We talked before in “How to Escape the Enchantments of Corporate One-Derland” about the lack of ‘joined-up’ thinking that we see in British business. That’s the all-too-common scenario where one unit’s manager adopts a ‘silo’ approach, where their numbers are all that matter – and any plan for wider organisational improvements doesn’t hold any interest.

The good news is it doesn’t have to be this way. A useful way to think about it is to start looking beyond the silo via a mechanism I call ‘the ripple effect’.

Take a client of ours, catalogue giant Freemans Grattan Holdings. It used our software to change behavior very successfully in one area. And it could have been totally justified in being happy simply doing that – it was a very tangible piece of payback. But through the ripple effect, it achieved a lot more.

Specifically, the company used our technology to improve delinquency danger; it communicated effectively and sensitively with clients the database showed might slip into the red.

In and of itself, that move recouped no less than £1m annually by taking 17% of red cases off the book.

The team didn’t rest on its laurels. It then tracked and saw that bad debt provisioning fell. And it also found that clients who edged back out of the danger zone actually went on to spend more.

The point is that by looking at three metrics here, not just one – bad debt, delinquent provision, and client hehaviour – a much more holistic, useful metric was generated.

This is the ripple effect: understanding what a change in one area means for another area, and how it can help the business as a whole.

A bit more ripple could help you plan – as well as cope with what seems like an endless recession.

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