In the finance industry, it’s easy to think that you’ve already got business acumen. You’re well trained on the financials, you know what all the numbers mean, and how to calculate them. However, over the past 20 years, we’ve found that’s not always true. While understanding the financials is a large part of business acumen, it’s not the complete picture - and just because a person can create or calculate financials, doesn’t always mean they understand where the numbers are coming from, or the impact they may have on the organization.
For financial professionals, business acumen is essential for success... not only within your organization but also for your career as a whole. The good news is that you’ve already got a big head start with your understanding of the financial portion. So, you just need to focus on developing a complete understanding of the strategy and skill. With business acumen, you work to understand the WHOLE business, not just the numbers part of it. Then you’ll develop the skills you need to effectively communicate findings and plans with colleagues and clients. Essentially, you’re learning to speak the language of business.
By having these skills and an in-depth understanding of how the entire business works (not just your department), how the company makes money, and how different decisions will impact the overall business - you, and every individual within an organization can, and should, make decisions as if you were the owner of your business.
So...why is this important for financial professionals?
Well, for starters, it’s impossible to make strong and effective business decisions if you’re making it from within the silo of your team. You need to understand the entire business in order to make the best decisions.
I think most financial professionals are also looking to ensure career progression and setting themselves up to take that next step within their organization - becoming a CFO or someone that leaders turn to for guidance in future planning and decision making. To become that individual, financial professionals will need to really focus on understanding strategy and skill, as well as how to effectively deliver findings to others. Some of the main things you learn with business acumen!
The ability to dig deeper into the financials to understand not only where the business is falling behind, but also work to assist in determining why it’s falling short, and make intelligent recommendations on how to turn things around. They can also call out areas that are succeeding, and put a plan in place to grow that success.
These are just three reasons why business acumen is essential to have as a financial professional - but there are so many more! Ensure you continue your career growth, and set your team up for success by investing in and improving your business acumen. Check out the video below for Acumen Learning's President, Ben Cook's thoughts on why business acumen is essential for financial professionals.