Learning From the Apprentice 3: Commercial Edge Counts First and Foremost

In this occasional blog I reflect on the consequences and L&TD issues arising from the BBC series the Apprentice. This month I want to focus on the deficiencies which led some of the contestants, to make commercial decisions which were disastrous for their team and which gave Lord Sugar as a sales based businessman ulcers.

At the CIPD we have through our Next Generation HR project identified with our research Partners Bridge the necessary savvy which HR professionals need to develop and deepen if they are to be effective to the business. We focus on business savvy aspects here. But see People management April 2011 for an article by Lee Sears. Lee discusses importance of insight driven HR and the fact that we need to raise our game and translate the data to which we have access.

However  episode 2 and 3  of the apprentice made me think of a more basic gap, and how that that gap can indeed be helped by concentrating on building business savvy. In episode 2 Laura made a really daft call by not allowing Boots to sell the useless Bookeeze through their store network.  Boots understandably wanted to make a profit and have ownership of the brand. In episode 3 a much more fundamental error with calculating the production and costs of bakery products caused a team to deliver less than 2 per cent  of the customers order. It also famously led to one of the worst televised pieces of numerical incompetence ever seen. In this piece I want to focus on the numeracy issues because I think they like at the root of a lot of people’s problems with being commercially able or otherwise. I also think that the business savvy which Lee sears talks about would build the smarts which would help tackle these problems.

Let me explain.

If Mellissa who billed herself as a “food service delivery manager” was able to demonstrate the savvy we think HR professionals should demonstrate  (bearing in mind she wasn’t an HR specialist), then she would probably have known that there is no way a bread roll even if conveyed on a velvet cushion to the Ritz could cost that much. Why because if it did nobody would be able to make any money in her business.  Think of it if a bread roll costs 35p and a decent loaf £1.15 then the loaf would cost three times more. That would make a decent loaf cost roughly £11.65. OK it can be discounted but we would still We’d be down to the consumption levels of African villagers (which might be no bad thing)  but very worrying for Warburtons and horrendous for Hovis..  Now if she had basic business savvy of her food service delivery, she would never make that mistake. . If she knew a bit more she would know that the economies of scale argument tell you that if you produce more of a thing it gets cheaper.  If she picked up her company’s annual report she’s knew what the issues were in terms of margin, cost profit, costs of inputs etc.  However she didn’t have a Scooby and made herself look like a dunce. We’ll discuss why next week, and then we’ll look at how she could add baked in commercial savvy to her obvious flair  for presentation and  promotion.