I have been interviewing executives at Fortune 500 firms for an upcoming project and discovered a theme in their comments. Reaching the executive and management level requires business acumen. Developing this skillset is often challenging for technical specialists, developers, engineers and other professionals who take pride in their work. Growing your career fundamentally requires business acumen. In this article, I will define business acumen skills and explain how to develop it.
What Is Business Acumen?
There are several definitions of this term that are worth exploring. The definitions I found in researching this article combine knowledge, skills and experience. Let’s get started with the definitions.
- Financial Times Lexicon: “Business acumen is keenness and speed in understanding and deciding on a business situation. In practice, people with business acumen are thought of as having business ‘sense’ or business ‘smarts’. They are able to obtain essential information about a situation, focus on the key objectives, recognise the relevant options available for a solution, select an appropriate course of action and set in motion an implementation plan to get the job done.”
- Chron.com: “In a company, a manager seen as having general business acumen is one who consistently exercises sound judgment — the results of his decisions are most often favorable. Those he works with would say he has a quick mind that can assimilate information from many different sources and come up with sound strategic alternatives. He also has the quality of insight — being able to envision what the company should do now to bring about a more profitable, successful future.”
- Kevin R. Cope’s Definition. “An individual who possesses business acumen views the business with an “executive mentality” – they understand how the moving parts of a company work together to make it successful and how financial metrics like profit margin, cash flow, and stock price reflect how well each of those moving parts is doing its job”
As the above definitions make clear, business acumen is a large topic. There is a great deal to consider. In the steps below, I will focus on two aspects of the proficiency: understanding how the different parts of the company work and obtaining essential business information about a situation. In the future, I may return to this topic and explore other aspects of it. Cope’s definition looks at the importance of financial metrics and that could be a fruitful area to consider.
3 Strategies To Develop Business Acumen
To develop your business acumen further, use these strategies. For faster results, use more than one strategy each week.
1. Ask The Customer What They Want
Management expert Peter Drucker famously remarked, “the purpose of business is to create a customer.” After you have that customer, the question becomes how do you keep them happy (and referring more customers)? If you are working different with the organization’s end customers, you can directly ask about their problems or use surveys.
If you are one or more steps removed from customers, pose a similar question to your stakeholders. For example, if your project is to implement new software for a contact centre, you may ask to sit in a few calls or even answer some calls yourself. Such direct exposure will help you to build credibility and business acumen.
Customer Service & Knowledge Resources To Build Your Acumen
- Delivering Happiness: A Path to Profits, Passion, and Purpose by Tony Hsieh. Zappos is widely admired for outstanding customer service. I have been curious to read this book for some time.
- How to Win Friends and Influence People by Dale Carnegie. A classic business book that continues to be popular. It is often recommended to people in sales and marketing. If you are looking to connect with people better, this is a good book for you. I suspect that millions of copies of the book are in print so you can easily find a copy.
- 10 Heartwarming Customer Service Stories by Gregory Ciotti. Customer service is alive in well! If you want to be inspired to go beyond the call of duty, this article will give you ideas.
2. Expand Your Horizons With New Assignments
Earlier this year, I explained the push the boundaries strategy. It is an excellent way to add new reponsibilities and learning to your existing role. In some cases, that strategy may not be a good fit. For example, if you are in a technical, engineering or back office role, you may want to increase your exposure to the customer. Without a customer, the business will not exist for very long. Fortunately, there are several ways you can build business acumen by taking on new assignments.
- Company Committees. Serving on a company is a great way to build additional skills and grow your connections with others in the organization. In 2015, I served on an employee engagement committee and found it to be a valuable experience. It is important to focus on quality contribution, so look for a single committee where you can make a significant contribution.
- Company Events. Helping to organize and run a company event is a good way to take on a new assignment. In addition, events have clear deadlines so they can be easier to add. When you start to work on an event, you may be asked to take on a variety of tasks from setting up tables to organizing guests. Volunteering to serve at the registration desk is a great move because it means you can welcome each attendee.
- Job Shadowing. From a distance, you may be interested in a new job or moving to a different department. You might want to move into marketing because you see all the parties and launch events they run. Before you leap to a new role, consider job shadowing as a way to build your business acumen. In this role, you accompany someone in a different job and learn what they do. A project manager might go into the field with a technician or sales professional for the day: such an experience would help to build understanding and credibility at a much deeper level.
3. Read The Business Press
Improving your business acument requires additional knowledge. Reading the business press and media yields several benefits. You will learn more about the ways companies in different industries are evaluated (e.g. performance in retail companies often uses the sales at stores open at least a year metric whereas telecom companies often use average revenue per user metric). In addition, you will learn about leaders in the business world (e.g. I often enjoy reading biographical articles such as The Lunch series in the Globe & Mail).
To get started in reading the business press, choose at least two publications: a national publication and an industry specific publication.
Question & Action:
What methods have you used to develop your business acumen in the past year?