Developing Commercial Acumen in Leadership Development Programs

The Problem - Leaders as babysitters

Are leaders there to help make the organisation a “best employer”, or drive organisation results by understanding how to pull the commercial levers in the business to best effect? Or both? Do leadership development programs really address “developing commercial acumen”? DOMINIC JOHNSON states his case for customised business cases.

 

In our experience, if the leadership development agenda is driven by HR/L&D rather than the business, then it will tend to revolve around the notion that leadership is used to get the organisation’s people ‘engaged’ – pastoral care activities that define the exclusive role of a leader as a kind of babysitter who will be judged by how content the ‘children’ are. Honed people skills are certainly a major aspect of leadership effectiveness but they are not and should not be the whole story.

 

Having contented people is a necessary aspect of fostering discretionary effort – evoking and channelling commitment to the organisation’s direction. But well defined goals and a strategy to engage them are equally essential. And this can only stem from an insightful assessment of how the business is performing, relative to market risks and opportunities, customer needs, shareholder expectations and competitor strategies. Then, sound decisions can be made in terms of where the organisation should best deploy its efforts, energy and resources. Capabilities such as ‘strategic’ or ‘business’ or ‘commercial’ acumen are often missing from the agenda.

 

It’s not only people that need leading – but the organisation too. What direction should we pursue to remain viable, grow, be relevant? We may well regard such questions as the domain of the most senior national and global directors, and that middle and front-line leaders are merely required to be excellent implementers of the thinking that those higher up have already done. Wherever the ‘thinking’ is supposed to happen, it is rare that meaningful development of acumen competencies has been provided in the past, as these high level executives’ careers have progressed. It’s also unlikely that HR/L&D professionals, from their own careers, have any useful insights to offer in this space.

 

Filling the gaps - academic business schools OK in theory

Business schools tend to favour an academic coverage of general business principles, supported by case studies. While this approach has some merit, learners can struggle to translate abstract principles into sound decision making in the real world. There are many strategic buzzwords in common parlance among executives but precious little insightful strategy leading to compelling organisational growth or true differentiation from competitors.

What organisations desperately need is sound commercial and strategic decision making in their specific organisational and business context:

 

  • Do the leaders that we entrust to make key business decisions, and practice sound commercial governance, know how to read the available reports, make good sense of them, and recognise commercial/strategic opportunities or risks?
  • Can they make timely and accurate decisions that lead to improved commercial outcomes?
  • Can they formulate and articulate commercially informed competitive strategies to effectively combat our competitors, engage customers and drive growth?

 

The answer - customised business case study

 

Rather than employ academic 20 year old case studies from other industries to arrive at pre-determined, generic ‘learnings’, we’ll increase commercial acumen within your cohort by putting a real life report, using real data from your own organisation, into the learners’ hands and ask them to make sense of it.

 

We work with your senior leaders and commercial/finance teams to create scenarios that perfectly embody the precise challenges that your leaders face. These customised, relevant  case studies lead to strong application of commercial learning among participants.

 

We ask the CFO, and other senior stakeholders, where the organisation is facing challenges that are either not being detected early enough by leaders (despite warning signs in available reports) or, assuming the organisation’s leaders were more commercially astute, what decisions/actions would you expect them to take that is not the current norm? From such questions, very specific examples of organisational pain or lost opportunities surface and these provide the basis for a much more concrete and targeted case study.

 

You need to know whether existing and emerging leaders can identify current and emerging issues and take relevant and timely action. Once we’ve identified recent examples of problems within the organisation that require an informed strategic/commercial response from leaders, then we create home grown scenarios for the leaders to work through.

 

  • Are the learners able to identify the issues on various rows in the P&L?
  • Do they spot the staffing blow out?
  • Can they understand the sudden drop in profitability from one year to the next?
  • Are they able to conceptualise the various levers available to them to turn the situation around?
  • Are they able to evaluate the merits of various remedies to the situation and select the most effective response?

 

Results – accumulating acumen

 

Such an approach sees measurable steps forward in:

 

  • Accurately reading and interpreting the organisation’s financial data, market analyses and balanced scorecards.
  • A more systematic way of thinking about cause and effect within the organisation.
  • Increased confidence and expertise in decision making.

 

Using real world scenarios also affects the immediacy of strategic or commercial impact – which in itself is highly educational to participants. Suddenly they see precisely what is required of them and they have tools and frameworks that they can put to instant use in their own immediate setting.

 

Getting started

 

We are happy to confidentially share client case studies, with their permission, with non-competitive organisations. Contact us here and see the design in action. We’re also happy to introduce you to clients (and their senior leaders) who have helped develop commercial acumen curriculum.

 

DOMINIC JOHNSON is a Principal Consultant with HFL Leadership, and has previously worked at PriceWaterhouseCoopers, EDS, and Covey Leadership. He is a member of the program development team at HFL, and is responsible for leading HFL’s commercial acumen case study development efforts. To connect with him, please email him here.

 

HFL Leadership www.hflleadership.com

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