Building Your Business Acumen

Tired of trying to figure out what this economy is going to do? Success today is about learning how to lead effectively in a constantly shifting, completely uncertain economy. Easier said than done, right?  To navigate these shifting economic times, you need more than just a strong business strategy and a good idea. First, you need a developed business acumen.

What is Business Acumen?

Business acumen, now there is a vague term for such a critical piece of business knowledge. What exactly is business acumen? Well, here is a simple definition: business acumen is the core understanding of how your business fundamentally works. It is the thought process and leadership skills one needs to understand the big picture, as well as the key factors behind specific situations and business decisions, and the ability to identify the proper reactions to these complex scenarios.

So, how important is having a strong business acumen? Well 65% of today’s CEOs believe that without a strong understanding of business acumen at every level of an organization, there is little to no chance of achieving strategic goals. So, I would say it is pretty important.

Now, there is a little bad news. Leaders today estimate that more than 74% of future leaders lack the business astuteness and leadership skills they need to help their organizations succeed. But, the good news is it can be learned.

So, let’s break it down. What are those core competencies of strong business acumen skills? Well here are (in my opinion) the most important.

1. Market Perspective – what is happening in your market? And, how does that impact your customers, your financial goals and your business?

2. Financial Acumen – how your business makes money.

3. Business Structure – how business is aligned to achieve financial goals. Are you positioned to take advantage of what the market is offering and customers’ needs?

While there is more to strong business sense than just  these three areas, I think they are the perfect place to start.

3 Strategies To Increase Your Business Acumen and Drive To Achieve Business Success:

1. Market Perspective

If you want to increase your business acumen skills you need to begin by looking outside in. Before you set your goals or structure your team, you need to gain a rock solid understanding of what is happening in your marketplace.

1. Questions to increase market perspective:
   1. Who is your competition and what is their market positioning?
   2. What market trends are you seeing?
   3. Who are your customers and what do they need/want?
   4. What is your market position?
   5. How do you stack up against your competition?

The better you understand the marketplace, the better decisions you will make about setting goals, products and services to offer, and roles and responsibilities of your team.

2. Financial Acumen

Knowing your numbers and the ins and outs of your company’s financial situation. You and everyone else in your business, at the very least, needs to understand how your business makes money.

1. Questions to increase financial acumen:
   1. How does your business make money?
      1. What is our revenue mix?
         • How can I control or impact this business situation?
      2. What are our expenses?
         • Which are fixed?
         • Which are variable?
         • How can I control or impact this?
      3. How does cash flow through the business?
         • When are you cash flush?
         • When are you cash challenged?
      4. What is the difference between cash flow and revenue?
      5. Lastly, the budget
         • What areas are you looking to grow?
         • What, if any, expenses need to be controlled?

3. Business Structure

With a solid understanding of what is going on in the market place, and a clear perspective on financial status and goals, you are well positioned to focus on business structure which will lead to business success.

1. Questions to increase your ability to effectively structure your business?
   1. What is the current structure? Why?
   2. What products and services do you offer?
   3. What are the performance measures of each department/area?
   4. How do they work together?
   5. What is the overall business strategy?
2. Are you using the most effective business structure to:
   1. Serve your customers
   2. Dominate your market
   3. Deliver services effectively and efficiently

In Conclusion

Working to gain a strong business acumen will give you the broad knowledge and information you need to ensure you are leading strategically. So, give it a try. What do you have to lose? Answer these questions, and with just a little effort you can increase your base of information and position yourself to succeed no matter what this economy does.

If you are still competing like everyone else, and looking for ways to succeed no matter what this economy does, then I invite you to connect with us.

Gold Certified Strategist, Meridith Powell and her team have a proven business growth coaching process that helps you understand how this economy has changed, how those changes have impacted your industry, your customers, and your employees and specifically what you need to do to succeed no matter what this economy does. Stop letting this economy drive you, and let us show you how to start driving this economy.