What does being commercial mean to you?

Hello Grace

I think you are right - there will be many ways in which commercial skills (as they relate to chartered accountants) can be defined. In my experience of working with FDs the one's that have been described as commercial share some common characteristics:

1 They think like an entrepreneur: they understand the value drivers of the business and think about ways of growing revenues and market share.

2 They are always aware of the "big picture" and are able to come back to this high level after analysing detailed financial data.

3 They understand how external factors affect their business and realise the impact of competitor and government actions, and they understand the expectations of investors, analysts and rating agencies.

4 They are forward looking and have the ability to tell the story behind the financial data and effectively communicate insightful conclusions about  future risks and opportunties --in a clear, concise manner.

I would be interested to know what other people think.

Jonathan 

I think Jonathan has hit the nail on the head personally. I would add a couple more:

- understand how the business, its culture and its employees work across many different functions (not just finance) such that the impact of change and its associated risks / rewards can be readily assessed

- have the ability to effectively challenge the business to be able to sift out the truly commercial ideas 

- able to make decisions - being "commercial" means many small and large decisions will come your way and you must be able to act and help steer the company in the right direction   

Deborah

I have had this debate in a number of organisations and there is always a range of opinions on what "being commercial" means.  So any definition is unlikely to fit all circumstances.  I also think that the expression "we must be more commercial" is often used in response to a particular problem that an organisation is having.  We might consider what it isn't and what it might be.

I don't think it means being strategic - although this is closely related.  Being commercial might be one of the capability requirements of the strataegy however.  Nor do I beleive it means being entrepreneurial, although I do beleive a good FD needs to understand how entrepreneurs operate in order to maximise the commercial opportunity they can generate and minimise the risks they will sometimes unknowingly take.

I do think it means being externally focussed and maximising income and minimising costs within the context of an organisations overall strategy, appetite for risk, its target markets and its brand values.     This would require us to be able to modell scenarios and key assumptions into decision support tools, understand income and cost drivers, assess how competitors are behaving, know what factors drive and influence suppliers, how market conditions are changing, how contracts can be structured for maximum value etc.  Quite a big ask really.  

 Business heads often use the following expressions in the commercial context - "getting the best deal possible",  "treating the companies' money as if it were your own", "cutting out waste and inefficiency", "behaving more like company X" , being agile and smart" and so on.

I do agree with many of the comments made above by others.

To me, being commercial is understanding the real value or cost to a business, from "End to End" and being able to apply this understanding to influence and change a business to generate future profits.

What I mean by "End to End" is understanding the entire business right the way from marketing and selling it and understanding the real costs of marketing, selling, distribution, manufacture or provision of service and also all the way through to the way in which in generates income and value for you in both the short and the long term.

Being commercial and strategic are very closely linked and to be a good strategist in business you need to have commercial skills.