Industry Insights

3 Secrets to Achieving Business Acumen

Posted by Slavina Pancheva on Feb 26, 2018 2:46:21 PM

What do effective leaders at high-performing companies, such as Amazon, Samsung and Apple have in common? Customers rave about their offerings, competitors endlessly try to emulate them, and their profits are sky-high. To be sure, these leaders have tremendous skills in creating visionary products, attracting and retaining top talent, and forging strong partnerships. None of them, however, would be in their current place without solid business acumen.

Understanding the interconnected internal and external dynamics that drive financial success, as well as the ability to formulate and execute clever strategies, has been vital for these companies’ success and, crucially, for their profitability.

What is business acumen?

If business acumen is so important, what exactly is it, and how can we get more of it? The first thing to bear in mind is that business acumen is essentially an umbrella term for a set of distinct but interlinked skills.

Business acumen is financial skills

Firstly, financial acumen is key. It is not just the CFO who needs to have a clear understanding of what drives an organization’s cash flow and profits. From frontline managers all the way up to the CEO, a good understanding of how the company makes its money will allow employees at every level to make decisions designed not only to bring value to the customer, but also to ensure a healthy return for the organization. At the leadership level, solid financial skills are necessary in order to effectively manage portfolios, optimally allocate scarce resources, and set result-driven strategies.

Business acumen is knowing your market

As well as understanding the internal dynamics of what drives performance, business acumen entails a thorough understanding of the market and other external factors. Knowing one’s customers and how to create value for them is essential. Business savvy managers must also develop an unbiased and clear understanding of competitive offerings and the ways in which they differ to their own. However, in the VUCA (Volatile, Uncertain, Complex and Ambiguous) world in which many organizations operate today, customer and competitor insights may not be enough. Leaders must also be able to effectively analyse wider social, political and economic trends and disruptions and act decisively to secure their organization’s success.

Business acumen is a connecting strategy

The final core aspect of business acumen relates to strategy. Business savvy managers need to step away from narrow functional silos to focus on a big picture view of their organization. Understanding the complex interrelations and mutual dependence of different functions or business units is vital in developing a clear, decisive and result-driven strategy. Connecting that strategy to tactical execution is, of course, the final prerequisite for developing excellent business acumen.

Creating business acumen within your organization

Fortunately, this vital competency is something that can be learned. One of the most effective ways to create strong business acumen among a cadre of managers is through experiential learning. Business simulations, such as those offered by StratX, are an ideal way to develop this skill in a true-to-market yet risk-free environment.

To learn more about the benefits of using experiential learning to develop business acumen, download our free Experiential Learning User’s Guide today.


Topics: Leadership Development, Business Acumen, Commercial Capabilities

More Insights

Why Now is The Time to Use Blue Ocean Strategy

The COVID-19 crisis has deeply shaken organizations around the...

Learn More

Experiential Learning: Everything You Need To Know

The following blog serves as a guide on everything you need to...

Learn More

What is the Blue Ocean Strategy?

How to Create Uncontested Market Space and Make Competition...

Learn More

People’s Stories Around the Globe on Learning from Home

With the outbreak of COVID-19, we are living in unprecedented...

Learn More

The Virtual Mindset Infographic: Top 10 Skills for Working Remotely

In the current COVID-19 crisis, remote working has moved from...

Learn More

A 5-Step Plan to Improving Diversity & Inclusion in the Workplace

Not only is improving diversity and inclusion in the workplace...

Learn More

Leave a Comment