Business acumen is one of those terms that, if you ask five people what it is, you’ll get five different answers. Merriam-Webster defines acumen as “the ability to think clearly and make good decisions.” In practice, it means knowing how the company operates and using that knowledge to improve performance. For example, business acumen helps CEOs make strategic decisions about the future growth of their companies. It assists managers in running their departments more effectively. And it allows salespeople to recognize and understand their customers’ values and the challenges they face. For some, developing business acumen is intuitive, while others need to work on acquiring it. Here’s how:
1. Read. Reading trade publications, organizational marketing pieces and corporate communications provides background and information about the industry, the company and emerging trends. This knowledge is crucial for understanding problems affecting both the organization and its clients and can lead to uncovering innovative solutions.
2. Learn. Engage in continuing education. Enroll in business or university education courses. Participate in seminars and webinars. Join industry professional associations and attend their meetings and conferences. Get involved with related social media groups on LinkedIn, Google+ and other sites to network and share information. Ask if any opportunities for further education are available through your company or other business memberships. Also, talk to co-workers in other departments of the company to learn more about their areas of expertise.
3. Practice. Seek out business opportunities to increase the development of business acumen. Simulated experiences enable individuals to apply the knowledge gained through reading and education in a controlled environment. In this setting, employees participate in a business strategy game where they make decisions on how their companies are run. At the conclusion of the simulation, they receive feedback on how to improve their decision-making skills, thus increasing their business acumen.
Business acumen means knowing how the company operates and using that knowledge to improve performance
Acquiring business acumen is not a one-shot event. It involves education, training, practice and hands-on application. It is well worth the effort though when the results produce improved strategic and leadership skills, which shape a brighter future for individuals and their companies.