Page 97 - Performance Leadership

86 • Part II Operational and Analytical Dimensions

transaction. Alternatively, there may be revenue for which no one
receives commission. Too much overlay revenue will lead to a margin
problem.
Lastly of course, there is cash inflow. If customers pay late, certain
crucial financial obligations become difficult to maintain, such as pay-
ing suppliers and employee salaries. Why is this happening? It could
be symptomatic of issues with credit control, customer satisfaction, lack
of implementation resources, or customer solvency.
These insights can help the country manager to make partner man-
agement more successful, by focusing on sales where royalties are
included. Or conversely, the country manager will see that he or she
is potentially jeopardizing an important partner relationship by staying
away from those sales. The country manager also sees statutory revenue
and taxable revenue. This insight is valuable for the country manager
in his or her relationship with the financial director or CFO, who needs
to deal with the tax office, the regulators, and shareholders. Insight into
patterns of these types of revenue is important, so that operational man-
agers can see the impact of their decisions on external stakeholders,
and how these ultimately impact on the market capitalization of the
company. Feedback of this kind adds another type of alignment over
and above horizontal and vertical. It helps align external stakeholder
perception of the company with the company’s own internal percep-
tion of its performance.
By organizing the different definitions of the term revenue in a flow,
we can see the existing definitions that make sense and lead to align-
ment. And those that add to confusion. The former definitions should
be kept and the latter eliminated. This revenue report, with its differ-
ent definitions of revenue, has created the long-awaited single version
of the truth...or rather, “one context of the truth.” There are no
synonyms possible anymore, as all terms appear in the same report, and
the combination of these represents a single flow of revenue. Perhaps
even more important, this style of reporting has a positive influence on
the behavior of the account manager. Instead of revenue, the account
manager is enticed to think in terms of contribution; which revenue
will actually contribute to the company in the right period and how to
avoid having delinquent customers.