Credit Manager Magazine 9/2021

63 CREDIT MANAGER MAGAZINE WRZESIEŃ / SEPTEMBER 2021 One needs to understand how credit man- agement fits into the strategic agenda and be capable of participating in the dynamics, recognizing connections with other strategic elements on the agenda. This is about provid- ing an insight to the board of directors, which then makes decisions in a controlled manner and with integrity. An example of how the role of the credit manager is going to change according to our vision. Traditionally, they focused on limiting credit risks. Risk avoid- ance is one-dimensional, it means thinking of risks negatively. Conversely, Risk Manage- ment is always about risk versus reward. You must mention risk and reward in the same breath. Risk avoidance means: I don’t want to take the risk, but I don’t want the rewards either. Risk and Reward thinking means you do want the rewards, but you also understand there are risks. We refer to this as a company’s risk attitude and it is one of the things that ‘new’ credit managers must explain clearly. They must inform the board of directors what a specific position means for the revenue model. It is about providing an insight so the board of directors can then make decisions itself and decide on the direction. CJ: Do the CFO’s actually posses sufficient insight into the balance between risk and reward? VG: I think so. Risk-taking is part of entre- preneurship. In my discussions with organ- izations, I see that everyone has the ability to weigh risks against rewards. But I also see that they often lack the insight to explain this. When I ask managers in a company wheth- er they consider rewards or risks first when making a decision, I never get a clear answer. Everyone has an anchor when it comes to risk and reward thinking and furthermore, it is contextually dependent on capital manage- ment, reputation management, execution, technology, and management philosophy. Some consider rewards to be the guiding principle, while others look at risks first, and a third group deals with it on a case by case basis. We use the Risk Appetite Value Chain model of thinking and working, RAVC for short, to explain this issue. Back to the big picture: the ‘new’ credit man- ager needs to become more involved in shap- ing strategy. Not as a Chief Credit Officer, I think that’s nonsense. According to my vi- sion, the CFO, along with the sales manag- er, is responsible for credit policy. The credit manager must provide his CFO with solicited and unsolicited support in the strategic pro- cess. And that is where the T-profile comes into the picture again. The ‘new’ credit man- ager must possess new competencies, such as leadership and the power of persuasion, to fulfil the role. He must have answers to ques- tions such as ‘how do I round out risk-reward thinking?’ I think there will be credit man- agers who cannot or do not want to take on these changes and that is fine. After all, there are always (limited) tasks for these people from a T-thinking point of view. CJ: Do you think there is a trend to give the role of credit manager a different name and a different position in companies? VG: Companies have indeed been coming up with new job titles lately. But it is right for the credit manager to fall under Finance and to work closely with other departments in the organization. Getting back to the AethiQs maturity model: the full maturity phase is reached when the ‘new’ credit manager con- tributes to ‘Generating the money’. The cred- it manager can be a value creator here. This is where he needs to bring different worlds together with a clear message. The board of directors must be able to see how credit man- agement contributes to the company’s re- sults. Finance is then integrated into all end- to-end processes. The ‘new’ credit manager is the financial disruptor who creates value, connects worlds internally and externally in a cross-sectoral way, and thus provides an insight into ‘Generating the money’. So that kids will say: ‘Mum, I want to be a strategic credit manager when I grow up’. CJ: Thanks for the interesting conversation! FECMA Cees Jansen Cees Jansen has over 25 years ex- perience in Credit Management in a variety of forms ranging from factor- ing to credit insurance to BPO and E-Commerce. He has designed spe- cialized solutions focusing on receiva- bles including captive credit insurance, securitization and stand-by servicing programs and financial demand gener- ation tools. Cees has developed Oper- ating models for the O2C operations of global companies in Retail, Consumer Goods and Logistics which combined protecting good customer relations with the need to operate an effective and efficient delivery team. Prior to his involvement in Credit Management, Cees has worked in Banking and Fi- nance as a Credit Officer. Vijay Gangadin Vijay is an enthusiastic and chari- smatic speaker in the field of risk ma- nagement and organizational scien- ce. Vijay has been program manager for the Basic Risk Management, Re- gister Risk Management (RRM) and Master of Risk Management (MRM) programs at The Hague University of Applied Sciences. Vijay Gangadin (1972) is the founder of the Manage- ment Business School, which offers training in Risk Management, Sales and General Management.