Business acumen has become a familiar and recurring competency in many leadership curriculums throughout various organizations. Why? Because according to Forbes, understanding finances, cash flow, budget projections, profit and loss, etc. is essential to understanding the overall health of your business. You do not have to be an accountant or have a finance degree to learn business acumen - It is a skill that can be acquired and applied to many aspects that will benefit an organization.
Here are five ways you can capitalize on the power of business acumen:
- Empower your employees: According to the World Bank, empowerment is the process of increasing people’s capacity to make choices and transform those choices into actions and desired results. Give your employees the opportunity to build their confidence, develop their skills, and grow within their roles. Knowing how your organization makes money as well as understanding key financial terms, metrics, and the health of the business will ignite a new level of thinking and drive employees to begin asking more informed questions.
- Create more effective town halls: According to SHRM, these meetings can lead to greater employee understanding of key business issues and increase employee feedback up the hierarchical ladder. However, do you feel that your employees are actively engaged, or are they passively listening to their CEO discuss business strategies and goals? Town halls are meant to facilitate bottom-up communication and only effectively work when there is a dialogue versus a monologue (Woodward, 2006). Employees may be intimidated or lack the confidence needed to speak up. This is where business acumen empowerment becomes the key to realizing the full potential and benefits of a company town hall.
- Align goals and strategies: The Project Management Institute states that strategy gives a shared vision for the organization, serving more like a North Star. It guides activities and decision-making based on a standard set of assumptions. Employees need to understand their business strategies, but more importantly, they need to understand which levers they need to pull to execute their goals. Strategies require the implementation of actions, and the wrong actions can create adverse outcomes.
- Make better decisions: According to Peter Drucker, influential executives do not make a great many decisions. They concentrate on what is essential - they try to find the constants in a situation, to think through what is strategic and generic rather than “solve problems.” Decision-making occurs at every level of a business, and everyday employees are challenged with how they should implement their actions. Employees can only make the best decisions with the information they have available. Do you know if your employees utilize the right and most relevant data to conduct an analysis in day-to-day decision-making? Employees that understand the strategy and consider the most relevant data will make better-informed decisions.
- Develop personal action plans: Employees’ choices and actions are an opportunity to enhance their work environment and maximize their overall performance. McKinsey & Company states that continuous improvement is an ongoing effort to improve all elements of an organization – processes, tools, products, services, etc. Big or small, it is most essential that improvements are frequent. Business acumen gives individuals the power to innately identify areas for improvement, greater efficiencies, and the right levers to pull. A network of recurring individual action plans combines to yield more significant results for the organization.
These five ways to use business acumen are just the beginning. Business acumen sets the foundation for future leaders and is a wonderful way to build upon an organization’s succession planning. By empowering your employees, you are giving them the confidence to develop the mindset of a CEO. Allow them to share their voice, ideas, and strategies... and in turn, begin watching your organization grow.
Ready to start planning your business acumen initiatives? Our Zodiak platform can help you harness business acumen in a variety of modalities. We offer in-person or virtual (synchronous or asynchronous) solutions.