You Can't Lead What You Don't Understand
One of our clients runs a product business. Smart operator. Good instincts. He'd been in the industry long enough to know when something felt wrong.
For years, "felt wrong" was his commercial framework.
Then, in a coaching session, he said this: "We were one bad month away from folding. Always solvent. Good collections. Good payments. Good orders." He'd sorted it. But the near-miss shook him — because he realised he'd been managing the feeling, not the numbers. One bad month, and he wouldn't have seen it coming.
That conversation changed how he ran his business.
In our analysis of 500 executive coaching sessions, commercial and business acumen ranked third overall — 14% of all insights across every sector. In construction and infrastructure, where leaders are directly accountable for margins, pricing, and project outcomes, it ran at 18%. The pattern is consistent: leaders who move up, or who build businesses to scale, often outpace their commercial literacy. The business gets more complex. The financial stakes get higher. And the leader is still making calls on gut feel and revenue line.
Revenue isn't the story. Margin is the story. Profitability is the story. Knowing which customers make you money and which ones cost you money — that's the story.
Most leaders at this level know that. Far fewer have built the disciplines to act on it.
The commercial gaps we see most often aren't about intelligence. They're about proximity. The further a leader gets from the numbers — the more layers between them and the P&L — the more abstract commercial performance becomes. Strategy gets discussed in percentages and PowerPoints, while the actual margin on a specific job, client, or product line quietly bleeds.
One of our clients — a senior leader managing growth across multiple markets — reflected on an exit they made from Melbourne: "The exit was based on data showing we made a loss on the service. Reflecting on that — it highlighted the need to know company DNA and to create the secret sauce." They made the right call. But it took hard data to surface what instinct had been papering over.
That's not a failure of leadership. That's what happens when the business moves faster than the information systems that support it.
What changes when leaders get serious about commercial acumen:
Decision confidence improves. When you know the numbers, you stop hedging. The data does the heavy lifting in tough conversations — with boards, with partners, with underperforming parts of the business.
You stop chasing the wrong growth. Not all revenue is good revenue. Leaders who understand their commercial model make faster, cleaner decisions about where to play and where to stop.
The team gets sharper. When a leader talks in commercial terms — margin, cost of service, return on effort — it shifts the conversation across the organisation. Teams start thinking like owners.
There's a version of this that's just financial literacy — knowing how to read a P&L. That's table stakes. The deeper version is understanding the commercial logic of your business: which moves create value, which ones destroy it, and how to tell the difference before you're reviewing a post-mortem.
One of our clients in a competitive infrastructure market said it plainly: "In a tough market there are always opportunities. No risk, no reward — if things are going OK you can be complacent. As the business evolves, the need to stay relevant changes. There is a need to act faster."
Complacency at the commercial level is almost always invisible until it isn't. The leaders who stay sharp here don't just survive market turns — they move while others are still working out what happened.
The numbers tell you what's true. The question is whether you're reading them closely enough.
At Pivot & Pace, we've spent over a decade working alongside New Zealand's most ambitious business leaders. This post draws on analysis of 500 coaching sessions across 100+ executives. If your commercial thinking needs sharpening, let's talk.
#Leadership #CommercialAcumen #BusinessPerformance #ExecutiveCoaching #PivotAndPace