What Is… Commercial Awareness?
Spoken to any type of graduate recruitment recently? Commercial awareness is a phrase you’ll have heard. But considering how often these little words pop up, it’s surprising how many people aren’t really sure what it is, or why everyone seems to be talking about it.
To put it simply…
Lots of people think commercial awareness is just reading the FT or the Economist the day before an interview. They’re sort of right, but there’s more to it. Commercial awareness is about a candidate having a wider understanding of the business world and the ability to link this with the industry and firms they are applying for.
An example? Okay.
After consistently failing to make any profit since launching Uber China in 2014, Uber recently sold its Chinese business to Didi Chuxing, its main competitor in China. Someone applying for a job – say, at a law firm in the City – might have been following this story for a while. If so, this person would know that Uber had been trying to break into the market for some time, and even secured the massive Chinese search engine Baidu as its investor.
But just knowing this isn’t enough. This applicant might relate this information to the law firm by saying it shows the consistent inability of western companies to penetrate the Chinese market – with Google, Facebook, and Amazon also failing to make it big in China. This means that international law firms looking to expand internationally may not be able to succeed in the Chinese market. Law firms are businesses too – and full marks to the candidate that remembers it!
Let’s take it even further. Say the law firm has a client looking to merge with a company in China. The applicant could make a comment about the state of the Chinese market and say that perhaps the client might evade this problem with a merger rather than organic growth. Or something like that.
The point is that they’re showing they have an awareness of what’s going on in the business world, and that they can apply this in practice.
Why is everyone talking about this again?
If you’re commercially aware, it means you know what you’re doing. You understand the business of the job you’re applying for, and you understand it in the wider context of the marketplace. This is something recruiters really value. But why?
First off, you need to prove that you have commitment when you apply for a job. Showing commercial awareness is one way of demonstrating this. Saying ‘I am committed’ is not enough. But having commercial awareness shows that you’ve really done your research and are actively interested in both the company and the industry it operates in.
Companies are making an investment in hiring you, and a lot of the time this is a long-term investment. Companies will invest a lot in your training and development, and so it’s better for you to already know what you’re doing so you can hit the ground running. If you are commercially aware, it will become a foundation for you to build on as you begin working at your firm and it means you have the business mindset that will help you succeed
Commercial awareness might also be a talking point in an interview. Of course, you won’t be expected to be an expert on the business and its clients. But the interviewer might ask you directly if there are any recent news stories you’ve found interesting and what effect that might have on the firm. Even if it doesn’t come up, slipping in bits to show you’re commercially aware won’t hurt.
How to raise your own commercial awareness…
Now you have an idea of what commercial awareness is, and why it’s important, the next step is to get commercially aware.
Yes, reading the FT or the Economist is a good way to stay informed. But alternatively, you could use the BBC Business News website, which is much more accessible. Or if you’re not too big on reading the news every day, you can tune in to the radio in the mornings (or listen on catch up later in the day) – a good programme is the Today show on BBC Radio 4. What’s important is that you keep up to date with the latest news, especially business news.
Once you’re up to date with the headlines, it’s about applying it. So, think about the bigger picture. Ask yourself what implications this news has for your industry or company or its clients. In an interview, if you’re given a scenario or news story, you can use the ‘PEST’ (Political, Economic, Social, Technological) or ‘PESTLE’ (PEST + Legal, Environmental) analyses to think carefully about these things. So ask yourself: what is the political situation? What are the economic factors? And so on.
It’s not all just reading the news and thinking either – a lot of commercial awareness can be gained in the real world. Part-time jobs, for instance, can teach you about how businesses are structured and about relationships with clients and competitors. Networking can also help. Speaking to people who work in your industry can be a valuable tool in improving your commercial awareness.
Hopefully, after reading this, commercial awareness is no longer a mystery. So get out there, and show recruiters how commercially aware you are!
Lily Wu is guest contributor with the Inspiring Interns blog. An Oxford Law graduate, she will take up her place at Hogan Lovells in 2018. Connect with Lily via LinkedIn.
Inspiring Interns is a graduate recruitment agency which specialises in sourcing candidates for internships and giving out graduate careers advice. To hire graduates or browse graduate jobs London, visit our website.