money the company needs in the bank account at the end of the month. He gave her a figure and she returned to her desk and worked out how much of that figure is represented by her portion of the debtors book.” “And” I encouraged. “She then divided her client base into low, mid and high hanging fruit and set goals that said if she hasn’t achieved 50% of her collections goal by the 10th of the month, she is not going to make her monthly target.” This was exciting stuff, so I said, “so what’s the result?” She smiled at me and said sadly, “her debtor’s book was aging at 34 days but now its aging at 37 days.” I looked at her and raised my eyebrows. She smiled and said, “but we have more cash in the bank at month end than what we have ever had before!”
All it took was for me to refocus her off what she does and onto WHY she does it!
So this is a classic case of an arbitrary, standard and misaligned KPI holding back stellar performance!
Isn’t it time we talked?
by Mark Deavall
August 2024
If you would like to talk to me, please call me on +2782 465 5481 or email me on markd@markdeavall.com
© All articles are protected by copyright and may not be duplicated or republished in full or in part, without the express written permission of Mark Deavall. You are welcome to share this article with anyone, up to and including this line.