To run an effective, dynamic, and successful organization, leaders must possess strong business acumen. Unfortunately, we are not born with this vital leadership skill, it is cultivated over time. When asked to define business acumen, the response from top managers is basic and straightforward. Most believe that business acumen means having financial literacy; but that my friend is just an element of business acumen.
There are five essential components that make up a strong business vision: intelligence, strategy, communication, innovation, and responsibility. As you review the qualities of each, assess yourself and other leaders on your team to see where the strengths and weaknesses exist within your organization. Then start with an action plan to close those identified gaps and drive organizational success to the next level.
# 1 – INTELLIGENCE: Yes, leaders with this component of business acumen are trained to create, read, and analyze financial reports and budgets. However, they are also comfortable when it comes to explaining this sometimes complex information to others. This is a quality that most senior leaders look up to and think of when they envision someone with great business acumen. Along with financial intelligence, leaders who possess this component of business acumen have an immense hunger to learn more and increase their knowledge and intellect. They not only read business books, magazines, and white papers to gain knowledge, but also to gain skills and techniques that can be applied in their line of business and daily work.
# 2 – STRATEGY: Leaders with this component of business acumen know the organization’s key priorities (business goals) and have proactively formulated a written action plan to get the team there. They don’t wait for the company’s strategic plan to fall apart – as soon as they learn the key business goals, they start to focus on how their team will contribute and impact it. Again, having business intelligence is not enough, leaders must also be able to turn all that wealth knowledge into actionable behaviors that engage an entire workforce or team and generate positive results.
# 3 – COMMUNICATION: Leaders who possess this component of business acumen are excellent communicators, both verbally and in writing. They know that simple and clear communication is the key to achieving key business priorities and strategy. If you ever observe leaders with great communication skills, you will notice that they communicate clearly up and down the organizational ladder. They can delicately convey a point at the executive level and easily simplify the message to relate to the daily activities of line personnel.
# 4 – INNOVATION AND RESOURCES: Leaders with this component of business acumen have the great ability to work with little and produce a lot. They are not limited by a lack of resources, but are innovative enough to create new ways of doing work effectively and efficiently. While it would be great to have all the tools at your disposal to get the job done right, they don’t allow the lack of them to create discord or negativity in the team. Their greatest joy comes from being able to overcome barriers and obstacles to create a product or service that is exceptionally better than they bargained for. Leaders with strong business acumen are not wasteful, but innovative and resourceful.
# 5 – LIABILITY: Leaders with this final component of business acumen understand the importance of employee responsibility in optimizing productivity for success. Without accountability, none of the other components that make up a strong business vision – intelligence, strategy, communication, and innovation – will be of any value. In order to hold employees accountable for driving the organization’s key priorities, the leader must set the standard or expectation, communicate it to gain employee buy-in, integrate it into all aspects of the work environment, evaluate the performance of employees and then reward you. and recognize those who consistently meet and exceed expectations or standards.
Like a waterfall, business acumen starts at the top and seeps through the entire workforce. If senior leadership does not have these essential components, the effectiveness and success of the organization are not sustainable. Now that you have a certain level of clarity regarding business acumen, the next step is to work towards closing your career gaps. In short, developing strong business acumen doesn’t start or stop with the ability to analyze financial reports; Developing a strong business vision is multi-dimensional.
