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People & CultureLeadership & Management

Building stronger commercial and decision-making capability in managers

Develop managers who understand branch economics, make sound decisions and lead through others.

11 questions answered

Questions answered on this page

01How do I develop stronger leaders below me?
02How do I assess the capability of my management team?
03What skills should a merchant branch manager have?
04What should a new branch manager learn first?
05How do I develop commercial awareness in managers?
06How do I teach managers to understand margin?
07How do I improve financial understanding in branch managers?
08How do I develop better decision-making in managers?
09How do I know whether someone is ready for promotion?
10How do I identify management capability gaps?
11What decisions should branch managers own?

How do I develop stronger leaders below me?

Developing stronger leaders requires more than sending people on a course. Define the decisions and results each leadership level should own, then give managers real opportunities to practise with suitable boundaries. Discuss their reasoning, not only the outcome, and resist taking work back at the first sign of uncertainty. Use branch reviews, customer decisions, stock issues, people conversations and short improvement projects as development evidence. Feedback should identify one or two specific capabilities to strengthen rather than describing someone broadly as lacking leadership. Senior leaders also need to examine whether their own behaviour creates dependency. If every significant question still returns to the owner, MD or regional manager, capable people cannot build judgement. Development works when responsibility, feedback and reflection repeat through normal business activity.

How do I assess the capability of my management team?

Assess capability against the work managers must perform, not personality or reputation. Consider commercial understanding, operational control, people leadership, decision-making, communication and the ability to turn priorities into action. Use several sources of evidence: sustained results, observed behaviour, quality of decisions, team capability and how the manager responds when conditions change. Allow for the branch context so a strong market does not disguise weak management and a difficult site does not automatically label someone ineffective. Separate current performance from potential and willingness to take broader responsibility. The purpose is to identify strengths, risks and development priorities, not produce a league table. A useful assessment should lead to clearer support, experience or accountability for each manager.

What skills should a merchant branch manager have?

A merchant branch manager needs to balance customers, people, stock, margin, cash and daily operating control. They should understand branch economics, manage pricing and discount decisions within authority, maintain stock and credit discipline, plan team capacity and uphold essential safety and service standards. They also need to set expectations, coach performance, handle difficult conversations and communicate priorities clearly. Product or sales credibility helps, but it is not enough on its own. The manager must create results through the branch rather than remain its busiest individual contributor. The exact mix varies by branch size and format, so define the capabilities required for your operating model. Then assess evidence in real work rather than assuming length of service equals readiness.

What should a new branch manager learn first?

A new branch manager should first understand what they own, how the branch makes money and which controls cannot be allowed to drift. This includes customers and service promises, gross profit, pricing authority, stock, credit, staffing, safety and the small number of measures used to review performance. They also need to understand the team, current commitments and the decisions that require escalation. Avoid overwhelming them with every report and procedure in the first week. Use a structured 90-day plan that moves from understanding to controlled action, with frequent review from an experienced manager. Early success is not measured by how quickly they change everything. It is measured by whether they establish trust, protect essential controls and begin making sound decisions with increasing independence.

How do I develop commercial awareness in managers?

Commercial awareness grows when managers can see how everyday choices affect gross profit, cash, service and capacity. Work through real branch decisions such as a discount request, free delivery, special purchase, stock range change or slow-paying account. Ask what value is created, what costs or working capital are added and what could go wrong. Give managers a focused set of reliable measures and compare actual outcomes with the assumptions behind earlier decisions. Broader exposure also helps: supplier discussions, credit reviews, customer profitability, stock meetings and budgeting show how different parts of the business connect. Avoid presenting commercial awareness as a collection of finance terms. It is the ability to make balanced decisions, explain the trade-offs and learn from the result.

How do I teach managers to understand margin?

Start with the decisions managers make rather than a classroom definition. Show the difference between turnover, gross profit value and gross margin percentage using familiar products, customers and discounts. Demonstrate how supplier cost changes, rebates, credits, delivery, handling and product or customer mix affect the result. Managers should understand why a small discount may require a much larger increase in volume to recover the profit given away, but avoid turning one illustration into a universal rule. Use actual branch information and ask managers to explain the movement in their own words. Then connect margin to the authority they hold over pricing, stock and customer decisions. Understanding becomes useful when it changes a decision, not simply when someone can repeat the calculation.

How do I improve financial understanding in branch managers?

