How to Develop Strong Business Acumen
— February 11th, 2021
An individual who possesses strong business acumen is someone who has the ability to swiftly analyze a situation and confidently make logical decisions that lead to the best possible outcome, through a combination of knowledge, skill, and past experience.
Having business acumen means being capable of seeing the bigger picture when an issue arises, and making sense out of complex situations and an uncertain future.
Leaders with business acumen are fundamental to the running of a successful organization and are an integral part of any decision-making process. Without the presence of a professional with strong business acumen, who is capable of making decisions under pressure, teams will all too often waste valuable time going back and forth in an attempt to reach a decision
It’s important to understand that business acumen isn’t something that someone either has or does not have. Most people develop it through training that provides them with an awareness of the key skills required for better decision-making, leadership, and strategic thinking.
Unfortunately, until very recent years, business acumen was not seen as a priority for internal communicators to have in their armory of skillsets. This, regrettably, did nothing to advance the strong argument that communication professionals should have a seat at the C-suite table, where business acumen is a prerequisite.
Thankfully, this is now changing and many IC professionals are becoming much more proactive in addressing this essential skillset issue.
Business acumen in internal communications – Why it matters and how to build it
How do you demonstrate strong business acumen?
Understand the Business Model
Understanding the business model of an organization is very important for business acumen and goes beyond the basics of how a company operates and makes money. This understanding should reach deep into all aspects of a business including the marketing cycle, talent acquisition, company supply chain, and business life cycle.
The greater the knowledge of the factors affecting an organization’s ability to generate revenue, the easier it will be to develop clarity about the consequences of any decisions made.
Tips for understanding the business model:
- Tackle unfamiliar areas: leaders who possess business acumen have worked hard to gain an understanding of all areas of a business, even those they previously had no familiarity with. This does not mean they are aware of every minor detail of each area, but that they have a general understanding. Being equipped with this variety of knowledge is what sets these individuals apart and makes them capable of confidently making wide-ranging decisions.
- Examine Strategies: Being up to date and aware of an organization’s current targets and objectives is a vital component in understanding its business model. It’s important for professionals to ask questions such as: What are the company’s growth strategies? Do they have any plans to evolve? Why are they pursuing certain revenue opportunities over others?
Learn the Financials
In order to develop business acumen, it is essential to possess a strong knowledge of an organization’s economics, from its key numbers to financial mechanics. With this information at hand, professionals can comprehend all financial implications of their decisions, and they will also have the means to measure the success of their choices. Without a background in finance, it can be challenging to grasp the ins and outs of business economics. Here are some ways to help with this:
- Track key statistics: Quantifiable data can be gained by identifying important financial metrics of a company and keeping track of them over time. Doing this provides the data required to make informed decisions, and it also can be used to analyze the outcomes in order to learn from experience.
- Ask for help: When struggling to comprehend the metrics being utilized by an organization, the best course of action for a professional is to seek help. Asking a colleague who is adept at understanding company-specific metrics may help, or another course of action is to find a mentor within the organization who can aid in increasing financial literacy.
Education plays a significant role in the development of business acumen and that is why it’s important to continuously seek out new knowledge. This knowledge can’t always be acquired while in the office and often those looking to gain it must look further. Taking action such as signing up for a business class, related to their industry or role, is one great way for professionals to enhance their skills.
Tips for seeking education:
- Stay informed: One of the most effective ways for a professional to gain knowledge to aid in the development of business acumen, is to keep up to date on business news, especially developments related to their specific field. This will provide valuable insight into events happening that could affect their organization and allow them to learn from other companies.
- Follow business leaders: This is an opportunity for professionals to expand their business knowledge by following prominent business leaders. Reading their blogs or following these leaders on social media is a good way to gain insight into their thought processes.
Listen to customers
Professionals who dedicate time to get to know their customers will gain valuable information such as what encourages them to buy from their business and what matters most to them. Having this knowledge can help prepare for any potential issues. Business acumen means being willing to learn about customers and identifying the best path for delivering compelling products and services.
What Skills or Characteristics Demonstrate Good Business Acumen?
Possessing strong leadership and management capabilities is a powerful component of business acumen. Having these skills allows those in leadership roles to inspire, motivate and build respect among employees. By effectively managing employees, leaders can succeed in identifying workers’ needs and strive to meet these needs to ensure a positive and efficient work environment.
Financial acumen refers to a person’s financial capabilities and their comprehension of processes related to reporting, managing funds, forecasting, and other economic skills. Having financial acumen means being adept at understanding what creates profit and reduces loss within an organization, in addition to being capable of managing financial indicators related to stakeholders, resources, goals, and market success.
To be a strategic thinker, an individual must be capable of putting strong and detailed plans in place that help businesses reach their goals and objectives. These strategies are crucial in identifying any potential issues that may arise and putting a plan in place to ensure the company is prepared to deal with them. Good strategic thinking skills include prioritization, organization, flexibility, and planning.
A professional with good business acumen should possess a solid understanding of the marketplace within their industry. This includes an understanding of their company’s target audience, where this audience spends its money, and their buying patterns. In addition, this knowledge of the market should expand into having information about competitors and how they compare to their own company. With this insight, professionals will be capable of making effective decisions that will attract customers and ultimately increase the company’s bottom line.
Analytical skills include a person’s ability to gather and analyze data, which allows them to see problems from various angles and to decide on the best method of tackling these issues. Being analytical allows a professional to display business acumen by solving complex problems in order to make important decisions.
Business acumen in internal communications – Why it matters and how to build it
Why is business acumen important?
Professionals with business acumen are extremely important to an organization due to their in-depth understanding of how the business works, how it makes money, and how specific strategies and decisions impact business results. Possessing knowledge across all areas of an organization allows these professionals to confidently make important choices that may have a company-wide impact.
Business acumen is a vital component in business as without it organizations will suffer due to their inability to act quickly and effectively. Working towards developing business acumen can ensure such issues are avoided and equip professionals with the skills necessary to contribute towards their company’s continued success.