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What Does a Commercial Manager Do?

Posted by Tim Cummins | 09-Dec-2015 09:49:00

Imprecision, uncertainty, major differences of opinion – these are the types of situations that a commercial manager relishes because they represent an opportunity to exercise judgment, to develop creative ideas, to deliver innovation and value.

In many respects, commercial management is the antithesis of compliance management. Of course a commercial manager must be aware of standards and policies, but they view these as a framework that must be understood to support evaluation of the impact of potential deviation or change.

There is a big gap today between the executive management view of commercial skills and contribution and the view of many who have a commercial management job title. Far too many commercial managers are actually closet compliance experts – skilled at identifying problems and possible exposures, rather than seeing opportunity and creating viable solutions. Unfortunately, many have come from functional backgrounds that offered no background or training in the real meaning or attributes of commercial management.

I see evidence of this in many situations. For example, IACCM’s Expert-level accreditation requires completion of a complex case study, which involves multiple stakeholders and some significant risks. Most candidates are very good at spotting risks; they then tend to think in terms of ‘the rules’ and their enforcement. This approach is almost certainly doomed to failure – alienating key stakeholders, ensuring confrontation with their trading partner, unlikely to win management support. These case study inputs generally miss the creative opportunities that could transform relationships and generate a positive, non-confrontational outcome.

Similar evidence comes from our frequent round-table discussion groups. The general reaction to situations where there is uncertainty or ambiguity is to be dismissive, to perceive the market requirement as unreasonable and ‘risky’. A conversation yesterday about the UK’s Social Value legislation was a good example. Rather than seeing an opportunity to create differentiated offerings, the core reaction was that this legislation is too vague, too difficult to interpret and unlikely to lead to any benefit.

Good commercial managers need a sense of realism. Certainly they must not be caught up in the over-optimism that often permeates sales teams and the top executives. But that does not mean they should move to the other extreme and operate as cynics or pessimists. Commercial management is about taking a balanced view and finding solutions that support executive optimism.

In a conversation yesterday, I summed up the key attribute of commercial management as ‘informed inspiration’. If the commercial community is to flourish, they must recognize that markets today are surrounded by imprecision, by uncertainty, by ambiguity. They must embrace these conditions as providing remarkable opportunity for innovation and new ideas that address the risks and provide competitive advantage.

Topics: contract /commercial management, commercial management, contracting excellence

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