1. "It doesn’t matter if an asset is cash or an asset bought with cash, what defines an asset is value. Basically, if it has value, it’s an asset.” [150 highlighters]
   
2. "Accounting, like my silverware drawer, is simply a way to organize information to tell a meaningful story and make better informed business decisions.” [145 highlighters]
   
3. “Equity represents the owner’s share of the assets once all of the liabilities have been met. The amount of equity is calculated as the leftover amount, or residual.” [124 highlighters]
   
4. “You must always have two effects on the storyboard: both effects may be increases, both may be decreases, or one an increase and one a decrease." [105 highlighters]
   
5. “Assets are valuable, we can measure what they cost us, and they will bring benefits to our business as we use them in the future. Assets can be used directly or indirectly by the business to earn money." [98 highlighters]
   

What was your favourite snippet?

- Mark Robilliard, Color Accounting International

"SAM is an important competitive advantage.  A competitive advantage that creates barriers to entry against competitors and barriers to exit for strategic accounts."

Peter Browne.

You may or may not like SAM. And to be clear, SAM’s definitely not for everyone. But SAM just might be what you’re looking for.

This morning while having breakfast, I was contemplating the Color Accounting workshop I ran yesterday for an important client of our strategic business partner Bennelong Group International.

Bennelong specialize in Strategic Account Management (SAM) and have been implementing SAM with the Sales Team (and other divisions) of this client. Even though it’s only very early days, the client team has already had significant success and increased financial performance which has been documented in a recently published book by Bennelong gurus, Peter Browne and Gary Peacock, Managing B2B customers you can’t afford to lose – how to create joint value with your strategic accounts. (Full disclosure: we are mentioned favourably in the book).

Is SAM for us? That’s for you to decide. If your results (revenue, margins and your perceived value) are trending ‘south’ year-on-year and your relationships with your key accounts tend to be transactional, price-driven and antagonistic, then that is unlikely to be a sustainable business model.

The single biggest problem in business is, staying with your previously successful business model … one year too long.
 - Lew Platt (CEO Hewlett Packard)

So let’s meet this SAM. In Peter and Gary’s own words, it is... the process of selecting a portfolio of strategic customers and developing those customers, over the long-term, to drive financial performance and shape strategy. SAM helps build strategic relationships, understand customers deeply and align your capabilities with customer needs to create long-term joint value.

SAM is not for the faint-hearted and certainly not a quick-fix for companies being beaten up on price by their major accounts. It requires a seismic shift in thinking, for the sales team AND for everyone from the CEO down. It requires a rethink of current strategy and practices and the ongoing direct involvement of the executive. Internal silos will need to be broken down and resources from many disciplines brought to bear to engage at this level. But the results can be astonishing with higher revenue and margins.

As part of the SAM implementation, we run a financial fluency workshop for the SAM team, which will include the CEO, the CFO, the Sales Director and team and the other divisions that are part of the value-adding process (for example, finance and after sales support). The success of the SAM process is measured in financial terms for both the company and their key account. Consequently, the SAM team needs to be financially literate and so they can communicate in a language that is compelling to the senior decision makers and influencers - financial language. Being one of the most common areas of weakness in Account Managers and the broader SAM teams, this is where we come in with our unique Color Accounting tools and educational technology, to help you improve your financial performance.

If you are seriously thinking about differentiating yourself from your competitors, in the eyes of your key accounts, I implore you to research SAM (see links below). It might be just what you’ve been looking for.

Apart from the Bennelong book already mentioned, there is also a truly excellent Harvard Business Review article called Three rules for Making a Company Truly Great by Michael. E Raynor and Mumtaz Ahmed. In this article, the authors provide statistically validated ‘rules’ for exceptional corporate results over the long term. In their words, “With few exceptions, the best companies behave as though these principles guide them through all their important decisions, from acquisitions to diversification to resource allocation to pricing… When Income is declining, for example, it can be tempting to make the company’s results look better by slashing assets and investment to reduce costs. But great companies typically accept higher costs as the price of excellence, putting significant resources, over long periods of time, into creating non-price value and generating higher revenue.”

Their first rule: Better before cheaper (it’s best to compete on differentiators other than price).

Raynor and Ahmed used the single ratio of Return On Assets (ROA) for their financial performance measure – a metric that, in their words, ‘reflects strong, stable performance’. It also goes to one of the fundamental truisms of business: the business acquires assets for the purpose of generating profits, so the best measure of success is how efficient and effective that business is in using its assets for this purpose over time.

In an upcoming blog, I will focus on ROA as a performance measure.

 - Mark Robilliard, Color Accounting International

ps. the workshop went great.

References and recommendations:

Strategic Account Management with Bennelong Group International:
http://bit.ly/1zx4ZJs

Book: Managing B2B customers you can’t afford to lose:
http://bit.ly/1AEQSDf

Harvard Business Review (Apr 2013) Three rules for Making a Company Truly Great:
http://bit.ly/1nUODaN

Link: This article shows how combining capabilities and opportunities create growth. SAM is a great vehicle to do this:
http://dupress.com/articles/growth-expanding-universe-choice/

I recently had the pleasure of a meeting over good coffee (Campos) with Stephen Harrison, the CEO of the Global Accounting Alliance in Sydney. The GAA has almost 800,000 members in over 180 countries. It is made up of 11 of the world's leading accounting institutes, brought together to promote quality services, share information and collaborate on important international issues.

We had a very enjoyable discussion about the challenges before the profession, and especially in attracting and serving accounting students. We talked about some of the successes we have been having with this in the US and more notably in South Africa where the government is augmenting their accounting curricula with Color Accounting.

During our discussion, Stephen reminded me of a workshop in Sydney some years earlier in which he came along at my invitation as an observer. Time pressures meant that he could only come to the beginning and the end of the workshop. In truth, he was probably just coming along as a favour to me. Anyway, he kindly offered to recount his experiences that day for others to share.

"Some years ago I attended a presentation of Color Accounting. It was to staff of an insurance company.

They were young and old and from many parts of the company. The one common characteristic was that they knew little about accounting, and certainly could not read or understand financial statements.

The presentation lasted a day. By the end of the day most if not all present were able to read and understand the company’s financial statements. They were able to ask insightful questions.

It was a most impressive demonstration of the power of Color Accounting to make accounting understandable and dramatically improve financial literacy in a very short period of time. It was also fun for all involved!

I enjoy recounting this experience whenever relevant as I hope many, many others can benefit from this most instructive tool."

- Mark Robilliard, Color Accounting International