Business acumen is a concept generally defined as the ability to quickly size up a situation, understand how it can play out, and come up with effective strategies to deal with it. It involves using common sense and the information available on hand to make decisions that are in your best interests.
Business acumen is the ability to make good decisions that are in line with a company’s goals and objectives. Business acumen also includes understanding how a company’s activities impact the economy as a whole, competition in the industry sector, and other companies (both friends and foes). You can also think of it as the opposite of “business naiveté”.
Not only does business acumen help you make good decisions at work, but also in your personal life. Whether it is buying stocks or a home, acting with business acumen means understanding how these big choices will impact your finances. It can also be useful when navigating office politics – knowing how to make the right choices when it comes to team-building, for example.
Is business acumen a soft skill?
In some sense, it is. It involves identifying opportunities as well as threats, balancing risks against rewards, understanding human behaviour patterns and keeping an eye on long-term goals. In other words, one needs good management skills to be successful.
Why is business acumen important?
Business acumen is a quality that can make or break one’s career, because it helps you take quick decisions that will positively impact your professional goals. The ability to size up situations and apply your knowledge quickly means you are always ready for any eventuality, and can adapt your career path accordingly. With business acumen, you can easily make successful moves to career advancement or negotiating a better offer with an employer.
How do I develop business acumen?
There are several ways to develop business acumen, such as: reading up on issues related to your industry; developing people management skills; keeping up with changes in technology; and staying abreast of global political and economic issues. And the best part is, there are courses available online to help you hone your business acumen skills.
The first step towards developing business acumen is to get involved in a company. Whether it’s a summer internship at an established corporation or a part-time job at your school’s student association, the experience you gain will be very helpful when you start your career. When you’re involved with day-to-day operations of the company, you’ll be able to see and grasp the bigger picture of what your employer is trying to achieve with its business.
Also, you can gain experience by reading up on issues related to your industry. This will help you become conversant in topics that are relevant to your work and give you a better understanding of how it all fits together. You don’t have to be an expert, but the more you know about your industry and what affects it, the better you’ll understand how to succeed at work.
A good way of getting involved with your company is to take on some people management responsibilities. This will help you see the big picture – how a small part relates to the whole organization. And, as you are managing people, you’ll have to solve problems and make decisions. So not only will you be developing your business acumen skills, but also honing those that will help you move up the corporate ladder.
Technology is ever changing so staying abreast of developments in this area can really help boost your career. As technology changes, so do industry demands and business opportunities. You can gain knowledge of new technologies by reading up on them or watching tutorials online.
How can business acumen be measured?
Business acumen, like any other skill that has a significant impact on one’s career, can be measured by using, for example, psychometric tests. With the increasing need to hire employees that are multi-dimensional and can adapt quickly to changes in their environment, such tools have become important to help employers make the right hiring decisions.
What are some good books on this subject?
There are several books that attempt to provide guidance for those looking to develop business acumen. Some books focus on improving one’s professional skills, while some discuss ways to understand the business world around you. Following are a few good reads on this subject:
Business Acumen: The Savvy Professional’s Guide, by Luke Hohmann;
Biz Smarts: Essential Business Advice from 150 Top Professionals, by Howard Love;
The Essays of Warren Buffett: Lessons for Corporate America, Lawrence A. Cunningham (Editor);
How to Think Like a CEO and Deal with Whatever Life Throws at You, by Ram Charan.