Businesses are a complex combination of people, processes and products. Fail at one, risk failing at them all. There’s so much to contend with and leaders are under real pressure to perform. But is their existing knowledge enough to get the results you need?
What is commercial leadership?
A truly well-rounded leader eloquently develops and combines two core competencies: business acumen and commercial awareness. Understandably, business acumen is one of the most critical skills for leaders; it's the ability to see and understand how a business works, and to make decisions that will help it grow and be successful. But to truly elevate the capabilities of your leaders, you must also help them develop commercial awareness too.
Leaders who have commercial awareness, in tandem with a high business acumen, are able to look ahead, be more insightful and will be determined to support change in a VUCA world. They’re highly perceptive, able to rapidly identify opportunities and threats in the market, transform digital practices and even translate customer insights into profitable growth. This is what truly distinguishes effective commercial leadership from generic leadership.
If transformation is high on your business agenda, establishing a renewed focus on developing the commercial skills of your leaders is essential.
The benefits of commercially aware leaders
The days of regimented leading are long behind us - if we really want to move the needle in our business then we need the entire workforce behind us. And our leadership is key to that. In fact, according to a recent McKinsey report, when senior leaders role model the behaviour changes they’re asking employees to make, transformations are 5.3 times more likely to be successful. Businesses that have strong leadership at the helm can boast benefits such as:
- An increase in employee motivation engagement and retention
- Improvements in productivity, communication and output
- Enhanced cross-departmental collaboration and decision making
- Teams that are resilient and proactively respond to adversity
But with only 42% of leaders believing their organisation’s leadership is high quality we need to focus on developing the capabilities of the lifeblood of our business. In order to truly transform our organisations, we need to focus on widening and deepening the skills our leadership teams harness.
Critical capability gaps in leadership
The skills our leadership team requires these days have evolved significantly beyond people management, soft skills and process creation. Whilst these skills still remain essential, we now also must ensure our leaders are adept at navigating change, comfortable making decisions in ambiguous situations and well-versed in utilising customer insights for improved business performance.
On top of this, to deliver continuous improvement and success, organisations should seek to improve skills and evolve mindsets in several commercially focused areas.
1. Market awareness, strategy and brand positioning
Whilst you may think marketing should be left to the marketing team, commercially astute leadership should have a clear understanding of how the business is perceived externally, what key competitors are doing and undertaking a clear strategic focus on the overall business strategy.
Essentially our leaders should have a bird’s eye view of the business, its positioning and be laser-focused on making rapid decisions to deliver sustainable growth.
2. Customer centricity
No business can afford to neglect the needs of their customers. When we’re busy, it’s very easy to focus on the business as usual. Whilst we need our businesses to run efficiently, we wouldn’t be anywhere without our customers. Establishing and building mutually-beneficial relationships with our customers is critical for ongoing success; encourage your leaders to put the customer at the heart of everything they do and every decision they make.
3. Digital transformation
The rate of change and transformation in our world has accelerated rapidly, and it’s showing no signs of slowing. To sustain success in spite of this change, businesses must adapt, evolve and shift swiftly - meaning our leadership teams must be aware of change and how it will impact the organisation.
From evolving digital processes, unpicking legacy technology or even introducing new roles to the organisation, your leaders must be able to accurately predict change and instinctively pivot.
How to develop commercial awareness in leaders
Most of these key commercial skills require a shift in mindset from our people in order to truly become part of their arsenal. If we want to develop highly complex skills such as these, we must look beyond static learning experiences such as elearning or classroom training. These approaches, whilst effective in other contexts, will not ensure new skill acquisition and application for our leaders.
Instead, focus on using experiential learning to help inspire, support and engage your leaders, whilst also providing them with a safe space to experiment, fail and problem-solve. Experiential learning uses immersive business simulations to create a more active learning experience, focusing on application as much as knowledge acquisition.
Helping your leaders become mindful of business commercials is only one step in developing a robust commercial acumen. After all, leadership is also about influence, empathy and connection. If we really want to influence change in our organisations, not only do we need to ensure our leadership team are able to navigate complexity, be customer-centric and adapt quickly, we also need them to be emotionally intelligent too. These are skills that just cannot be acquired by digital learning alone.
Find out more about how experiential learning can help develop more commercially aware leaders and positively impact your bottom line by downloading our free Experiential Learning User’s Guide.