A commercially aware workforce has become the need of the hour. There has been an increasing emphasis on commercial acumen in the business world. Recruiters, managers and learning and development professionals can’t stop talking about it and seeking it out in employees.
So, what is commercial thinking and how does one develop commercial acumen? Read on to explore the need to make commercially sound decisions in today’s world.
What Is Commercial Acumen?
Commercial acumen has many names, popular among which are business savvy and commercial awareness. The exact meaning of commercial acumen may differ in different situations because it varies from business to business. However, at its core it refers to know-how about the way a business operates and the underlying factors that determine the success of organizational performance.
Having commercial acumen means having a proper understanding of the business world, market and industry. It even includes the knowledge about what an organization needs in order to succeed and keep pace with its competitors. Here are some common examples of commercial acumen in professional settings:
Understanding how markets work
Having insights into current trends and technology influencing markets
Identifying how an enterprise can streamline processes to boost performance
In short, strong commercial acumen helps professionals to look beyond their immediate role or department and focus on the big picture. It helps them rethink strategies that align with changing needs and values.
Why Does Commercial Acumen Matter?
People who possess strong commercial acumen can add value to any business. It helps them research and assesses how much it takes to achieve organizational growth and profitability. Having substantial knowledge about both the business and industry means staying updated with any latest market developments, including competitors. This knowledge is further useful in the grand scheme of things as it allows people to gauge potential threats and prepare for crises if any. A bird’s eye view is critical for business survival.
People often use the terms commercial acumen and business acumen interchangeably. While there are a few overlaps between the two, the main focus of commercial acumen is to do better. Business acumen has a broader scope and focuses on creating additional products and services that consumers may need or want. Commercial acumen skills help analyze the current competitor landscape and customer needs while also looking at requirements for the next 1-3 years. Business acumen is more long-term and looks at 3-5 years into the future. However, both forms of acumen are critical for business survival.
How To Develop Commercial Acumen
Various examples of commercial acumen may suggest that it’s a skill that people are born with. In reality, commercial acumen skills can be developed over time. Here’s how anyone can learn how to develop strong commercial acumen:
Understanding The Organization
The foundation of commercial acumen lies in a deep understanding of an organization. From annual reports to financial results, staying up-to-date is essential. One can even analyze the mission, vision and objectives. A PEST (Political, Economic, Socio-Cultural and Technological) analysis can help identify factors that affect long-term strategy.
Understanding Customers And Competitors
In addition to staying informed about the latest industry developments, professionals should understand where the priorities of customers and competitors lie. For competitors, a SWOT (Strengths, Weaknesses, Opportunities and Threats) analysis can help identify how they’re performing. For customers, one needs to look at the target market and its segments. It provides insights into what changes should be made.
Evaluating And Prioritizing Projects
To enhance commercial acumen, one must learn to evaluate and prioritize projects. A sense-check of projects helps in making necessary adjustments to business strategy. A cost-benefit analysis is helpful in understanding whether a project is likely to benefit an organization or not. If they seem promising, then investing in them is a good idea. For example, the decision to hire new people for the successful implementation of a project can be taken after a cost-benefit analysis.
How Can Organizations Make A Difference?
Typically, people in upper management roles shoulder the responsibility of staying abreast of changing business needs and demands. Decision-makers often need to keep an eye out for profit margins, core costs and revenue management. You can boost the commercial acumen of your business leaders through focused training programs that help them understand the marketplace, the business model and KPIs. Remember that commercial acumen is a business skill that can be improved with training.
However, simply having a training program in place isn’t enough, it should deliver tangible results. Harappa’s High Performing Leaders Program is a good starting point as it can help you achieve transformative outcomes for senior executives. The program has a toolkit of frameworks, principles and approaches that’ll help leaders navigate current demanding and challenging mandates. They’ll learn to focus on the big picture, successfully influence clients and champion new ideas by driving innovation. See it for yourself, try Harappa today!
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