How Do You Assess Commercial Acumen?
There are many ways to assess people, but this article looks specifically at how business simulations can be used to observe and assess behaviour for recruitment or development.
What are we trying to assess?
If commercial acumen were principally about knowledge, assessment might involve testing someone's understanding of financial terms, or strategic models. But as we explored in [How Do You Develop Commercial Acumen?], commercial acumen is ultimately about using what we know to make better commercial decisions.
We therefore need to see how people make decisions.
To illustrate the article, we’ve taken a set of representative competencies from previous work and aim to show you how a simulation was used to assess the behaviour of participants. The competencies are:
Integrity & Trust: Acts honestly and consistently, shares information openly, treats others fairly and takes responsibility for their own actions and mistakes.
Decision Quality: Makes sound, commercially grounded decisions using relevant information, analysis, other people's input and judgement; can explain the reasoning and move the decision forward.
Problem Solving: Gets beneath the obvious problem, asks intelligent questions, makes connections and uses logic and evidence to find commercially sensible solutions.
Dealing with Ambiguity: Remains effective when things are unclear or changing; can think and act under pressure without needing complete information or certainty.
Customer Focus: Understands what customers actually need, considers their perspective and builds effective relationships while still being prepared to challenge them constructively.
Interpersonal Savvy: Works effectively with different people, listens and adapts, handles disagreement constructively and influences or negotiates without unnecessarily damaging relationships.
Planning: Turns objectives into workable plans, involves the right people, anticipates problems and risks, and monitors progress and results.
The first step is typically to map an organisation’s competency framework against the simulation. Some behaviours, such as decision quality, problem solving and dealing with ambiguity are easily observable. Others may need a specific activity. In our example, the main gaps were behaviours involving developing and managing people, cross-organisational relationships and implementation over time.
Having agreed the scope, we then agree a process. In this example, participants worked in teams of five, with each team running a simulated business. Participants behaviour would be observed against the +ve and -ve indicators of each competency. Each team would have two observers (an observer would be allocated two or three people to watch) with observers being rotated at the half-way point. The aim here was to get two perspectives on each participant’s behaviour and remove any potential bias.
We then design the detail of the programme. While a business simulation formed the core, we included individual exercises, scenarios, role-plays, presentations and rotated the chair role. The simulation is pressured, immersive and participants ‘suspend their disbelief’. Non-simulation activities are therefore kept within the simulation scenario to maintains this and give observers the best chance of seeing a participant’s ‘natural’ behaviour.
The assessment then runs over a 1-3 day continuous event.
At the end of the event, the observers meet and each candidate is reviewed. There will be observations against competencies from two observers, plus an assessment of their performance in individual activities. In this example, the results then fed into the development plans for each participant.
What does this tell us about assessing commercial acumen?
A simulation doesn't provide a perfect window into someone's commercial capability, and it won't cover every competency in full. But it can create an environment where ‘natural’ behaviours can be observed. Where participants have to analyse information, deal with ambiguity, work with others and make decisions, all in a pressured, commercial setting.
The best business simulations can therefore reveal much more than the obvious capabilities of decision making, strategic thinking and analysis. Commercial judgement doesn't happen in isolation, and the same experience can also reveal the behaviours through which that judgement is put into practice.
Within the same activity, we can observe how people work in teams, build relationships, influence others, respond to challenge and behave against an organisation's values. A simulation can pull this together in a cohesive and commercially relevant experience, designed to reflect the organisation, its people and the business issues they actually face.
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