Running a business or an organization is not an easy job and many can testify to that fact. Many things need to be gotten right to develop the organization; a little mistake might interrupt the organization or halt other processes.
For an organization or a business to increase its possibility of developing and expanding, business acumen skills should be made a core competency and put into practice.
Here, we discussed what business acumen is all about, why you need it to make that organization or job work out for you, and how to use it effectively. Read and learn how to use these skills to improve your career!
What Is Business Acumen?
Business acumen means you can make better decisions out of certain circumstances and situations to get the best out of such situations. Developing business understanding is essential for both the employer and the employee to move the company towards its goal.
The skills we can get from learning business acumen don’t just apply to our work but also to our everyday activities.
Building up your business acumen and utilizing it can result in massive success in your career. With this, some people who possessed and utilize these business acumen skills have been able to step up their career games.
These individuals are considered exceptional talent and outstanding in their various fields.
Business Acumen Skills
When you have these business acumen skills, you will be able to make good decisions with the specific qualities you have gained from them.
The business acumen skills essential for the development and growth of any organization includes:
Being able to understand the consequences
Making decisions can be difficult especially if that decision weights the organization on it. You know that if you make the wrong decision, it can reduce the company’s sales, make them go bankrupt, get you fired, etc.
So, to make a decision, you have to first understand the consequences of that decision towards the company’s progress.
You can make clear decisions when you begin to weigh your choices, and pick the choice that seems less detrimental but with great results and benefits.
Through this, you know what you will be facing if things go out of your plans and the measures you can take to reduce or tackle the effects.
Recognizing the needs of stakeholders
Stakeholders contribute to the growth of any organization. These stakeholders can be some employees of the organization, partners, or even investors in the organization.
Each of these stakeholders has their reasons and goals for being part of the organization. Understanding these goals and how to help them to achieve them is one of the skills of business acumen that should be applied and used in the growth of the organization.
Understanding these goals and putting them into your decision-making plans can lead to positive results and even more investments from those stakeholders.
Ability to focus
As simple as the word “focus” might sound, it holds a lot of impact in a business setting. When you lose focus in your business, there’s no moving forward for that organization until the focus grounds are regained.
In businesses, there can be many distractions and other situations that might arise and seem more pressing to attend to. In the process of attending to these arising matters, you might lose focus on the aspects important for your company’s growth.
No matter your organization’s situation, don’t lose focus and keep your head in the game of improving your business. When you do this, you will be able to achieve more daily and gain success.
Affinity for problem-solving
This is another essential business acumen skill you have to learn. It involves applying your knowledge to solve business problems.
To do this, you have to collect vital information about any business problem to know the available solutions in solving that problem.
Next, apply the business acumen skill that involves understanding the consequences to decide on the action with more benefits towards your goals and reduced risks.
This is having the ability to relate what happens outside your immediate environment to situations in your place of work.
For employers or supervisors, it involves being aware of the changes that happen within their organization. Senior managers and employees involve looking at and observing changes from a wider external view.
How Does Business Acumen Work?
For business acumen to be productive, you have to utilize these steps, they include:
Make business acumen one of your core competencies
Most organizations have the core competencies they want their employees to focus on developing. These are their specific competencies and they ensure that their employees abide by them.
You can decide to make business acumen one of your organization’s core competencies if it isn’t included.
Also, don’t just stop there; you can make these business acumen skills a major part of your own personal and professional development. This will lead to massive gains in your organization and you will be very thankful for utilizing it.
Get a mentor
Having a mentor is one of the easy access to improving yourself in any field you choose to go into. A mentor is simply that trusted leader whom you wish to emulate and learn from.
You can identify someone you respect, admire, and want to emulate in a role related to what you are doing. Ask them questions about their role, get resources and tips from them, and learn the strategies they use while working to improve the company.
Finding such a mentor who is willing to help you in these mentioned ways will boost your career and add to your success.
Be comfortable with the financial statement and strategies of your company
This task may seem a bit challenging but it’s one business acumen skill you will need to master.
Learning about the key metrics in your organization’s income statement, cash flow statement, and balance sheet, gives you details of the organization’s financial statement and strategies.
Also, you should learn about your organization’s products and services, and how their chain of supply works.
Be aware of your company’s quarterly earnings calls
You might get confused trying to get into every detail about your company, that’s where your mentor comes in again. Your mentor can guide you through which metrics, objectives, and initiatives apply to your team and you, and how you can utilize and impact each one.
