Step.

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Five and a half years it took to have an instant idea. To explain this facilitation method takes a big back-story, I guess indicative of the struggle to truly facilitate technical risk content, rather than just train or lecture it. Accordingly I appreciate your patience whilst I set the scene.

 

The evolution started with a type of report our business bankers have to interpret. Listing 40 separate financial ratios, it calls upon a banker to take some of those ratios, in this case a debtor days and creditors days figure, and make sense of it. The problem with this particular ratio is that it is meaningless without two other things.

 

One thing is knowing the negotiated terms between the business owner and their trade clients and suppliers, which provide benchmarks to refer to. The other is having an aged debtor ledger, which is a financial report produced from basic accounting software. Vertically it lists the individual clients that owe the business money; horizontally there are columns showing the age of the debts (0-30 days, 30-60, 60-90 and 90+). An example* is also shown below. There is an equivalent report for money owed to suppliers. Basically, these reports bring a ratio to life.

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My problem in the 5 different types of workshops I have run that involved the debtor and creditor ratios was that the case studies didn’t contain the aged ledgers.   For years, I knew we needed something to embed the learnings, so I took to drawing a sample ledger on a flipchart or whiteboard to refer to. I told myself that it was good, something extra, but I knew in reality it was flat. Boring. Forgettable. I needed something more. I needed to take the people there.

 

Then last week it happened, the idea, in the moment, in the workshop. I asked everyone to stand up and gather along the wall at the back of the room. I made a joke about it looking like a police line-up – “What a motley lot you are!” – and then I told them who they now were. They were now all debtors, and I was now the business owner that they had been analysing. I told them that for every week that they had been owing me money, they would take one step forward. I then started rattling off the numbers. “Greg, you are 14 days.” Greg walked 2 steps forward. “Sally, I trust you more than Greg, you are at 28 days.” Sally walked 4 steps forward. This continued until all the participants were in a staggered line.

 

OK now what, I thought… “Alright, I now have to pay wages for the fortnight, but I have no money in the bank account. Who of you am I going to ask to pay me early?”. Everyone looked at each other. “Brad!” someone said, pointing. “He is on 7 day terms, and he’s not one of your most important customers”. Brad looked sheepish as eyes were cast his way. Smiling, I probed away. “Brad, will you pay me the invoice early?”. Brad thought about it for a few seconds, and retorted “Sure, if you give me a 10% discount.”

 

On we went. After a couple of confidence-building minutes I changed tack. “You are all now my suppliers.” I re-set the line and gave people their new payment terms, and they all took varying paces forward. “I now have to pay my taxes. Who should I put off paying so I can do that?”. By now everyone was well into it and enjoying it. The movement was purposeful, the entire group anchoring spatially. We covered key themes like whether the motivation of the business owner in the role play was to access cash or maximise profit. We modelled the average ratio as a distance in paces from the back wall; we then compared the effect on that by a few late paying debtors walking forward. All in 10 minutes and all on our feet.

 

The feedback I got after was effusive. The learners were all from the same team, a newly formed centralised group of analysts, most learning everything from scratch. They told me the activity gave them something they could discuss back in the office; a transportable way of conceptualising a key element of their roles. Because it was physical, they could re-enact it for future team-based coaching.

 

As it happens, this is the first evolution of facilitation technique I am re-posting to the new Facilitation Skills community of practice yammer group where I work.  I look forward to seeing how this integration of external blogs and internal CoP evolves.

 

* Attribution:  http://www.shell-livewire.org/home/business-library/accounts-and-finance/financial-control/operating-statement/

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