We see what we want to see, but is it reality?

A recent visit to the optician prompted the thought that we often see what we want to see or expect to see, but can be blind to the reality. In business it is equally true that management will see what it wants to see but be blind and in denial of the true situation.We See What we want to see, but is it reality?

When businesses fail, it sometimes comes as a surprise, yet analysis may show that the writing had been on the wall for some time and that the warning signs of problems were there, but were either not appreciated, were misinterpreted, or simply ignored.

The commercial world is highly volatile especially in consumer markets, and change in fashion, technology and other trends, tends to be rapid and increasingly frequent.
For the commercial manager, responsible for getting and maintaining profitable income, the frequency of change and development is a continual problem. The solutions to yesterday’s problems may still be valid today, but is today’s situation the same as yesterdays? How do you know? If today’s situation is not much different from yesterday’s, then yesterday’s solution may suffice, or need only minimal adaptation, but if today’s situation is very different, then a new solution will need to be found.

Recognising that a new problem requires a new solution, may create the additional problem that the new solution may require a change in organisation or in the way operations are conducted. The idea of change is one that generally creates most resistance, either from the management or the workforce or both. However, as the world and the commercial environment are constantly changing, businesses have to change and adapt if they are to survive. Difficult trading conditions require leadership and motivation, so that radical changes should be avoided unless absolutely necessary, as they are disruptive and demoralising. But if management is to be effective, then performance should be continually monitored and change effected by flexible evolutionary development, adjusting actions to the changing business environment. This approach to change is successfully demonstrated by the number of family owned businesses, mainly in Britain and Europe that have remained in continuous operation for over 300 years. In every case these businesses continue to exist because they have continued to adapt to changing market and trading conditions.

For the commercial manager, responsible for managing the diverse activities that anticipate and satisfy customer requirements, to produce the profitable income, the ability to see and assess things as they are, rather than how they are imagined to be, is paramount. That insight should always be both dispassionate and questioning.
Measuring the performance of all business activities is essential, because as Peter Druker said” If you can’t measure it you can’t manage it”. But performance measurement is only an indicator that shows how effectively resources are being used and the return that is made. Management decisions must be based on the interpretation of facts and measurements, avoiding preconceptions and personal prejudices.

Education for business can do a lot to increase understanding of the commercial environment, as well as the detail and process of business operations. But while academic qualifications are important as indicators of study and learning, they are not qualifications of competency.

What sort of knowledge base should the Commercial manager possess or seek to acquire?

To understand the commercial environment, a commercial manager needs to:

* Use market research to understand the market.
* Study independent reports to qualify own research
* Study the performance of key customers to ascertain their current and future requirements
* Study competitors to understand their business philosophy, products and operations
* Be aware of new technologies and developments in order to assess how they might affect future business development.
* Be clear about what information can be verified and what is based on assumption
* Ensure that all assumptions regarding the business environment, the markets served, and the customer are identified and defined.

Additionally, a commercial manager should have the following competencies
* A good understanding of statistics
* A good understanding of the markets served
* A good understanding of the problems and requirements of customers
* The ability to read and understand a balance sheet and accounts in general
* A good working knowledge of all the elements of the marketing mix
* The ability to select and use performance measurements to enable management decisions to be based on quantitative data, rather than qualitative opinion.

Commercial managers should encourage employees to ask questions and engage in valid criticism, as they are often in closer contact with customers and the market than senior management and may well have better insight into the realities of customer relations and the market.

By so doing commercial managers will have the advantage of being able to assess divergent view points of the problems and better able to assess solutions, based on clear-sightedness of business realities rather than business illusions.

© N.C.Watkis, Contract Marketing Service 28 Feb 13
Contract Marketing Service, (Business Development Specialists)

March 6, 2013  Tags: , , , , , , , , , ,   Posted in: business development, business efficiency, Business Marketing, business performance improvement, business performance indicators, business performance management, business performance measurement, marketing management, Uncategorized

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