#6 Commercial Awareness
What is exactly Commercial Awareness?
The Cambridge Business English Dictionary defines commercial awareness as, "the knowledge of how businesses make money, what customers want, and what problems there are in a particular area of business."
In other words, it is the understanding of how industries operate and knowing how an organisation works and the impact (in terms of challenges and opportunities) it faces from external factors. Candidates who understand the organisation and industry will be better able to make an effective contribution to the workplace and ultimately help the organisation do well.
Many companies see commercial awareness as a key requirement in potential recruits. People who take the time to understand how the organization operates and makes a profit – as well as how the industry as a whole works – are the sort of people who then demonstrate a high level of motivation, interest, and focus on the bottom line. This awareness helps new hires "hit the ground running" and make informed decisions, right from the start.
Commercial awareness can also improve your performance in your current role. When you understand the industry that you work in, and know how your role helps your organization compete, you make better decisions, manage risks more effectively, get good prices from suppliers, strengthen your reputation as an expert, and increase your chances of promotion. Also, you're more capable of meeting your clients' needs. No matter what role or industry you work in, commercial awareness is useful. Even professionals in nonprofits and the government will benefit from building it – in fact, commercial awareness can be a key personal advantage if you want to get ahead in these sectors.
How to Develop Commercial Awareness:
You can't develop deep understanding overnight; and it should form part of your ongoing professional development . Your goal is to learn more about your organization, your market, and your industry.
Understand the Organization:
The foundation of commercial awareness lies in developing a deep understanding of your organization, including how it works, how it makes money, and what it cares about most. Many tools and resources are available to help you uncover this information. First, download the organization's annual report, and read it carefully. What do your organization's leaders say is important about the business, and how it works? And what metrics do they use to illustrate this? Then look at the financial results, is the business profitable, and where does it make and spend its money? This highlights key areas of attention. Next, analyze the organization's mission and vision statements , core values, key result areas, and expressed goals. How does the organization make these come to life?. Perform a PEST Analysis to learn about the political, economic, socio-cultural, and technological factors that affect the organization and its long-term strategy. Then look at the USP or ore competencies that the organization claims. What can you do to contribute to these? Last, look carefully at your role. How do (or should) you add value to your organization? And what do you do that contributes to its goals, and makes life better for your customers?
Understand Customers and Competitors:
To understand your organization, you also need to know about your organization's customers and competitors.First, make a list of your competitors. What are their strengths and weaknesses? How are they performing, compared with your organization?Perform a USP Analysis and a SWOT Analysis. How does your organization stand with respect to its competitors? What are its biggest strengths and weaknesses? Are competitors taking advantage of any of these weaknesses? And have you identified a strength that your organization isn't taking advantage of?Now look at your organization's target market. Who are these people? What do they care about? How does your organization segment the market, or create entirely new market? And what does this information tell you about the way you should work?
Keep up to date with the news and current affairs:
Read business news stories online, watch news programmes and listen to business podcasts to stay up to date. You can also follow relevant people, industry publications and professional associations on social media. How might the topics raised impact the organisation you are applying to?
Work experience:
seeing an organisation at work will show the practical realities of running and organising a business. A part-time retail or restaurant job will give exposure to the importance of branding, special offers and customer loyalty schemes for example. Volunteering to put on a charity fundraising event can give insight into business concerns such as planning, budgets, marketing, dealing with suppliers and organising a team.