When I was the Head of Commercial Finance for a large FMCG company there was one question I used to hear from my team more than any other:
“How do I become more commercial”
To which I would often respond “what does more commercial mean”
And often get silence
Personally I still don’t know what it means, its fluffy.
I do know that most finance people ask it because they get told it by people in the commercial part of the business. Usually sales or marketing. “You need to be more commercial” or “you need to develop your commercial skills”
And so the finance person comes back to their boss, me, and asks “how do I become more commercial”.
Unfortunately, there is no magic elixir or fairy dust you can sprinkle to make yourself more commercial.
The only path to becoming more commercial is to expose yourself to the commercial arms of the business….and spend time there.
Understanding the numbers is one thing. But unless you truly understand the drivers, activities and things people are doing that sit behind those numbers you will never be commercial.
And this takes time.
It takes time to dig a layer down. Then a further layer down. And maybe another layer down.
Until you land on the activities people are doing that lead to the numbers you see on the screen.
For example, knowing that sales are down due to a certain product is not commercial. You have to dig down into the activities and things your sales team do to create or secure those sales to be commercial.
In my time in the FMCG world I used to just ask for the promotional calender. From that I could almost predict if sales were going to be good or bad. Sales in FMCG is more often than not driven by the promotions you do. As the uplift in a promotion with a retailer delivers such high volume increases “sweating your promotional calender” becomes a key commercial activity of a sales manager.
Often knowing how many promotions we did and what did they deliver is a way more commercial thing to understand.
Then dig a little bit more to understand the activities people do to secure those promotions. Is it meetings with customers, is it deals offered, additional marketing support for off locations, etc.
And then dig some more into that.
This is the way you become more commercial
You understand the outcome metric which is often P&L, Balance Sheet or Cashflow related
And you dig into the activities that people are doing in your organisation that lead to those outcomes.
And then you dig some more.
The ultimate aim being to find that ripple type activity that creates the wave known as the outcome.
For me in my business new connections is a key metric for me and how many people have downloaded my book. I know if that’s increasing then it opens the door for me to have a conversation with someone. That’s my commercial metric.
The dollars and cents look after themselves if I get that right.
That’s what being commercial is. Knowing deeply the things that happen in an organisation that lead to the outcomes you see on the screen
Sprinkle in some knowledge of the industry, competitors, customers and suppliers (you know all that stuff the text books say is commercial) and you have the ingredients to be more commercial.