For the commercial manager, responsible for producing profitable income for the business, any failure to achieve the planned business results and income could be a serious situation for the business, which might bring into question the commercial manager’s position. How a commercial manager deals with such a situation when things go wrong will mark them out as either an effective manager or as someone who according to the Peter Principle, has reached the level of their own incompetence,.
The Deepwater Horizon oil spill in the Gulf of Mexico has been both a financial and public relations disaster for British Petroleum. Marine oil spills are an expected although rare event in the oil extraction industry. No doubt BP had contingency plans to deal with such a problem, but results suggest that they were inadequate. The engineering solution to cap the leaking well, proved more difficult and protracted than expected, and the company lost control of the media story, which seriously damaged public relations. Given the nature and extent of the accident, could the situation have been better handled? In hindsight, probably yes. Better risk assessment and contingency planning, including the having necessary resources readily available might have saved time and reduced the environmental damage. Perhaps a more considered approach regarding how the public might view the company and its actions could have guided BP’s press relations, and thus blunted to some extent the negative perceptions and reactions of the media and public.
When things go wrong in business, they can either happen quickly or slowly. Events that develop slowly are those which should more easily be managed. Provided the procedural processes are in place, progressive changes in the business and market environment should be expected, observed and effectively managed. However, it is the rapid and unexpected development, either externally or internally, which usually compromise business and marketing plans and potentially form a serious crisis for the company. Being able to deal with the unexpected change of circumstance as they arise, is therefore an important attribute for every commercial manager,
Changing situations and unexpected event may provide opportunities as well as threats to business operations and both may require quick decision making and action if opportunities are not to be missed or threats become dangerous. It should therefore, be a normal part of the planning process to identify potential threats and opportunities and specifically, to prepare contingency plans and resources to deal with them should they be required. It should never assumed that all will go as planned; customers may provide new opportunities or may fail to complete on expected orders; sales may not reach targets; promotional programmes may yield unexpected demand that creates production problems or alternatively, fail to produce the expected result for the investment made. These are the sorts of events that should be anticipated as potential problems which would require a rapid and planned response to ameliorate the potentially damaging results. But what about other unexpected or unplanned events? A full planning process should incorporate both a SWOT (strengths, weaknesses opportunities and threats) and a PEST (political economic social and technological) analysis but these tend to be restricted to the immediate business and its environment. However, there may be scope for widening the opportunities and threat into a business risk assessment to identify the nature and breadth of vulnerability to potential risk, while considering the potential and nature of unexpected opportunities.
Every business should have a publicity plan to deal effectively with both positive and negative media coverage. By using media specialists, a commercial manger is better placed to deal with any potentially damaging media stories in an effective manner. Alternatively maximising the use of positive media stories, such as new products and developments can develop a positive perception of the company in the business environment.
Umpteen problems can arise quite suddenly and create enormous difficulties. For example, a mistake with a customer, a product failure, or a negative media story could create damaging publicity which can spread quickly and widely, especially through the internet and social media. But not all unforeseen events produce potential dangers; some if acted upon quickly, can provide profitable opportunities; for example, a competitor ceases trading or withdraws support for its customers, the arrival of new technology, or access to new markets.
While specific events may not be foreseen, potential types of events and risks can be identified. Then an assessment of the potential risks may be made and contingency plans in outline and detail prepared accordingly.
The commercial manager should always plan for the best, but be prepared for the worst events.
• One cannot plan for every possible eventuality, but by using risk assessment it is possible to identify the sorts of unexpected events and assess the probability of their fruition.
• Consider the events that have greater risk of occurrence and make contingency action plans including identifying the necessary resources required to deal with the situation quickly.
• Be aware that most “unexpected events” come from external sources, such as economic, legal, and therefore are more generally predictable rather than unexpected. Unexpected events might be accidental, e.g. a major supplier is destroyed by fire, or freak weather disrupts transport.
• Ensure that media specialists are kept informed of all developments at all times, so that they can manage the company’s business news to best effect.
Most commercial events are predictable to a greater or lesser extent, thus the commercial manager should always have prepared contingency plans that can immediately be enacted. Ultimately, when things go wrong, it is the responsibility of the commercial manager to reduce the negative effects and to exploit and maximize any opportunities that unexpectedly arise. Unexpected events may not be the fault of the commercial manager, but their management actions are fundamental to making matters better or worse. Having a prepared action plan for the “what if” situation, is an essential requirement for the commercial manager and for all senior managers.
N.C.Watkis, Contract Marketing Service
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