Commercial awareness comes up time and time again as a weakness that employers perceive graduates to have, so if you’re looking to stand out from the crowd as a graduate candidate, commercial awareness is a key competency you need to be working on.
But what exactly is commercial awareness and how can you develop it?
What is Commercial Awareness?
It’s not an immediately obvious term; a quick internet search will bring up some slightly ambiguous definitions:
The UCAS glossary of competencies defines it as: “Understands the economics of the business. Understands the business benefits and commercial realities from both the organisation’s and the customer’s perspectives”.
Cambridge dictionaries online defines it as: “Knowledge of how businesses make money, what customers want, and what problems there are in particular areas of business.”
By far the best definition we’ve come across in our online travels is from Ernst and Young’s YouTube channel. This is a must-watch for getting an insight into what employers mean when they talk about commercial awareness.
In simple terms we can say that commercial awareness is about understanding what’s going on in the world of business, looking at situations from a commercial perspective and thinking about cause and effect.
Using the example from the Ernst and Young video – if there is a natural disaster on the other side of the world, how does that affect a business? Does it affect the supply chain, outsourcing, clients, staff? Will the effect be long-term or short-term?
How about if a major competitor enters the market – what issues would that throw up for a business? Do they need to think about more competitive pricing, diversifying, increased advertising, loyalty rewards? How will they fund any of those policies – will they take a hit on their margins? What will that mean for the company – their shareholders, their staff?
A topical example – how will a business be affected if the UK leaves the EU? How exposed is the business to the EU? Do they import, export, both? How will this be affected? Could leaving the EU open up new markets? Will red tape be cut? What kind of savings would that represent?
You get the picture; thinking along these lines, coupled with gaining a good general knowledge of current affairs, is the way to building up useful commercial awareness that’s going to really impress an employer.
Where do I start?
There’s no getting around it, building up your commercial awareness requires research. You don’t have to spend a small fortune subscribing to periodicals; everything you need is available at your fingertips – for free – on this crazy new platform called the Internet!
Use the business and financial sections of news websites, read blogs and articles, follow businesses and news sites on Twitter. If you have a specific industry in mind, then you can focus your attention on issues particular to that industry.
Ideally, you want to be in a position where you can have an informed conversation with your interviewer – get an opinion on issues and back that opinion up with facts.
Try not to think of it as a chore – it’s about what’s going on in the world – it’s interesting! The more you learn, the more you read, the more interesting you’ll find it.
Learn the Lingo
Learning the definitions of key business terms will unlock a whole new understanding and make everything you read about a lot easier to process.
Learn the definition of words such as: margins, overheads, direct costs, assets, liability, GDP, consumption, entry barriers, supply shock, etc. The Guardian has a great Glossary of Business Terms.
Watch it in Action
We’re constantly surrounded by commercial awareness in action, so start thinking about commercial realities in your every-day life. If you have a job or a volunteering role, think about how different business decisions and events affect the organisation. You can also consider it in your role as a consumer.
Don’t think you’re exempt from needing commercial awareness if you’re not going for a position in business or finance. Organisations want all their staff to understand how the business works, how actions and decision affect the business – and that includes designers, sales staff, web developers, everyone!
About Author: Rachael works for Graduate Rescue, a social enterprise and employment resource for students and graduates. They provide online interview coaching, career matching and advice software, practice assessments and more.