By Rob Downey

Who among us has not heard a small-minded triumphalist say, in extolling their personal merits after some passing victory, “Those who can, DO; those who cannot, TEACH.”?  When I had time for it, I used to say in correction, ”Those who can, TEACH; those who cannot, needed BETTER TEACHERS at some point along the way.”

Now more than ever, those who CAN had better TEACH!  Almost everything we used to know for sure about credit, credit insurance and trade finance is changing; almost everything we used to be able to safely take for granted – from rating agency competence to sovereign stability to reserve requirements – has been challenged or destroyed wholesale.  The teachers within your company should be encouraged and brought to the fore.  This is their season again; comes ‘round their hour anew.

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By Rob Downey

Commercial airline passengers benefit everyday from flight crews who, by law, tradition and training, follow pre-flight checklists. My view is that the use of checklists to maintain high standards in the performance of important recurring team tasks should be studied in business schools.  What has this got to do with trade credit insurance, trade finance and the management of political risks?  ICBA USA uses a wide variety of lists in our global brokerage business to assist, educate, and guide ourselves as well as our global credit-insured clientele.

One of the most recent and striking confirmations of the efficacy of using lists as touchstones to guide high performance comes from the medical profession.  In case you have not heard it, I synopsize below the story of how empowered nurses armed with checklists in the Intensive Care Unit (ICU) at Johns Hopkins Medical Center managed to dramatically improve patient outcomes at what was already one of the world’s finest hospitals.

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By Rob Downey Vercingetorix surrenders to Caesar by Alphonse Marie de Neuville (31 May 1835 – 18 May 1885)

This is the second time in 2009 I have risked the use of a military tale to support my view about the best use of credit insurance (CI). The Discretionary Credit Limit (DCL) is the topic for this post, so it is perhaps appropriate for me to take a few “discretionary” risks in framing my recommendation, but first the historic context:

For six months in 53-52 B.C., Julius Caesar and twelve legions, numbering 60,000 Roman regulars, pursued Vercingetorix, principal leader of the Gauls, and his 80,000 warriors through what today is Northern France.  By summer, the Romans were able to trap and besiege the Gauls on a plateau near modern-day Alise-Sainte-Reine, fifteen miles NW of Dijon.  To secure his elusive foe, Caesar had his legionnaires circumvallate the entire Alesian plateau with an 11-mile wall comprised of a twelve-foot-high earthen palisade, behind a double row of deep ditches. The encircling work took a month.  The trapped Gallic leader sent riders out for reinforcement. Caesar let the couriers “escape”, and allied tribes marched to the relief of Alesia, 250,000 strong.

While waiting, Caesar had his army dig a second “outer” wall, or contravallation, 13 miles long.  When it was finished, Caesar was intentionally and irremediably “trapped” in a dug-earth doughnut, expecting to be assaulted all around by the largest army ever to attack Roman troops. Incredibly, history records that the legions won the four-day battle which ensued. Casualties were thirty to one in Rome’s favor; Vercingetorix was captured; 100,000 other captives were dispersed.

The practical application for better credit risk management: Outnumbered five-to-one on his opponent’s home field, Caesar trusted in the professionalism and competence of his team and put his Legions in a position calculated to give them maximum opportunity to assert their advantages, i.e., superior ability at close-in fighting, in ranks enhanced by elevated and protected defensive positions.  He moved toward his problems, dug into the risk he faced, and thereby avoided being either destroyed piecemeal over months of guerrilla warfare, or surrounded and overrun on the plains of Gaul.

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By Rob Downey

"What's in a name? That which we call a rose, by any other name would smell as sweet; so Romeo would, were he not Romeo call'd, retain that dear perfection which he owes without that title." W. Shakespeare, Romeo & Juliet, (II,ii,1-2)

Maybe Juliet Capulet was right, but linguists tell us Shakespeare wrote his plays having at his disposal only half as many words as we have today. "Glocal" is a new word which can describe a seemingly familiar, but significantly different, view of international business. 

Global + local = glocal. What's in the word? Are you a global company or part of a "glocal" team?  Soon it may matter for you to know which. The meaning of "glocal" will likely merge with and then expand the meaning of "global". We will see if the new word endures, but it is useful to both myself and the International Credit Brokers Alliance today.

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By Rob Downey

My partners normally ban the use of military or sports metaphors in explaining trade credit insurance.  They know that troubled trade transactions, defective coverage, and disputed obligations are more complicated than the black-and-white examples typically presented by wars and athletic contests.  Still, I believe the  world of global trade could use a Major-General Robert Craufurd about now.

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