What is Business Acumen?
Business acumen refers to a person’s ability to make sound decisions across various aspects of business, including finance, strategy, ethics and operations. It’s the ability to not only have knowledge of the environment you work in but also to be able to apply that knowledge in a meaningful and productive way. To be a respected and capable leader, you must have business acumen.
Tips for developing business acumen
Developing business acumen can be incredibly useful in succeeding as a skilled leader. We’ve put together some tips to help you start, which include:
Finetuning your problem-solving skills
Ensuring financial literacy
Understanding the market
Communicating with your team
Maintaining ethical business practices
Let’s dive deeper into these.
Finetune your problem-solving skills
At times, unexpected challenges in business can rock your confidence. Being able to face these issues in a collected manner is the first step to improving your problem-solving skills. The next step is to compartmentalize the problem, starting by identifying the root cause. This proactive approach to problem-solving ensures a solution will be methodically and efficiently reached.
Once you’ve identified the crux of the issue, you should brainstorm solutions with the help and feedback of your team. This could be a solution that’s worked for you before or something entirely new and innovative.
The final step is to appropriately measure the success of your solutions and their effectiveness in ensuring problems don’t arise again.
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Ensure financial literacy
Lacking a natural aptitude for math doesn’t mean you can’t be financially literate; it just means you may have to automate some of your financial processes. Calculators and lots of useful apps exist to make things easier. There are also plenty of books and podcasts around that can help you build basic financial skills, including concepts like profit and loss, financial forecasting and return on investment (ROI). Understanding your company's revenue making process is vital for making good business decisions.
Understand the market
Monitoring trends and changes in your business landscape is crucial. This knowledge helps you make informed decisions about marketing strategies, product development and more. We recommend subscribing to a few industry-specific magazines, attending webinars and connecting with key players in your industry to keep up to date. Failing to stay in the loop will result in an inability to adapt and evolve to new opportunities.
Communicate with your team
Be transparent about plans, strategies and ideas and be willing to receive feedback from your team. Achieving effective business acumen necessitates ensuring that your entire organization is not only aware of but also understands the direction the business is taking. Providing digital coaching for your team can ensure alignment across the board. Plus, your workforce will appreciate efforts towards talent development.
Another way to improve communication is to schedule one-on-one meetings. This will help you get to know the employee's strengths and allow you to build a rapport with them. Try to keep the topics centered around growth and development and pay particular attention to their triumphs. While you can keep things casual by asking icebreaker questions, make sure to ask how they’re feeling in a professional sense – what they’re enjoying, what difficulties they’re having, and if they have any suggestions for improvement. This approach ensures a meaningful conversation that you’ll both benefit from.
Maintain ethical business practices
This may seem obvious but having a moral code as the foundation of your decisions is a great way to display business acumen. This can involve being aware of your unconscious biases and taking steps to address them and counter them. Being self-aware in this way can be a difficult thing to do but being stubborn and unwilling to learn will result in people being treated unfairly.
Once you have addressed your own learning opportunities, try to lead by example and educate your workforce on fighting against prejudice while encouraging diversity and inclusion. Introducing a corporate responsibility clause can help communicate your organization's goals and accomplishments in areas like sustainability, diversity and charitable outreach to your workforce, customers and clients. Going after certain certifications can also help substantiate your commitments.
Key questions to ask
Business acumen means asking the right questions. These questions should be tailored to your business context and you, as the leader, should be able to adequately answer each of them. Consider writing a list of questions and challenge yourself to answer each one. Here are a few examples to get you started:
What is our long-term mission as a company?
How can we continue to innovate and improve our operations?
What financial metrics are we following?
What are some emerging trends to look out for in our industry?
Who are our main competitors?
How are we promoting diversity, equity, and inclusion?
How do our business practices impact the environment?
Who is our target audience?
Good business acumen doesn’t come naturally and just because someone has impressive technical or soft skills doesn’t mean they have it! It requires ongoing learning and improvement. EZRA’s Leadership Coaching can be a great way to improve and fortify your skills, equipping you with everything necessary to thrive in an ever-changing business landscape.