Commercial awareness as a skill

Commercial Awareness is worth clarifying. It relates to the ability to increase revenue or reduce costs. You could also think of it in terms of understanding the cost/benefit of undertaking an initiative or plan. Is it worth your while? Is it worth the risk? Does the organisation stand to benefit from it more than the cost? For example, if you’re a team leader and you want to improve the productivity of your team. If you were solely looking at the numbers, you might decide that the company doesn’t need any additional expenses and therefore, there’s no need to spend money. However, if you were using slow computers, you might investigate the idea of buying them new computers to allow your team to work fasters and more effectively. But before going out and spending money, you decide to do review existing data, talk to internal stakeholders and conduct some tests. After speaking to your team you realise that actually, computers are a big problem, not just for productivity but also for security. When you analyse the data, it becomes clear that faster machines could improve the amount of work completed and allow each member of the team extra time to dedicate to a process improvement initiative. Unfortunately, the finance team don’t think it should be done, the company doesn’t need any more expenses. That is until you pitch the business case to the accountant, the answer becomes clear. The purchase of new computers delivers the time and cost savings over a 5-year period, along with improvements to the service.