“Business Acumen” is a term that generates a great deal of discussion lately about how powerful it has become for successful companies to weather harsh business climates or to utilise new opportunities to drive growth.
In simple terms, one may argue that business acumen is a functional comprehension of how the company achieves profitability through its people. This includes understandings of concepts such as financial acumen, market orientation and/or strategic perspective.
In practice, people with business acumen are mostly described as people with “business sense” or “business ability” who use explicit as well as implicit knowledge to achieve completeness, integration and critical thinking while assessing a business situation. Managers with high levels of business acumen keep on making the right business decisions most of the time.
Bearing the above in mind, wouldn’t you support the idea of having people with strong business acumen work in your organization?
As discussed in our previous white paper, business acumen is now moving towards a broader concept that includes a profound understanding of the core of the business and a more specific understanding of what it takes to achieve organizational goals and objectives. To this extent and due to the fact that change is inevitable in fast changing business environments, it is of crucial importance to be able to equip our people with appropriate, deep understandings of the bigger picture, of functional business processes and their inter–relationships and also to include particular inter-personal and leadership skills in order to achieve desired outcomes.
The question can be asked whether or not business acumen is a key trend that needs development and investment during times of change. It is worth noting at this point that one thing that is guaranteed about business is that, positively or negatively, there is always change and change affects all organisations all of the time.
Through change comes radical transformation; through radical transformation come important assessments and decisions, and through assessments and decisions come skills realignment and the need for strong business acumen to manage such change efficiently.
It is of crucial importance to refer to change implications when we speak of the need for developing business acumen in an organization and when we address the issues of “What’s in it for me” to make the change a comfortable process. According to research by IBM and McKinsey, presented by John I. Todor (2012), most business leaders honed their skills by focusing on operational efficiency, a focus that worked well for most of the 20th century. Nonetheless, notable arguments exist as to whether leaders should contend with a world where change and innovation, external to their organizations, undermines or destroys the value of business-as-usual. In order therefore to adapt, thrive and deliver value to customers, we are required to “think differently”.
Consequently, in order to be profitable in times of change, leaders should think differently by linking insightful assessments of the external business landscape with a keen awareness of how profit can be made. Business acumen is one of the main areas that organizations need to develop and apply in order to grow expertise and as a result, achieve positive financial results.
The need for developing your workforce’s business sense through business acumen is becoming more essential every day. Nowadays, practitioners and researchers argue that if you do not have powerful business acumen, you cannot recognize or understand what your customer values or why they value it. By developing strong business acumen skills and appropriate behaviours, you will better understand your customer’s business and make them feel that they are understood!
This is due to the fact that if you continually cultivate your knowledge including your understanding of how businesses run, at all levels, and how the existing change affects the way your organization operates, it will facilitate your ability to make informed, high quality decisions which will complement your efforts and elevate the organization closer to its ultimate targets. Business acumen is an acquired skill and requires specific development by training specialists.
In conclusion, enhanced business acumen has become a mandatory requirement for your organisation’s personnel because such skills provide direct and immediate value to the company in terms of managing fast changing business environments and equipping your people with the appropriate tools to effectively deal with business challenges and to excel in their respective roles.
|Read more about Behavioural Leadership and Business Acumen and discover how TTM associates is helping organisations to develop their people through steep learning curves.|