Focus on the financial information a branch manager can influence. Explain the relationship between sales, gross profit, controllable cost, stock, debtors and cash using the branch’s own figures. Show how operational choices appear later in the accounts: excess stock ties up cash, poor credit follow-up delays collection, overtime raises cost and discounting reduces gross profit. Use a short, consistent branch view rather than expecting managers to interpret a full management pack without context. Review movements and decisions together, allowing managers to ask basic questions without embarrassment. Financial understanding is not about turning branch managers into accountants. It is about helping them recognise consequences, challenge unusual results and make better choices within their authority.

How do I develop better decision-making in managers?

Give managers decisions that match their current capability, with clear outcomes, boundaries and escalation points. Before offering an answer, ask what they know, what options they see, what risk each option creates and what they recommend. After the decision, review the result and the quality of the reasoning rather than judging only with hindsight. Increase authority as evidence of sound judgement grows. Managers also need timely information; asking for better decisions while reports are late or unreliable creates hesitation rather than capability. Avoid rescuing every imperfect choice, but intervene where customer, legal, safety or material commercial risk exceeds the agreed boundary. Decision-making develops through repeated ownership and feedback, not through observation alone.

How do I know whether someone is ready for promotion?

Readiness should be based on evidence that the person can perform important parts of the next role, not simply excel in the current one. Define the capabilities and decisions required, then create opportunities to test them through branch cover, projects, team briefings, coaching, commercial decisions or responsibility for a control area. Observe how the person handles pressure, feedback, uncertainty and results achieved through other people. Confirm that they want the role and understand its less attractive responsibilities. A temporary stretch assignment can reveal both strengths and support needs without implying a guaranteed promotion. Someone does not need to be finished before moving, but the remaining gaps must be understood and manageable through a clear transition plan.

How do I identify management capability gaps?

Begin with the business outcomes and decisions managers are expected to own. Compare that requirement with evidence from branch results, observed practice, decision reviews, team performance and recurring escalations. A weak result alone does not identify the gap; poor margin might reflect pricing judgement, stock mix, market conditions, data quality or central policy. Look for repeated patterns across situations and distinguish knowledge, skill, confidence, capacity and willingness. Ask managers where they feel least equipped, but do not rely on self-assessment alone. Group common gaps where shared development would help, while keeping individual actions specific. The output should be a small number of clear development priorities linked to real work, not a long competency report that nobody uses.

What decisions should branch managers own?

Branch managers should own decisions where local knowledge is valuable and the risk can be controlled within clear limits. This normally includes daily customer response, team deployment, routine pricing or service exceptions within authority, local activity and the operating actions needed to deliver agreed standards. Central or senior approval should remain where decisions create wider legal, safety, credit, brand or material financial exposure. The exact boundary depends on branch size, manager capability and the operating model, but it must be written plainly and escalation must be quick. Review decisions and outcomes rather than requiring permission for every action. Too little authority creates delay and dependency; unclear authority creates inconsistency. Useful ownership combines a defined result, reliable information and known limits.

What you may be seeing

Managers report numbers but struggle to explain the decisions and drivers behind them.
Commercial, people and operational decisions are repeatedly escalated to regional or senior leaders.
Strong individual performers are promoted without evidence that they can lead through others.
Management development relies mainly on courses rather than practice in real branch situations.
The business cannot state clearly which capability gaps create the greatest performance risk.

What good looks like

A capable merchant management team understands how the business makes money and how branch decisions affect customers, margin, stock, credit, cost and cash. Managers know the decisions they own, use a focused set of reliable information and can explain their reasoning. Development takes place through real responsibility supported by timely feedback, not courses alone. Promotion decisions use evidence from the next role, and remaining gaps are addressed through a clear transition plan. Senior leaders challenge and support without becoming the answer to every question. Capability is reviewed against the future needs of the business as well as today’s role, creating stronger branches and a more credible succession pipeline.

What may be happening underneath

Role expectations: Management capability has not been translated into clear decisions, behaviours and evidence for each level.
Business understanding: Managers see separate reports but do not understand how customers, margin, stock, credit, cost and cash connect.
Experience: Potential managers receive information but too few controlled opportunities to practise responsibility before promotion.
Authority: Decision boundaries are unclear or senior leaders continue to approve routine choices.
Feedback: Reviews focus on outcomes and tasks without examining judgement, leadership behaviour or learning.

Questions worth asking

01Which decisions should each management level be capable of making without escalation?
02Where do managers understand the number but not the commercial driver behind it?
03What real work could be used to test and develop capability before promotion?
04Which recurring escalations indicate unclear authority or a genuine capability gap?
05Are our strongest managers building more capable people below them?

Where to go next

Turn management potential into practical capability. BGC leadership development resources help merchant managers build commercial understanding, decision confidence and the ability to create results through their teams.

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