Day-to-day, you might not be thinking too much about the commercial side of the business you’re working for – how much money it’s making, whether it’s profitable, and whether your choices have an impact.
But when you become a leader, your commercial awareness will prove invaluable, particularly when it comes to making huge decisions for the good of the company.
So, how can becoming more confident and authoritative on commercial matters enhance your reputation and clout as a leader? Let’s take a look.
What is commercial awareness?
Commercial awareness is understanding how your company turns a profit, and how it intends to stay profitable. It includes having an awareness of any major competitors and being able to stay ahead of the game.
Developing commercial awareness also means being knowledgeable about the company’s key values and what’s important to the business. You’ll need to have an understanding of the regulations your company conforms to and what rules and procedures are in place too.
To have strong commercial awareness, you need to be up to date with the latest industry news and trends. Building this skill can help you land promotions and get ahead in your career as you can demonstrate that you’re looking at the bigger picture and considering the context of the company you’re working for.
It can also help you make great decisions for your team, as you’ll be aware of the business landscape when it comes to your industry.
Why is it important for leaders to possess commercial awareness?
A leader should constantly be demonstrating commercial awareness because it gives them a clear understanding of what the business is aiming for, and can help to inform their strategy.
It doesn’t matter what industry you’re working in, commercial awareness will always be relevant, especially if you’re looking for a senior position in a company. With an eye on the commercial side of the business, you’ll be thinking about what makes your business stand out within your sector.
If you’re not up to date with the latest industry news, it can mean your company will fall behind and stagnate, while others are being proactive and pushing ahead.
A leader needs to possess the skills to analyse the commercial market but also understand how they can put it into practice. For example, a marketing agency who aren’t in touch with the latest social media channels will automatically fall behind those who immediately jump on top of new trends and get great results for their clients.
How can leaders develop their commercial awareness?
Here are a few things you can do to make sure you have a clear understanding of the business world and demonstrate commercial awareness in your role:
- Look into your company’s annual reports and other types of literature around the business. Getting a deep understanding of how it makes money and what its plans are for growth can help you to understand its place within the market
- Think about your role and the part you play in helping the company succeed. What will you do on a personal level, and how can your team support the business’ commercial goals?
- Broaden your news sources to get viewpoints from lots of different voices. Read industry magazines, listen to relevant podcasts, and watch videos from experts to understand a broad range of viewpoints. You should also try to attend in-person events to network, and share information with others within your sector
- Speaking of sharing, a knowledge-sharing event with different companies in the industry could prove beneficial when it comes to the commercial side of the business. For instance, it could be that a peer of yours has done significant research into an emerging technology that you haven’t considered yet. Knowledge-sharing gives you both the opportunity to learn from each other
- Conducting a PEST analysis can help you look at things from lots of different points of view, including the Political (P), Economic (E), Social (S), and Technological (T). Understanding where you fall from each of these positions gives you the ability to determine which areas need attention, and what you’ll need to make your priority. You could also perform a SWOT analysis to help you understand where you can improve.
- Set time aside to catch up on business news each week. The Financial Times and The Economist can both give you an insight into how your sector is performing, and what it can do to evolve
What impact can it have on your team and business goals?
Being commercially aware gives you the chance to stay one step ahead of the competition. When you’re thinking beyond your team, and looking at the whole picture, you can see the direction you’ll need to be heading in.
As a leader, your team will be looking up to you and if you’re commercially aware, it can help them realise how important it is for their careers too. Linking their day-to-day work with the wider business goals also helps them understand that they’re contributing to something bigger, and can see what an impact their work has.
When your company is continually growing, it can give you authority within the sector as an innovative organisation that strives for commercial success. And, of course, it cannot be denied that being commercially savvy also means you’re future-proofing your business by making sure it’s turning a profit.
Finally, having a strong commercial awareness can help you plan effectively by giving you the opportunity to predict future trends. Reflecting on how things have gone in the past, you’ll be able to spot potential problems on the horizon, or opportunities to be taken advantage of.
It’s a skill that will prove useful throughout your entire career, whether you’re going through the recruitment process, applying for a promotion, or leading your team to success.
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