Every business needs leaders at all levels who are able to hold the different strings together and make decisions for the benefit of the whole organisation. These people are often referred as having strong business acumen.
But what is business acumen about and how can you develop it?
In this guide, we’ll explore business acumen and the benefits of developing it. We’ll also provide tips on how to start developing strong business acumen to advance your career and enhance your ability to lead.
THE BENEFITS OF STRONG BUSINESS ACUMEN
The above might sound interesting, but you might be wondering if business acumen is something you should focus on in your own career. The short answer is ‘yes’, as you can benefit from better business acumen whether you are an entrepreneur, a CEO or a team manager.
Strong business acumen will, of course, help you advance your career further. Any major leadership role often requires the ability to see the ‘big picture’ – without it, you can’t lead the troops to victory. You must be able to relate smaller elements together and hold all the different strings together.
It’s also beneficial for entrepreneurs because it boosts your ability to start a business. If you examine the key abilities of a person with business acumen, you are essentially describing the building blocks of developing a good business plan. Additionally, as a start-up entrepreneur won’t have helping hands everywhere at the start of the business, but you must be able to know about product development, marketing, accounting and so on. You need an overall sense of running a business to make it work; in short, you need business acumen.
But the benefits aren’t just for improving your career or for people launching their own business. A business will benefit from having a workforce with business acumen. This is due to the following reasons:
· People with business acumen can be more efficient in their work, as they notice the connections within the workplace and the way different contributions affect the different elements.
· You’ll also be able to understand the different trade-offs of actions, which can help make better and more logical decisions.
· Business acumen can help provide a more co-ordinated and logical responses to problems and threats the business might have. Because it teaches quick thinking, you aren’t panicked in the face of difficulties.
DEVELOPING STRONG BUSINESS ACUMEN THROUGH FOUR KEY ELEMENTS
When it comes to developing strong business acumen, you need to focus on four distinct elements.
· Better understanding of your thought process
· Improvement in your business knowledge
· Development of your management style and gaining better understanding of different styles
· Enhancing your overall management and leadership skills
We’ll examine these below and provide tips on how you can improve your skills in all four areas.
#1 Better understanding of your thought process
Better understanding of your thought processes is key for enhancing business acumen, as it is centered so heavily on the thinking and analyzing. If you are able to understand the frameworks in which businesses operate and the different directions different decisions take, you are better at judging different steps and actions.
Improving your understanding of your own decision-making process can boost the understanding of these complex frameworks and how they relate to each other. The more you understand about your personality and ability to make decisions, the better you will become in using your strengths to your advantage.
How to improve your thought processes and your understanding of them?
First, you need to examine your own personality and thinking patterns. You should do personality tests, such as Myers Briggs and DiSC, and evaluate how you approach problem solving. For example, are you the type of person who likes to take a moment to think up a solution or do you get head on solving the problem with a trial and error method?
Once you are able to comprehend what type of person you are in the face of problems, you can use the strengths to your benefit and ensure the weaknesses don’t ruin your thinking.
Furthermore, even in the business environment, you want to start asking more questions to get a broader picture of the business. It doesn’t matter if you are the sales person or the accountant; widening your understanding of the business will help.
You essentially want to improve your knowledge on why things are done the way they are. If there’s a problem in your department, how is it dealt with? Don’t take anything you see or the decisions that are made around you for granted. Question, examine and study, and start thinking about your own solutions.
Focus your efforts on the three critical dimensions of managerial thought process:
· The context, scope and details of the specific situation. You need to be able to outline these each time you are faced with a situation and to know which parts are important going forward.
· The complexity of the situation. You should also be able to see the current and future complexities and their role in causing confusion.
· The ability to improvise. Things don’t always go according to plan and business acumen means you are able to respond to unanticipated developments without problems.
#2 Improve your business knowledge
For strong business acumen, a wider understanding of the different aspects in business is crucial. It’s not only about knowing how the specific organization operates, but also knowing more about the industry as a whole and business in general. Without a wider knowledge on these topics, you can’t come up with comprehensive solutions and strategies.
In terms of enhancing you the focus should be on a few issues:
· The layers of competing tensions within the different stakeholders in a business. Every business has these tensions, whether it’s between customers and investors or between the different customer groups.
· The business strategies, which offer competitive advantage not just in terms of creating profits or attracting customers, but also for obtaining talent and better product development.
· The importance of talent acquisition to a business. A person with strong business acumen will know success is largely based on talent and the ability to adjust as talent requirements change within the industry and business.
How to improve your business knowledge?
What are the tools and resources you should use in order to stay on top of the above points? You must utilize a few key personal development strategies.
First, you need to start reading more. You should delve into numerous business blogs, obtain good books about business and focus on following online discussion on relevant topics on social media. When finding the blogs and books, focus on the industry you are operating, the world of business in general and personal development related topics, such as leadership and management.
