Managers with a good sense of business acumen realize that it’s not enough for them to cut costs and increase sales. They very well understand the far-reaching effects of certain decisions taken in the present that could have a bearing on their future operations.
The staff of a company can be broadly categorized into three groups −
● Human Resource Managers (HRs)
Let’s see how important Business Acumen is for each one of them. We will start with managers.
There is a tendency with managers to think of their department as the company itself. Their approach towards their department is like that of an isolated entity which is independent of influences from other departments.
This “department only” viewing of the business leads them to think only of their job responsibilities and meeting the targets set for their department staff. While putting numbers on board is vital for the business to sustain, this narrow and restrictive thinking of managers often reflect in the body language and efficiency of the staff.
To be a successful manager, it takes a lot of correct decision-making at multiple levels, and on a daily basis. It requires an insightful understanding of processes, expenditures, preferences, customers’ changing demands, and the different projects that are in operation − both internally and with competitors. Managers at all levels need to make decisions that lead to significant organizational changes.
It’s often noticed that some managers are involved only in the development of their departments. Although these measures might yield great results in the short run, it has been observed that the staff gets dissociated from the rest of the organization and the decision-making of the manager leads his department towards improvement at the cost of other departments.
A manager who tries to do everything by himself by taking up much of the work assigned to his team might succeed in creating a perception in the minds of his staff that he can do everything. This might even lead to great output quality, as the manager is himself involved in all the different processes.
However, this approach can work only when the team is very small. When the number of people keep increasing and the process starts blooming, this do-it-yourself approach will ultimately lead to the manager taking too much work on himself and making the team feel isolated from the process.
This creates the issues of missing deadlines, the manager thinking some of the staff can be dispensed when they are all perfectly willing to do the job but haven’t been assigned any. This ultimately creates a negative wave of insecurity that spreads all across the organization.
Actions like these earn the entire company some terrible press through the bad-mouthing of those disgruntled employees who are asked to leave. This is one of the biggest fallacies in the world of managerial decision-making in recent years.
One big reason behind the managers making such mistakes is that they are generally promoted based on their technical expertise in their domain. This means that they have attained success in their domain only and have no exposure to the way the rest of the departments function. In other words, they don’t have the financial literacy and business acumen needed to have an understanding of how a small decision taken today could impact the process in the long run.
A good manager wouldn’t pass the buck with the excuse that it’s not the staff but the customer who is shouting. A good manager will understand that the shouting is disturbing the other customers who will consider this distraction as poor customer service.
A successful manager needs to be able to share the credit of success, as well as being accountable for his entire team. If the right decisions are not taken at the present, they could end up creating big challenges for the organization itself in the long run.
Corporates are now seeing an increasing number of people coming to work with their “specialist” cap on. People like these would like to be hands-on in addressing issues that cater to their expertise and would rarely venture out of their comfort zone. They don’t look beyond their horizon because the company already has a collection of experts and meddling in things that you don’t have “expertise” on could be a waste of your own time it could be easily taken care of by someone else with some expertise on the desired subject.
This approach makes sense from the viewpoint of an employee who has been tasked the responsibility of a specific work and his job is to provide optimal output. However, when the same employee performs well and gets promoted in his own domain to become a manager, he thinks of the new job as something similar to the one he had earlier, where all he had to do was to take care of only his own department and leave the rest to the specialists in his team to do.
He doesn’t feel wise to meddle with affairs beyond his job and sticks only to his job responsibilities. It makes him myopic who won’t keep himself abreast with the latest trends in the business world. As a result of which, they also won’t be able to take preemptive measures to avert unforeseen, unpleasant situations arising in the future.
Such a narrow vision can be dangerous for a manager where they tend to neglect the effect of wasting assets without extracting maximum returns from them. They won’t have a clearly-defined objective or set of responsibilities for their team members.