Whether you are a business owner or manager drafting a business plan, you must possess strong business acumen. It’s the ability to be keen and quick in understanding and dealing with business situations that will lead to a good outcome. Some may call it business savviness or business sense. But before you execute on any business plan, be sure your leaders possess the elements of business acumen.
Elements of Business Acumen
There are three key elements to cultivating good business acumen: understanding big picture planning, understanding financial levers to your business, and understanding the importance of ethics in long-term business success.How can leaders with high business acumen make the right decisions under such uncertainty and risks?
1. Big Picture Business Planning
Leaders with business acumen must find growth opportunities and understand the big picture, despite failures. Take into account the business leadership examples a few famous leaders that failed but focused on the big picture to seize the right opportunities.
- Vera Wang, famous fashion designer most known for her high-end wedding gowns, failed as a U.S. Olympic Figure skater. Wang then moved on to work for Vogue as an editor but opted to become a designer. Imagine if she were sitting behind the scenes rather than creating? What a loss that would have been to brides, wedding couture, and the fashion industry!
- Milton Hershey is one of the most recognized names in chocolate. Hershey founded three different candy companies which all failed before starting the Lancaster Caramel Company and the Hershey Company.
- Evan Williams initially developed a podcasting platform called Odeo, but the platform didn’t take off. Yet he believed in the power of online and social media and eventually seized a huge growth opportunity by co-founding Twitter.
These leaders had the expertise to push forward and seize growth opportunities, despite failing big. Many times this the business strategy that takes senior management from good to excellent.
2. Understanding Financial Risk
Understanding the financial levers to your business is important to building business acumen. You must possess the aptitude to identify risks and place your bets on calculated risks. To position the company to greater gain, you not only need to be intuitive, but must also understand the fundamentals of the economics of the business and what the numbers are telling you. Managing key performance indicators, understanding money, realizing profit margins, and monitoring key financial statements will help increase your financial literacy.
Running a business is a complex enterprise and to look at the big picture you need to know the answers to some basic financial questions. It is not enough for your accountant to know this information. Business acumen requires you to be aware of the answers that shape the financial statements you will be able to guide your company to success.
3. Ethics and Etiquette Done Right
Many if not all successful leaders demonstrate the critical proficiencies needed to overcome the odds despite losing and gaining relationships, having financial difficulties, harboring self-doubt, and the misperception of the public eye and judgment. So how do you maintain a sufficient level of solidarity and strength? When confronted with these situations, leaders with business acumen are careful to maintain the right ethics and etiquette. Too often, we see individuals rise to the top, only to be cut down to nothing based upon their inability to maintain strong business ethics, a lack of moral character, and poor business etiquette. It is important to realize that leaders with business acumen can find a balance between personal ethics and organizational ethics to make the right decisions during tough situations.
Improving Business Acumen
If you are an entrepreneur on the verge of a new venture or a manager ready to improve your business acumen, you must acquire the uncanny ability to see the big picture, understand the risks, and maintain ethics and etiquette under complex situations. The Business Acumen for Leaders workshop will help you explore the essential keys necessary to succeed in all aspects of business. This 2 day workshop is part of a curriculum from the Center for Leadership and Development powered by New Horizons. You will learn the four P’s to ethical management and the financial levers of making sound decisions using intelligible data, as well as the importance of business etiquette and perception! Find the next scheduled course date that fits your schedule or watch this free course demo of Business Acumen for Leaders.