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Innovation and the role of commercial management

May 26, 2015

In a fast-changing world, new ideas abound. Many will go nowhere. Others will be a raging success. What sets them apart?

Some ideas are simply not good. But even good ideas may not succeed and often this is because of poor commercialization – a failure to ask (and answer) the right questions or a determination to push ahead even in the face of massive obstacles.

It is commonly understood that innovation requires strong commercial back-up. Indeed, some innovations are in essence purely commercial – for example, Uber and airbnb which simply transform a supply chain through the use of technology and a new delivery system. This implies that contract and commercial managers should be playing a major role in evaluating and enabling new ideas – yet in most organizations they do not. Indeed, frequently those in commercial roles complain that they are involved too late, when their ability to shape or influence is almost non-existent.

In my role at IACCM, I am often the recipient of new ideas and as an organization, we promote innovation in contract and commercial management. I observe the reaction of our members, who tend to fall into two very distinct camps. A minority are clearly enthused by new ideas. They engage actively in discussing them and providing support, including suggestions for possible improvement or additional markets or applications. Others are more evidently thoughtful and immediately consider the idea in the context of their professional knowledge. They immediately move to practical questions such as funding, payment streams or potential liabilities and risks.

The first group – the minority – do not ignore these practical questions, but they operate in a different sequence. They see their role as assisting in the ‘ideation’, in ensuring full understanding and exploring its applicability and purpose. Only then do they move into the more fundamental questions of overall ‘commerciality’.

As I watch the faces of the innovators, it is quite clear which conversation they value – and ultimately, which advice they are more likely to accept. Those who share their excitement are immediately part of the core team; those who identify ‘challenges’ and problems are left on the edges.

These differences are important. Given the speed of change and the importance of innovation, the interesting jobs of the future will be those driving competitive differentiation and introducing – commercializing – new concepts and ideas. If you are in a commercial role, it is good to reflect on how you behave, whether you are perceived as risk-averse, obsessed by compliance and process, or whether you add value through a readiness to contribute, using your knowledge and experience to assist innovation, rather than frustrate it.


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