“Business acumen”: It’s a term that every professional knows and likely even uses from time to time, but one that has a tendency to get thrown around rather loosely, without a precisely articulated definition. Business schools may promise to develop business acumen and hiring managers may list it as a required or desired skill in job postings, but what are they really offering or asking for?
Read on to learn about the core elements that comprise business acumen, some tips for how to develop it, and some of the positive outcomes that can leaders with real business acumen can produce for their teams and organizations.
Deep and Broad Business Knowledge
If the definition of the word “acumen,” according to Merriam-Webster, is “keenness and depth of perception, discernment, or discrimination, especially in practical matters,”1 then it must start from a place of knowledge. Acute perception relies on a solid basis of information about what exactly you are looking at and what you hope to see. In a business setting, this means foundational training in core competencies like finance, accounting, supply chain management, and, increasingly, analytics technologies.
The most direct way in which to acquire the knowledge component of business acumen is through a graduate-level business education. MBA programs have long been valued across industries as signifiers that job candidates have spent considerable time devoted to mastering broad business knowledge, and more recently, business analytics master’s degrees have emerged to build and signal specific strength in contemporary business applications of complex data.
And remember, leaders with the sharpest business acumen won’t merely be experts in one of these areas. They will demonstrate a broad record of mastery across all business domains so that they can strategize from a position of knowledge in any scenario that may arise.2
Understand Your Organization’s Goals and Functions
While business acumen may begin with knowledge and competency, it does not end there. Effective strategy is dependent on specifics unique to individual business organizations. Leaders with true business acumen should know what each group and department within their company contributes to its overall mission.3 They should be able to assess what outcomes count as successes and failures for individual groups, what metrics to assess them by and what standards to hold them to, and what kinds of cross-functional collaboration influence their performance.
Because of its contextual nature, this facet of business acumen is particularly tough to acquire in the classroom. Experience on the job is the best way to learn your own team’s and organization’s dynamics and is the most direct way to develop a sense of how to quickly and effectively assess the idiosyncrasies of any new organization you may move to as your career progresses.
Business education can prepare you with soft skills that can make this learning curve less steep, however: If you have a strong foundation in business communication, you will be able to easily and efficiently build strong relationships and amass the off-the-record knowledge of an organization’s inner workings to support your business acumen.
Know the Competitive Environment
Once you have mastered the ins and outs of your own organization, you must learn to look outside it. A more robust kind of business acumen involves the ability to perceptively survey and assess the competitive environment in which your company operates and orient your strategic decisions proactively to position yourself to succeed.
In contemporary business organizations, this sort of market perspective4 often relies on technology-driven solutions that can sift through the massive amounts of data generated in digital space to describe and predict customer behavior. One of the most valuable kinds of business acumen today is possessed by professionals who have developed not only the ability to utilize database management, programming languages like R and Python, SQL, and other analytics tools to draw conclusions, but the capacity to translate their findings and communicate them effectively as well.
Synthesize All Information
If it’s not clear already, true business acumen is not just the presence of any one of the attributes described above. It is your ability to use them all in concert with one another, to bring your full toolkit of knowledge, experience, and vision to bear on every important decision you make for your organization.5
Professionals who can utilize their business acumen to synthesize all sources of information and devise comprehensive strategies can thrive in any leadership role. Business acumen is essential for marketing executives who must assess customer data, survey the competitive marketplace, and delegate strategic tasks to the creative professionals on their team. It is an asset for financial officers who must truly understand how every group within their company utilizes resources to help them more efficiently do so. And it is a crucial attribute to develop if you intend to rise to the highest levels of the c-suite, overseeing an entire organization’s direction.
Sharpen Your Business Acumen Online at Seattle University
The Albers School of Business and Economics offers two online graduate business programs to bolster your business acumen. The Online MBA prepares you to navigate any leadership challenge you may encounter, and the Online MS in Business Analytics prepares you to be a fluent data translator who can drive analytics-supported strategy. Learn more today about our thriving alumni network, which spans across the hottest companies in and beyond the Pacific Northwest.
1. Retrieved on June 27, 2019, from merriam-webster.com/dictionary/acumen
2. Retrieved on June 27, 2019, from smallbusiness.chron.com/strong-general-business-acumen-21849.html
3. Retrieved on June 27, 2019, from shrm.org/resourcesandtools/hr-topics/organizational-and-employee-development/pages/business-acumen-more-than-business-knowledge.aspx
4. Retrieved on June 27, 2019, from meridithelliottpowell.com/building-business-acumen/
5. Retrieved on June 27, 2019, from blog.hubspot.com/sales/business-acumen-key-to-sales-success