Enhancing Business Acumen – The Five Essentials
In order to run an effective, dynamic, and successful organization, leaders must possess sound business acumen. Unfortunately, we are not born with this vital leadership skill, it is cultivated over time. When asked to define business acumen, the response of senior leadership is basic and straight forward. Most believe that business acumen means having financially savvy; but that my friend is only one element of business acumen.
There are five essential components that make up sound business acumen: Intelligence, Strategy, Communication, Innovation, and Accountability. As you review the qualities of each, assess yourself as well as other leaders on your team to see where strengths and weaknesses exist within your organization. Then start on an action plan to close those identified gaps and drive organizational success to the next level.
#1 – INTELLIGENCE: Yes, leaders possessing this component of business acumen are skilled at creating, reading, and analyzing financial reports and budgets. However, they are also at ease when it comes to explaining this sometimes complex information to others. This is a quality that most senior leaders admire and think of when they envision someone with great business acumen. Along with financial savvy, leaders possessing this component of business acumen have an immense hunger to learn more and increase their knowledge and intellect. They not only read business books, magazines and white papers to gain knowledge, but also to glean skills and techniques that can be applied in their line of business and daily work.
#2 – STRATEGY: Leaders possessing this component of business acumen know the key priorities (business objectives) of the organization, and have proactively formulated a written action plan to get the team there. They don’t wait for the strategic plan to come down the pike from corporate, as soon as they get wind of the key business objectives they begin focusing on how their team will contribute to and impact it. Again, having business intelligence is not enough, leaders must also be able to turn all that wealth knowledge into actionable behaviors that will engage an entire workforce or team and drive positive results.
#3 – COMMUNICATION: Leaders possessing this component of business acumen are excellent communicators, both verbally and in writing. They know that simple, clear communication is the key to achievement of the key business priorities and strategy. If you ever observe leaders with great communication skills, you will notice that they communicate clearly up and down the organizational ladder. They can get a point across with finesse at the executive level, and simplify the message with ease to relate it to the day-to-day activities of line staff.
#4 – INNOVATION & RESOURCEFULNESS: Leaders possessing this component of business acumen have the keen ability to work with little, and produce much. They are not limited by a lack of resources, but innovative enough to create new ways of getting the job done effectively and efficiently. While having all of the tools at their disposal to do the job properly would be great, they do not allow the lack thereof to create team dissension or negativity. Their greatest joy comes from being able to overcome barriers and obstacles to create a product or service that is exceptionally better than they ever expected. Leaders who possess sound business acumen are not wasteful, but innovative and resourceful.
#5 – ACCOUNTABILITY: Leaders possessing this final component of business acumen understand the importance of employee accountability in optimizing productivity to achieve success. Without accountability none of the other components that make up sound business acumen (intelligence, strategy, communication and innovation) will be of any worth. In order to hold employees accountable for driving the key priorities of the organization the leader must set the standard or expectation, communicate it to enlist employee buy-in, integrate it into every aspect of the work environment, evaluate employee performance against it, then reward and recognize those who consistently meet and exceed the expectation or standard.
Just like a waterfall, business acumen starts at the top and trickles down throughout the entire workforce. If senior leadership does not possess these essential components, organizational effectiveness and success is not sustainable. Now that you’ve been equipped with some level of clarity concerning business acumen, the next step is to work toward closing your professional gaps. Bottom-line, developing sound business acumen does not start or stop with becoming skilled at analyzing financial reports; developing sound business acumen is multi-dimensional.