What is Commercial Excellence?

I talk about Commercial Excellence with people almost every day. We share experiences, and discuss practical ways to make progress within businesses of different sizes, operating in different segments.

I get asked a lot, “what is Commercial Excellence?” usually I ask, “What do you want it to be?” This response depends very much upon the mood of the meeting, but it always invokes a lively dialogue!

“The answer to all my prayers!!” or words to that effect is a common response.

Throughout my career I have led the development and implementation of many international process and organizational developments, that we now call Commercial Excellence. These include:

-From Pricing Management to Margin Management

-From Sales Process to Pipeline Management to (CRM)

-From Forecasting to Sales & Operational Planning (S&OP)

At the time I started these activities, the words Commercial Excellence were never used or needed.

We had a clear functional goal and sometimes enlisted the help of other supporting departments. I use the word supporting in the traditional sense.

When I was running Business Development activities, I described Finance, Supply Chain & Marketing as supporting.

With hindsight I see that this was a big mistake. Not because they weren’t supporting but because they should have been equal partners in business development. Describing and treating them as supporting was a very sub-optimal position to take. With this attitude I didn’t get anywhere near the best out of the talented people in those teams.

Behaviour and people are behind every success and improvement. This is no different with Commercial Excellence.

Towards the end of 2012 we started to join the dots. By this I mean that our business planning utilised the margin and the CRM sales pipeline data as well as the historical volume sales. Within 1 year it delivered a rolling 18 months forecast to gross margin of 95% accuracy with a tolerance of +/-2%.

This was impressive, but on reflection, the most important thing was the way people and departments started to behave towards one another.

They supported each other, and collaborated in the truest sense. They started to anticipate the needs of one another.

So, to answer the question, “What is Commercial Excellence?”

First of all I say, “to be excellent it must be integrated.”

And then,

“Integrated Commercial Excellence is nothing more than departments supporting one another and collaborating, driven by a clear business vision in a way that improves the ability of the organization to sell effectively, make profits and deliver what it says it will.”

It sounds obvious…it can be…what’s the secret?

Understand where you are strong, and start there.

The starting point is a vision and recognition of the advantages of integration and the values and behaviours required to achieve it. This is the foundation for true Commercial Excellence.

Just imagine that your sales team is selling the correct value proposition, at optimum margins, planning and reporting in a CRM system, which feeds the short and medium term Demand Planning process!!

Sales, Finance, Supply Chain & Marketing in harmony and driving the business forward.

Fantastic!