A year ago, I ran a survey amongst smaller, medium-sized companies’ owners and managing directors.
One of the questions I asked them was what they would like to see more of from the members of your management team.
These are the things they came up with.
In this short series of videos, we’re going to be looking at each one of them in a little more depth.
In this video, I want to focus on commercial awareness. That phrase has cost me thousands of hours and probably thousands of pounds…
… throughout my career, because I always felt that there was just something I wasn’t getting about how business worked.
So what is commercial awareness? It’s the ability to be able to elevate your thinking, to be able to think in terms of the entire company…
… and even beyond into the entire marketplace, when you’re thinking about ideas, creating, making decisions, or taking actions.
You must be able to elevate yourself away from what I call your functional bias. This is your tendency to think in terms of the function you built your career through.
So salespeople tend to think about priorities very differently from operations people who are very different from finance people.
Commercial awareness is your ability to pull away and think above that. So the framework that I teach for commercial awareness has just four levers.
Number one, you need to be aware of the relationship between the company, its products and services, and the markets it seeks to serve…
…because everything you do and every decision you take will have an impact on that.
Secondly, is thinking in terms of the customer journey or experience. So what is it like to be a customer from the first point they become aware of your company to…
…becoming a loyal repeat customer, or they churn and disappear.
The third lever is the economic engine. How the company makes profit by adding value and how cash flows through the business to enable the company to sustain its operations and reinvest
The fourth lever is the structure; the machine, if you like. The people, data, systems and assets that make up the company.
Provided you think about all of those things when you’re making a decision, you would demonstrate a level of commercial awareness.
As I always say, business is simple. People make it complicated.