What Does Business Acumen Mean For a Corporation?
Business acumen has long been a source of consternation for large corporations. For example, frequently we have heard CFOs comment that their senior leaders put together “half-baked” business cases without fully thinking through and justifying their underlying assumptions.
Most corporations recognize that business acumen is necessary, but struggle to define and embed it across their organization.
Through our extensive experience, we have discovered that the requirements of business acumen tend to be stratified across an organization’s hierarchy. The essential business acumen skills for a front-line manager are not the same as for a mid-level manager or a senior leader.
If we take two of the most important components of business acumen, financial acumen and strategic thinking, experience has shown the knowledge areas at various corporate levels are the following:
Front-line supervisor or manager: business acumen is primarily focused on financial literacy and financial acumen—understanding how the business makes money, and optimizing the levers they impact to drive value.
Mid-level leader: while financial acumen continues to be an important area of development, business acumen starts to incorporate more strategic thinking—how do you take the strategic objectives of the senior leaders, internalize them, and then execute within your part of the organization.
Senior leader: at the executive level, business acumen is about strategy formulation, understanding critical interdependencies, collaborating across functions and business units, having a global mindset to foster geographical expansion into new regions or countries and more.
Why Is Business Acumen Important and How Do You Build It?
Without business acumen, employees have a difficult time understanding business strategies and how to implement them effectively. This problem can be further exacerbated when the larger organization is misaligned and functions fail to work together.
Learning business acumen is like studying a new language or riding a bike for the first time: unless you actually do it, it is difficult to master. Traditional methods of teaching business acumen via reading, lecture, and case study are less than effective. Reading about business acumen without practicing it doesn’t give employees the confidence to do it well. Furthermore, attempting to develop business acumen on the job can be exceptionally risky: the costs to the organization are high, when people make mistakes like running out of cash or angering a customer.
The best way to bring business acumen to life is through experiential learning and, in particular, customized business simulations. These learning platforms create highly realistic, engaging experiences that lead both to behavior change and effective back-on-the-job implementation. Furthermore, costly mistakes that could cripple a company are avoided. The end results are quantifiable and measurable, illustrated in everything from revenue growth to employee engagement. The impact is profound.
Stay tuned for part three to be released next week on Business Acumen or go to our website at www.bts.com: How Developing Business Acumen Leads to Behavioral Change, Measurable Business Results and Why it is Key in Delivering Long-Term Results.
See part one by clicking here.
Rommin Adl Bio
Rommin Adl is the Executive Vice President of BTS USA & Managing Director of BTS Interactive and leader of Global Marketing. He has been with BTS for over 15 years in the roles of senior consultant, seminar leader, project leader and account executive. He has worked with a broad base of BTS clients including Aetna, AT&T, Chubb, Honeywell, Humana, Swisscom Mobile, Time Warner, Tyco International, and many others.