Below is a selection of resources you definitely want to add to your regular reading list:
· Business Insider
You should also consider enrolling in courses. You can find adult classes on your chosen topics by using keywords like “adult course in [topic] in [your location]” in Google. Furthermore, don’t forget about online courses. The edX website has plenty of free business-focused courses, as well as personal development courses to enhance your knowledge.
You naturally can also learn more about the different aspects of a business without external courses. If you are working in an organization, ask your manager for the option to cross-train. The ability to experience different departments and roles will be helpful for future understanding of how the business operates.
When you are learning about new things, use the concepts and ideas in real life situations. Think in terms of the organization you are working for and how implementation of the new ideas would work.
Thinking about these abstract concepts or strategies through real examples and existing business structures can deepen your understanding of them. If you come across concepts and ideas, you do not quite understand, make notes and conduct research later when you have time. Find the experts in the subject and don’t be afraid to ask questions from your colleagues.
For instance, if you don’t understand the concepts in finance, you can check with your organization’s finance department for tips on how to explore the topic further.
#3 Develop your management style and understanding of different styles
Business acumen also requires a good grasp of management processes and styles. These are essentially the tools, ideas and procedures, which provide the structure and framework for the management and the organization as a whole. The different styles and processes can boost business acumen by guaranteeing a more logical and consistent approach for different issues.
The idea is to enhance the understanding of the different approaches you can take in order to solve a business problem. It’s about the ability to understand processes that are behind sound management decisions and using the existing framework as a guide to improving decision-making and the overall business acumen.
How to improve your understanding of the management styles and processes?
The management processes refer to things like strategic planning, performance measurement systems and the styles of management approaches such as autocratic and permissive.
You should start your venture into these topics by reading more on the topics. Great guides for management processes and styles can be found in blogs such as:
· Leaders In Heels
· Management Blog
· Leading with Purpose
When you are examining the different processes try to think about the pros and cons in terms of your current organization. You should also think what type of organizations might be best suited for these types of processes and styles. Eventually you should start understanding which style is the most natural to you. You’ll identify the resources and approaches you like to use as a manager, which will start enhancing your business acumen.
You should also consider reading interesting historical takes on management and leadership. Books such as The Prince by Niccolo Machiavelli and The Art of War by Sun Tzu are interesting accounts of what strategies a successful leader should use.
#4 Enhance your management and leadership skills
Finally, you can develop business acumen by focusing on improving people skills. Business success doesn’t just rely on the understanding of how a business works and what are the connections of different elements within the business, it also relies on the ability to lead the people. Implementation of the right strategies is reliant on the kind of employees you are leading.
Appropriate people skills ensure you don’t harm the efficiency of the organization. Bad management has been shown to decrease productivity and increase employee dissatisfaction – strong business acumen requires the ability to empathize and understand different behaviors.
How to improve your leadership and management skills?
The best way to start exploring the topic is through books and blogs. You want to consider reading books like:
· The Effective Executive by Peter F. Drucker
· Don’t Bring It to Work by Sylvia Lafair
· The 21 Irrefutable Laws of Leadership by John C. Maxwell
In terms of blogs, you should definitely follow some of the most successful leaders and their blogs.
· Michael Hyatt
· John Maxwell
· Skip Prichard
· Wayne Dyer
· Dan Rockwell
Furthermore, you should look at the business world, whether it’s your chosen industry or something completely different, and identify the people whose leadership style you like. Follow them on social media, read their blogs and books, and learn what are the most important elements of a good business leader to them.
Don’t be afraid to talk to your own managers and ask about their approach. You can learn more by comparing and analyzing different approaches rather than just narrowly focus on a specific leadership skill.
Overall, you want to create a mentoring network around you. The network will be crucial for teaching you about different ways of looking at things and it will support you as you venture deeper into leadership and management. The plethora of ideas and strategies around you will strengthen your business acumen, since your awareness will enhance.
Remember the mentoring network can be a collection of people with varying backgrounds and statuses in the business world. You should forge strong relationships with co-workers, managers, friends and other prominent business people.
A person with strong business acumen will be able to make sound judgments and create business strategies, which lead to better business success. As the above has shown business acumen isn’t something easily acquired, but it can be taught and strengthened.
The key to acquiring strong business acumen is about learning and experience. You want to know as much about the specific organization, but also the business world in general. You need solid people skills to ensure you don’t implement strategies purely on a financial basis, for example, but also consider the impact employees have on future operations.
Developing strong business acumen will take time and the learning never stops. It’s therefore crucial to try to ensure you are using the above strategies weekly. Schedule your development and learning sessions and embrace the world of business with an inquisitive mind.