Take any complex project which runs into difficulties and ask around “why?” and you’ll get lots of people pointing the finger at the contract and the Commercial function. Look at a customer-supplier relationship that has turned sour and commercial will be in the firing line for being too adversarial and protective. Look at internal bid/no-bid, estimating, risk reviews, bid approval and contract review processes and ask why they take too long and are too laborious and non-value adding and again Commercial, the “Business Prevention Police” will get the blame.
Why is this? In most complex organisations, the Commercial Function perform the essential role of ensuring that the company takes on and can execute profitable contracts, whilst being aware of the risks involved and ensuring that they are managed appropriately. They are actually the main implementers of an effective system of governance in any well run business. So why do they get such a bad press? Because often they are seen as a bolt-on, off to one side, blockers, barriers, the people who say “no” (and sometimes they perpetuate the view by behaving as such!).
The main cause of this is a lack of engagement and the integration of the commercial experts early enough in the life cycle. Typically commercial might get involved quite late in the business winning cycle, to review a draft contract, and are then kept at arms-length until things start to go wrong and we end up with claims and disputes. Early involvement of commercial thinking can ensure that the right opportunities are pursued in the first place and that projects are entered into with eyes open. Positive contributions are more likely if there is more engagement between commercial and the other functions so that commercial can still operate as the conscience of the company, but adding value in a positive way rather than being blockers.
Sigma supports this closer integration of commercial within business through its consultancy, facilitation and training activities – working with companies to develop the appropriate approach to governance, developing commercial competencies and raising cross-functional awareness of commercial issues through “commercial for non-commercial” training.