Choosing the right type of learning experience can make all the difference.
As we’ve worked with clients over the years, we’ve seen that when managers and other key leaders do not have strong business acumen knowledge and skills, their day-to-day financial and operational decision-making is not linked closely enough to organizational strategies and priorities.
Business acumen, although considered an essential managerial competency in most organizations today, is often not understood well enough to ensure that the best leadership development approach is selected and implemented by HR professionals.
Business acumen is not just about financial understanding, although that’s an essential piece of the puzzle. Financial terms, metrics, and concepts need to be understood by leaders consistently so that a common language and shared perspective help them work together.
Business acumen also implies a deep grasp of the financial impact of strategic decisions and actions at all levels of the organization. Only when that critical link between the “numbers” and the “story behind the numbers” is clear to leaders can they be expected to correlate their own decisions and actions to higher-level business imperatives.
Providing training around financial terms and metrics isn’t enough, although we’ve seen some companies “check the box” on business acumen training after providing a numbers-oriented development program.
Helping to prove that point, many graduates of college accounting courses tell us that they can explain the “line items” on financial statements, but they have a much harder time articulating what companies can do to actually impact the numbers on those lines.
Although more challenging to achieve, business acumen training must clearly show the link between strategies and decisions and financial success as captured on financial statements.
In our 25+ years of providing business acumen development programs to the corporate marketplace, we have found that a robust business simulation in which teams of learners work together to run a company, make decisions related to strategic imperatives, analyze results, and construct financial statements is the best holistic way to provide the big picture understanding of the “business of the business.”
The Bottom Line: Whether delivered in a classroom or virtual setting, a well-designed business simulation is the best approach for the development of business acumen.
Discover ways you can implement and build business acumen in your organization here!