business acumen is built on the understanding of how money moves within an organization.
It’s defined as financial literacy or, more specifically, an understanding of the numbers on financial statements, as well as an understanding of the strategies, decisions, and actions that impact these numbers.
A person with business acumen can read a P&L statement and translate the story told by the numbers. This employee or manager would not only understand the terminology (revenue, cost of goods sold, gross margin, profit, etc.) and what the numbers represent (i.e. gross profit is how much revenue remains after cost of goods sold are deducted – and understanding what a good gross profit number would be in their industry), they would also understand what actions and decisions move those numbers.
With a solid business acumen base, individuals can interpret the effect of company strategies and initiatives on the numbers during specific periods of time. They would also use this information to form sound business strategies and to make better business decisions.
When business acumen spreads through an organization, employees and managers begin to ask better strategic questions: about improved processes, streamlined systems, efficient staffing and more.
business acumen helps everyone understand that it’s not enough to ask, “How do we cut costs?” or to say, “We need to increase sales.” Digging deeper, employees with higher levels of business acumen will ask questions that take into consideration the far-reaching impact of potential decisions and demonstrate a greater ability to make the connections between performance and results.
All organizations, within every industry, can benefit from increased financial literacy that is gained through business acumen training and simulations. Zodiak®: The Game of Business Finance and Strategy has been used to hone the business acumen skills of employees and managers across every industry. Including: