Have you wondered what it takes to super-charge your career? To move from a team leader to a senior role?
Many ambitious professionals ask themselves this question. One key to unlocking your senior management potential is by developing business acumen. But what is business acumen and how do you develop it? This introduction to business acumen infographic answers those very questions.
Business Acumen Definition
Business acumen, also known as business savvy, is the ability to see the big picture of an organization outside, understand all functional areas of an organization and the interdependencies between them, and how decisions in one department impact others and the business. Those with strong business acumen understand how the company makes money, have a keen eye towards market orientation and the competitive landscape, and can combine these skills to develop strategies to create value for their organization.
Why Does It Pay To Develop Business Acumen?
If you want to set yourself apart from your peers and show you’re ready to step into a senior leadership role, developing business acumen is the way to go. In a report from the Career Advisory Board which surveyed business leaders, nearly half of the respondents said their new talent lacked essential business acumen. Furthermore, 65% of business leaders agreed that a lack of business acumen held their organizations back.
Without a holistic understanding of the different business functions, how they intersect, and how your organization creates value, your ability to make sound business decisions will be hindered. Your progression upwards in the organization will reach a plateau — as the bar for success shifts from executing tactics to formulating strategies that deliver results as you move up the corporate ladder.
What Are Business Acumen Skills?
Business acumen isn’t just one skill. It combines a broad set of knowledge, abilities, and perspectives to understand multiple aspects of a business to make sound strategic decisions. In the simplest of terms, it is the ability to think like the CEO. The good news is by deepening your understanding of many topics you can grow and strengthen your business acumen. Here are 5 areas to focus on:
Much like business acumen, financial acumen is having the basic knowledge of financial principles to make sound business decisions. Financial acumen is the linchpin to strong business acumen and is necessary to acquire as almost every decision made at a senior level will impact the profitability of an organization. Those with financial acumen can speak the language of the CFO, understand and interpret financial statements and balance sheets, and incorporate financial information into their decision-making process.
Those who are business savvy understand the different functional areas of a business and the interconnectedness of an organization. Therefore, having a foundational knowledge of all the other departments outside of your own functional area is key to business acumen and, in turn, better decision-making.
A deep understanding of the customer, their expectations and pain points, their journey to purchase, and the competitive landscape are must-have skills to create value for an organization as the customer must be central to the decision-making process.
Strong business acumen requires taking vast amounts of complex information and distilling it down to solve problems and make decisions, and at the heart of this are analytical skills. Analytical skills are the ability to uncover an issue, gather data through observation and research, and interpret the data to develop solutions.
Strategic thinking is how you put all of your knowledge of the fundamental drivers of business into action. It focuses on discovering and developing business insights to create value and challenging assumptions and the status quo to uncover new business opportunities. When leaders possess strategic thinking, they can anticipate opportunities and challenges to guide an organization in the right direction.
How To Improve Business Acumen?
Luckily, like any skill, good business acumen can be learned and developed. Here are 5 ways to improve business acumen.
- Read and Learn
Many of the greatest business leaders are avid readers. They tenaciously seek out new information and have a genuine love of learning. Warren Buffett is famous for how much he reads, as it has been said that he dedicates 80% of his day to acquiring knowledge, reading upwards of 1000 pages a day. Business books, industry publications, podcasts, blogs, and following thought leaders on LinkedIn are inexpensive ways to acquire valuable business knowledge.
- Invest in Business Acumen Training
Taking a course designed to equip you with the business acumen skills mentioned above is a fast-track way to increase your knowledge in the least amount of time. A common program for those seeking to strengthen their business acumen is a Mini-MBA. Typically, these programs cover the foundations of business and topics on emerging trends and are a cost and time-effective way to gain business acumen.
- Find a Mentor
A mentor is an excellent way to gain business acumen. Seek out a mentor, someone within or outside your organization, who currently holds or has held a senior role that required them to have strong business acumen.
- Seek Out Stretch Assignments
Taking a new work or stretch assignment that requires you to work with or in another department in your organization will give you new knowledge into another functional area while developing your analytical and strategic thinking abilities as you work to solve a problem.
- Listen to Your Customers
It’s never been more important than it is today to have a deep understanding of your customer, target audience, and competition. Given that your organization’s marketing, sales, and customer success departments are the closest to the customer, ask them to attend scheduled meetings to learn more and shadow them when they’re on client calls.
Conclusion: Develop Business Acumen with Niagara Institute
Developing good business acumen can dramatically impact your career trajectory, and luckily, you don’t have to go it alone. Niagara Institute’s programs such as Mini-MBA: Business Essentials, Fundamentals of Finance, and the Advanced Leadership Development Program are designed to equip ambitious individuals with the skills they need to add value to their organizations and accelerate their careers.
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