Be Careful What You Wish For: From the Middle
Sarah was delighted when she was promoted to Controller for the regional Sales unit of a leading chemical producer where she had been employed for the last 3 years. It was a big boost in responsibility and enabled her to participate in the incentive compensation program. Now that she was facing her first end-of-quarter crunch, however, she wondered what she had gotten herself into. A major customer has placed a large order just one week before the end of quarter, but they don’t want delivery till the middle of the next quarter. The Sales Director of Sarah’s group wants to recognize the revenue now, thereby ensuring the maximum bonus for his group for the quarter. This means processing the order, shipping the product to a warehouse and bearing the carrying costs until shipment to the customer. Sarah feels pressure on all sides.
When she sat in the Accounting organization, she saw the costs of such revenue recognition problems – the cost of sending messages to all levels of the organization that it’s OK to game the system; the loss of information and distortions in expectations that jeopardized effective decision-making; the cost of records clean-up when the distortion eventually came to light; and so on. She still reports to her old team and she knows they are counting on her to make the right decisions on this kind of thing. On the other hand, she wants the Sales Director and her new unit’s General Manager to consider her one of the team. She wants to earn their trust and respect.
What should she say, to whom, when and how?
Discussion Questions
-What are the main arguments Sarah is trying to counter? That is, what are the reasons and rationalizations Sarah needs to address?
– What’s at stake for the key parties, including those with whom you disagree?
-What levers/arguments can Sarah use to influence those with whom she disagrees?
-What is your most powerful and persuasive response to the reasons and rationalizations you need to address?
