A leader can only be effective if one has a good combination of business acumen skills. People will respect you as their leader if you are dynamic in your role and have a good business sense.
In this modern business world to survive technical knowledge, skills and understanding of the market has all become very important.
What is business acumen?
To give you a good idea of what business acumen is all about, just think of it in the following ways:
- You understand how your company makes money.
- understand how your customers is satisfied.
- recognize individual’s contribution in making company success.
- perceive elements that works in building company.
To summarize, you need to have wide competencies, knowledge, awareness of multiple aspects of business and understand how business works.
Through this simple approach of understanding what business acumen is, business professionals are able to stick to a sensible progression that will help them reach the right decisions. These decisions are the ones that will facilitate the best results that can benefit both companies and their clients.
The Many Facets of Business Acumen
Now, you might still be wondering what business acumen really is in the first place. The truth is that business acumen not just entails one skill. Instead, it is a more expansive set of competencies that need understanding of different business areas that include the following:
The leaders in this modern world are expected to have a deeper insight into the specific marketplace where their business belongs to. It involves identifying the target customers and the things they need and want, knowing who the competitors are and their offers, and the particular trends that shape and redefine the marketplace as a whole. This also calls for a more intimate understanding of the competitive positioning of the company, its value proposition to customers, and how this will be supported by leadership.
Developing a good sense of business and financial acumen will not just speed up individual growth as this can also help the company in its way to success.
It is essential to know the effects of decisions on bottom-line is financial results. Leaders are expected to have a solid understanding of basic financial metrics and reports to monitor performance and correct plans as necessary. They also need to understand the effects of decisions on cash flow, use of assets, and profitability.
Business System Thinking
When leaders get more responsibilities, they should be more aware of the impact of their decisions on other people, considering their functional requirements and the business’s broader needs. It is also about the ability to see the big picture and how decisions are interdependent with each other. This also entails learning how all of thee combine to reach good financial results and competitive advantage.
Why Financial and Business Acumen are Imperative Today
Large corporations have been concerned about business acumen for the longest time. While many corporations are aware of the need for business acumen, they still have a hard time defining and embedding it in their organization. As a result, it results in a gap in business acumen skills and this also affects the bottom line.
It has also been revealed that more and more leaders are at a consensus that business acumen is one of the core components that enable organizations to achieve their strategic priorities. A company with good decision-making capabilities and solid business acumen has a higher chance to become a leader in the market when it comes to market share, profitability, and revenue growth.
However, many leaders also admit that inadequate business acumen currently constraints the ability of their organization to effectively turning strategies into reality. To make things worse, at the senior manager and manager levels alike, the business skills that respondents identified to be the most important also happen to be the same capabilities that need further development the most.
Solid and good business skills serve as the fundamental strength of almost all enterprises. To form a team with a commitment to quick execution and establish a high-performing culture, it is a must to develop sound business acumen. If not, you cannot expect to be as successful and thriving as you should and can be.
Business acumen skills
If you are wondering how you can demonstrate business acumen better, here are a few skills you can develop:
Hone your skills in strategic thinking
Just because you have exceptional technical skills doesn’t necessarily mean that others will consider you as a good leader already. You have to demonstrate an ability to think of the bigger picture. And skills to increase your chances of landing an opportunity for a higher level leadership position.
You need to have a better awareness of the entire organization and a good understanding of strategic direction. Also the ability to reach strategic decisions, see opportunities and innovate.
Focus on the most important things
Being the leader, you need to focus on the things that matter the most to your organization. Often get too submerged in their busy schedules that they tend to lose sight the strategic objectives of the business. Make it your priority to focus on activities that will help business to move closer to reaching the goals.
Embrace the numbers
Showing that you lack financial acumen may end up damaging your credibility as a leader. Make sure you know your numbers and discuss them in a way that exudes your depth of knowledge. Embrace your financial knowledge to the fullest and focus on key metrics as the key part of your strategic decision-making.
Developing a good sense of business and financial acumen will lead to individual growth. It will also help in the contribution to the company success.