Blog

Errors and infringements

Published on September 28, 2017

The new rugby season is underway, and once again there are rule changes to get used to. Personally I’m delighted that the rules change a lot every season nowadays. Most business people subscribe to the mantra “change or die” and rugby union is a well-run business now. But it’s still a lot smaller than football due, I think, to the fact that

  • It’s harder to organise informally;
  • It’s more complex; and
  • It’s quite a lot more violent.

Without the physicality it would lose its essence but the tackle law has been changed and it is continuing to address the other two issues.

  • 7-a-side made its first appearance at the Olympics in 2016 and this more informal version of the game increased its popularity.
  • The latest rule changes go some way to reducing its complexity. The scrum laws are now drawn and interpreted so that the ball actually emerges from the scrum for use by the backs as opposed to frequently resulting in penalties. There are still some re-sets and the scrum penalty hasn’t disappeared completely but the ball more frequently emerges from the scrum, even if the forwards quite often take it back into a ruck before letting “the girls” play with it. The overall impression now, it seems to me, is of a game where skill and errors rather than infringements decide the outcome. In other words we can more simply enjoy the thrills and spills rather than consult the rule book, the referee’s mike, the commentators or our mates, to understand what happened.

The more accessible a product or service is, the greater the demand. And that is why I encourage our FDs to explain the finances of a business in terms that are understood by people without our training. Not everyone knows how to calculate debtor days nor what working capital is. So when we start to work with a business, one of the first things we do is re-organise the balance sheet so as to clearly identify working capital, and separate out the cash (which is usually mixed in with it). Not only is cash fundamental it also behaves in the opposite way to working capital – more working capital = less cash and vice-versa.

Once we have removed the technical issues from the financial report we lay the way open to a discussion with, or by, the business managers to manage the finances by, say, chasing up late customer payments, which is one of the actions that produces lower debtor days. In other words we have reduced the number of technicalities that the business may have infringed (increased working capital) so that it can concentrate on its errors (slow customer payments) and how to deal with them.

So there you have it – if the IRFU keeps up its good work, a rugby match will become as exciting as the finance item at the board meeting.