Why is Business Acumen Important?
Two-Step Process:
The balance between functional excellence and business acumen is a simple two-step process: obtain knowledge and use it. Business acumen is the awareness of gaps between processes and systems and then knowing which direction to pivot in order to make intelligent decisions based on the circumstance. Functional excellence is implementing recognition and knowledge into production. You can’t run a successful business without both in sync. Essentially, to know and not to do is not to know.
5 Ways to Resolve an Issue:
Think of an assembly line in a factory. If we’re creating a product with 10 different people, each with their own unique function, how could they make the process better? How could they resolve issues in their strategy?
Recognize a problem.
A leader to take on the issue.
Brainstorming a strategy to fix the problem.
Open and frequent communication to execute the strategy.
Effectively implement the new strategy.
It takes very precise communication and individuals who can see beyond their role to collaborate and implement change. Recognition, communication, and execution are at the core of change. And business acumen gives you the skills to acknowledge a problem and speak the language of your business.
Learn to Speak the Language of Business Acumen:
The London business school describes business acumen as, "the ability to make judgments and quick decisions...keenness and depth of perception. What it is not is simply teaching executives to understand finance and strategy."
We see business acumen as the key ingredient to reach functional excellence. It's more than understanding finances and the strategies within a business — though that is critical. It's, as an example, having the courage to explore options and collaborate with stakeholders. We see it as both business and financial literacy along with a vision for functional change.
Test your Business Acumen with this 10 Question Quiz:
How to Balance both?
The most successful businesses in the market today have both skill sets. Without them, they would lose sight of the internal business metrics, or they would lose authentic relationships with their customers. Boeing, an extremely well-known aerospace technology company, implements both strategies within the core of its operations. The president of Boeing stated, “Seamless integration of businesses and functions provides competitive leverage, ensures compliance, and delivers productivity."
The goal is to always be better tomorrow than we were today. To do this, both functional excellence and business acumen are vital.
Building Business Acumen on your Teams:
One of the primary questions we're asked is how managers can help to build business acumen for their team members - and the answer is more simple than you may think!
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