Effective business acumen training will expose learners to balance sheets, income statements, financial metrics, cash flow and the basics of overall business strategy.
Ideally, this training is done in an environment that allows individuals to learn new concepts and immediately test these new business acumen skills in a risk-free environment.
Case studies have shown that individuals who have developed strong business acumen through training games and simulations have the financial acumen and business savvy to do more than simply read financial statements.
Companies that conduct business acumen training and development stand to gain a lot, including:
- A common financial language - Beyond demonstrating a personal understanding of company terms, concepts, metrics, and goals, employees will be able to connect strategies and decisions to a common knowledge base. People are able to communicate ideas more effectively when everyone is speaking the same language.
- Strategically aligned employees - The common financial language and recently developed business acumen skills will allow individuals to align personal and department goals with the organization’s financial objectives and strategies. This alignment ensures that everyone is working to achieve the same, big-picture goals.
- A business-savvy culture - A well-informed workforce will have the business skills needed to ask informed questions about financial and strategic issues. This level of business sense can prove to be a valuable asset when brainstorming new ideas, optimizing process, products, and/or services, or when explaining the business need behind a decision or strategy.
WHAT DOES BUSINESS ACUMEN MEAN?
Depending on where you look, there are several versions of a business acumen definition. We define business acumen, in the context of learning and development, as the foundation of business knowledge that is used to make informed business decisions.
business acumen - an in-depth understanding of how a business works, how it makes money, and how strategies and decisions impact financial, operational, and sales results
financial literacy - the possession of the set of skills and knowledge that allows an individual to make informed and effective decisions with all of their financial resources
It’s generally associated with the ability to connect individual actions with organizational outcomes. All while understanding the ripple effect of each business decision and how it impacts the bottom line. Put simply, business acumen is the connection between financial literacy and business strategy.
HOW DO STRONG BUSINESS ACUMEN SKILLS IMPACT DAY-TO-DAY OPERATIONS?
The impact of a business savvy workforce is far-reaching. Beyond reading a balance sheet, understanding an income statement, or being able to define cash flow, an organization built on financial acumen is a good business strategy.
A person with strong business acumen skills will understand:
- How their business makes money
- Where they impact the profit and loss statement
- How cash moves through their organization
- Why forecasting and budgeting is crucial What percentage of revenue is profit
- How unbudgeted expenses affect profitability
Read our free ebook for a look at some real-world business acumen examples. Download eBook.
