Business acumen is one of those buzzwords that most people say they understand, but very few can concisely describe. In fact, I would be willing to bet that when you read the title, you may have thought, “Huh, actually, I don’t exactly know what developing business acumen means.” This is a common response as we broach this topic in our learning and development training programs, more and more of which focus specifically on developing business acumen skills.
Hopefully I will be able to shed a little light on this vague topic, or at the very least make you question what you really know.
Full disclosure, I majored in mechanical engineering in college. So, who am I to write a blog about business acumen, right? Wrong.
Okay, not necessarily wrong, but the topic of this post most certainly correlates with my experiences in engineering. Especially when you consider my experiences led me to explore a career in business and ultimately landing at a leadership development consulting firm.
I went through 4 years of math, physics, engineering, and just about everything else under the sun without hearing the words business acumen. That is, until the final semester when we were suddenly expected to have it. Four basic business classes later and we could go out into the world telling potential employers our program gave us business acumen.
See what I mean by buzzword?
So, what exactly is business acumen, and at what point can somebody say they have it?
Business acumen takes many forms. You might think of it as understanding your market and how you fit within it. You might see business acumen as financial acumen, understanding how money is made and the various goals of a company. You might also believe business acumen is all about understanding the many facets of your company’s work, whether that’s operations, sales, or accounting. The point is, there’s no one right answer to the question.
What I’ll post is that business acumen is not what you know, but how you use that knowledge. It’s the difference between watching football and playing football. Anyone can play Monday morning quarterback, but you’re not considered a football player until you’re on the field on Sundays. How is your knowledge of your company’s financial goals affecting your everyday decisions? Are you thinking about your position in the marketplace when making key product decisions?
One thing is certain, leaders and employees who have a strong grasp on business acumen make decisions that are consistently beneficial to the company. You are able to see the elusive ‘big picture’ while making tactical decisions that affect your team’s day-to-day. You’ll know that you have it when you can tie each of your decisions to a business outcome and defend your decisions from that setting.
If you look around, there are countless companies, blogs, and websites dedicated to ‘developing’ business acumen. Almost all of these are geared towards increasing your knowledge, and very few actually help you develop the skills and habits needed to actually see this affect your decision making in a positive way.
Business simulations are one pathway to truly developing this skill. Simulations put people on the field on Sundays and allow them to feel what it’s like, experience decisions and then see how they affect the business. This methodology, as part of an effective learning and development training program, ensures your employees not only gain the knowledge they need to make effective decisions but also provides a roadmap for developing tangible business acumen.
This way, when your employees say “I have business acumen” they actually mean it!