You need to keep your eye on the ball

The Men’s final at Wimbledon demonstrated how both opponents require intense concentration, in order to anticipate their opponent’s moves as well as the trajectory and speed of the ball. Within the confines of the tennis court, each player must “keep their eye on the ball” constantly monitoring all the variables in the game situation if they are to counter their opponent’s moves and to successfully dominate and win their match.

Although professional tennis is a commercial business, commercial businesses are not tennis, but for the manager charged with producing profitable income for a business, it is essential that they also “keep their eye on the ball”. However, unlike the tennis player, the commercial manager has more than one ball to keep their eye on. But what does this phrase really mean when applied to producing income?

To maximise the level of profitable income, while minimizing the costs and the use of assets, is the objective of every commercial manger. Producing income requires the involvement of many activities which collectively enable a business to anticipate and satisfy customer requirements profitably. Thus unlike the tennis player who has only one ball to watch, the commercial manager has the equivalent of many balls, having responsibility for many of the activities that are collectively involved in producing income.

How many balls does the Commercial manager face? There are a number of “balls” which may be equated to those distinct activities involved in producing profitable income.

First, there are all those activities involved with defining the product or service provided, such as:

• Research and development,
• design,
• modification and product differentiation.

Then there are all those activities to do with pricing the product or service, involving;

• costs,
• discounts,
• credit and market price.

Satisfying customer requirements involves:

• selling,
• distribution,
• packaging,
• customer and market communication,
• promotions and special offers.

Understanding the market served requires activities to seek and acquire information on:

• market trends,
• economic outlook
• competitor activity.

Commercial managers must therefore “keep an eye” on all these subjects in order to anticipate trends in customer demand, prepare responses to change, and react quickly to resolve problems. Unlike the tennis player, who is responsible only for themselves, the commercial manager is responsible for a “team” of people who collectively work to produce the necessary income, as well as a variety of investment and assets. Thus the commercial manager must first and foremost manage the people involved but also to a greater or lesser extent exhibit necessary “leadership” to coordinate the various activities to produce the desired result of profitable income which is sustainable for the future.

Within the business organisation, the commercial manager needs to exhibit not only capable managerial qualities, but also some elements of leadership. For while leadership of the business is vested in the Chief Executive Officer (CEO), who sets the objectives and direction of the organisation, the Commercial Manager is responsible for achieving the income objectives set by the CEO and with motivating the staff and managing the resources necessary for that achievement.

It is often forgotten, that those who are directly involved in those activities that impinge on satisfying customer requirements, are frequently best placed to identify where problems arise, and where solutions may be found. Therefore the commercial manager who actively involves operational staff in identifying problems and suggesting solutions will be more effective as a motivating leader and effective manager. Encouraging staff to question processes which they think to be unhelpful or inefficient, does not undermine authority, but helps to ensure that those with practical experience maximise their contribution to the well being of the business. While businesses make profits for the benefit of share holders and owners, the business cannot exist without the skills of the workforce. Thus ensuring that all the staff involved in every aspect related to producing income is fully motivated, tasked, directed, equipped, trained and remunerated is essential if the commercial manager is to achieve the objectives and income targets.

Effective communication with customers in particular and the market in general is essential in being able to anticipate customer and market demand. Keeping aware of economic trends, and the effect they may have on customer’s demand help to maintain a clearer understanding of the market environment in which the commercial manager operates.

Commercial managers will ultimately be measured on their results, – how much income they produce and how efficiently in terms of costs and investment. Performance measurements are a prime tool of management control, and when interpreted correctly, may provide an indication of performance relative to the planned requirement. Over time, such measurements can highlight trends in performance as well as identifying areas where underperformance may indicate problems. But performance measurements are only indicators of past and present performance, and do not give guidance regarding how the performance should be maintained and improved in the dynamic of the commercial market where there are many variables over which the commercial manager has little or no control or influence.

Producing a steady stream of profitable income for any business is a complex process. Commercial managers have to keep their eyes on many subjects at the same time, without letting their concentration be distracted and allowing important “balls” slip past unnoticed, which may adversely affect their results.

© N.C.Watkis, Contract Marketing Service 26 Jul 13

July 29, 2013   Posted in: Uncategorized