With each quarter that comes by, you can successfully build your skills in this area. You can also check out your competitor’s quarterly calls to know what you’re up against and how you have measured up.
Once you have grabbed the situation and understood everything you need to know about how the calls work, you will begin to notice the challenges and strategies of your organization. Also, you will begin to understand why the organization uses such strategies.
Pay attention to business news
There are various platforms and means to stay updated on business news. They include the Harvard Business Review, The Economist, Google, Forbes, Yahoo Finance, Business Week, and The Wall Street Journal.
This platform gives you edges on what is happening in the business world, how it can affect your business and insight into how to use it.
Listen to your customers
When it comes to any business of any form, paying attention to your customers is vital in improving the company. You should listen to what the customers are saying about your company, the services, and the products being offered.
Most times, you get ideas on tackling a problem by listening to your customers’ problems and suggesting solutions. Some customers might go ahead to tell you what most people refer to what you’re giving them.
Developing strong business acumen skills isn’t easy; it takes lots of effort and continuous practice. The practice never ends as it’s very well required in the success and development of your business.
Once you achieved developing these skills, you gain massively from it and a changed business perspective will be gotten.
How To Show Business Acumen In An Interview
Having the required business acumen skills is one thing, being able to use them to your advantage while looking for a job is another.
First, you should have a strong understanding of the organization you want to apply to work for. You can utilize the internet to your advantage by learning about the organization’s structure from the internet.
You can learn about what the organization does, who its target customers are, and the sector it operates in.
The research might not seem helpful to you at first, but it may seem quite valuable to a hiring manager. Delivering responses targeted to the organization rather providing general answers can differentiate you from other applicants and make you stand out.
Also, referring to your involvement in different projects during an interview with a hiring manager is a bonus tip to help you land that job. This demonstrates your understanding of how the business world works and assures that you know what you are signing up for.
Below are a few tips on how you can show business acumen in an interview:
You can demonstrate new products services or solutions that can result in a 10-15% return on the investments or a 5% reduction in costs.
Either way, it should aim to show an increment in the company sales and value.
Financial modeling and planning:
Showcase how you have used financial acumen to respond to business condition shifting using cash flow reports.
Also, you can apply business performance insights to estimate new revenue opportunities.
Showcase your understanding of planning frameworks or use analytical models to solve a problem.
Business continuity and disaster response:
Demonstrate how you can adjust to the supply chain or any operational procedures to fit into a hanging market.
Frequently Asked Questions On Business Acumen and How it Works
What is business acumen and why is it important?
Business acumen involves the skills that a business person, employer, or employee needs to know, understand and be able to implement to contribute positively to the growth of their organization.
What are business acumen skills?
These are skills a business person possesses to make quick and effective decisions in solving crises or challenges to lead to the growth of their organization.
Is Business acumen a soft skill?
Yes, it’s considered a soft skill because it is said to be a collection of technical skills, knowledge, and other soft skills which are very useful in impacting an organization and its employees positively.
What are the key indicators of business acumen?
The key indicators of business acumen are the abilities one needs to be able to plan via strategic thinking and understand all aspects of a business’s operations and the way they are interconnected. Also, it includes recognizing the financial elements of a business and being able to make the right decisions needed to scheme a business through the appropriate strategy.
What is business acumen in leadership?
This is when a leader has the skills and ability to make a business successful. The leader utilizes these skills to develop and increase the company’s outcome and income.
To build up business acumen skills takes time, you will have to learn and plan it all out. But as soon as you have acquired these skills, you can begin to apply your knowledge to your business or your job. As time passes, you would be recognized and admired for having such skills you learned.
You will be able to carry out tasks easily, solve problems and make decisions without spending much time contemplating. Your employer and employees (if you’re the employer) would find your skills helpful in the growth and development of the organization.
- www.chris-elgood.com – Business Acumen Definition: Who Needs It And Why
- roberthalf.com – What Business Acumen Skills You Need (With Examples)
- insperity.com – Mentor Matching: How to Match Mentees with the Right Mentor
- fool.com – A Guide To Developing Strong Business Acumen
- business-acumen.com – Why Does Business Acumen Matter?
- trainingindustry.com – Business Acumen: 7 Steps To Becoming An L&D All-Star