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Commercial Management – the non-existent role

January 25, 2017

For a role that apparently does not exist, commercial management appears remarkably healthy and resilient. Not only are the numbers of commercial managers growing, but so is the pay rate relative to some of the comparable roles within business.

It is certainly not new news that the business world is changing fast and with such rapid change comes complexity. Often that complexity is a direct result of inconsistent or outdated policies, practices and operational models. For example, new regulations or entry to new markets inevitably places stress on existing processes, skills or capabilities. Similarly, fast-changing business models challenge organizational designs and structures – for example, the switch from integrated enterprises to highly outsourced supply networks or the shift from selling products to the supply of solutions or services.

It is in this context that commercial management becomes of such critical importance. At their best, commercial managers are the people who reconcile business needs with capabilities. They do this by ensuring that trading relationships are compatible with the business and with each other. It is, after all, quite pointless to win business on which you cannot perform, or to contract with a supplier for something that doesn’t meet requirements. But the role goes beyond deals and transactions; it also involves testing capability (internal and external) to identify the need for change in policies, practices or procedures. Senior and experienced commercial managers are change agents; they not only challenge the business to operate with integrity and within acceptable risk boundaries, they also promote continuous improvement through their appreciation of markets and the sources of revenue and margin.

Given this background, it is interesting that some professional associations try to deny the existence of commercial management as a role. They prefer to proclaim on the one hand its irrelevance and on the other that ‘we do this already’ – even when it is patently obvious they do not. The reason for this is presumably because they see commercial management as a threat to their influence. That is sad, because it has the effect of limiting the horizons and opportunities for their members.

In my view, the purpose of a professional association is to advance the interests of its members by ensuring their relevance to the world of today and the future, not to remain mired in the past, a constraint on change. As we advance into the era of automation, robots and machine learning, successful professionals will be those who focus on enabling others and streamlining their organization’s operations. They will be at the forefront in creating innovative approaches to knowledge dissemination and automating control, focusing their own efforts on the management of change and the simplification of complexity. They will be people who understand stakeholders, who operate as integrators and synthesizers, who can reconcile perspectives and develop creative solutions. It is these forces that are driving the growth of commercial management – because it is very much a 21st century career.

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