Can a small team compete with major corporations? Yes, if they have bucketfuls of business acumen! As small teams need to be super-efficient, encouraging business acumen can help everyone to reach their full potential on an individual and business-wide level. It gives the business the potential to make waves even as a small fish in a big pond.
As well as having a team full of specialists in their area of expertise, nurture business acumen—this is an understanding of the wider business—so your team is making decisions that prioritize what is best for the business as a whole.
With a united focus on making a positive impact in the business, you’ll foster growth even in today’s competitive business landscape and even as a small business. Business acumen is a highly valuable asset and here’s why.
What is business acumen?
It’s like being business savvy or having business sense. Business acumen means having the skills, experience, knowledge, and competency to make good business decisions. This isn’t reserved for the C-suite. It’s beneficial for people in various roles to be able to see the big picture and work according to a united business strategy, taking into account company goals, finances, and potential issues with emotional intelligence.
If someone has good business acumen, their skillset extends beyond their specific role, department, and expertise to wider business knowledge and understanding. While some pick it up more naturally than others, it is a learned skill that you can nurture in yourself and your team.
Why Is Business Acumen Important
More than just being a fancy-sounding buzzword, strong business acumen has a direct impact on the success and profitability of a business in these 3 key areas.
- Improved understanding and communication: Poor communication is an easy trap for employees to fall into. They have a great understanding of their department and role but struggle to connect the dots with other departments. For the whole business to take united action, the team needs to be speaking each other’s language. As business acumen relies on wider business knowledge, it gives employees the competency to communicate across departments and work together.
- Aligned decisions: This will lead to better decision-making across the business as team members better understand the business situation and other factors they need to keep in mind. Instead of hyper-focusing on their area of genius, they are aware of the big picture and what their actions mean for overall business success.
- Higher profitability: With improved understanding, communication, and decision-making, the business will become more profitable. When the internal team works more efficiently and is focused on the company goals, external outcomes will improve. High-level performance leads to more sales from new and old customers and better profits.
These benefits accumulate to create a strong team that has the skills and knowledge to drive the business forward.
Developing Business Acumen
Building business acumen requires intentional effort and the opportunity to learn new concepts and develop new skills. Here are some ways to support this development.
Understand the business model.
This is a great place to start when it comes to getting your head around the bigger picture. Learn how the business operates from the supply chain to the different departments at headquarters. How is the operation strategized for growth? By understanding how the whole business works, individuals can better understand their role in progressing toward success.
Seek mentorship.
As business acumen involves a wide range of knowledge and an advanced skill set, mentorship can help. It gives the individual an opportunity to ask questions, get an outside perspective and gain the confidence needed for more challenging areas like leadership skills. It’s also a development program that gives mentees the time to learn and become comfortable with their new knowledge and skills. Even better, it can be easily personalized to meet individual needs.
Enroll in relevant business courses.
Individuals that engage in business acumen training will find it easier to develop the skills and understanding involved in good business decision-making. It allows them to go in-depth into a specific area and learn from experts so they have real competency in that business issue. Business classes and training develop a depth of knowledge that will be useful when they push themselves to engage in new experiences.
Volunteer for challenging projects.
Many of the competencies involved in business acumen can be gained through the individual pushing themselves beyond their usual role and responsibilities. Volunteering for challenging projects gives them a chance to try something new, think outside of the box, and benefit from practical experience that goes hand in hand with theoretical training. It’s a great way to build confidence in a different area of business and vary understanding and experience.
Gain practical experience.
Practical experience is key to cementing concepts and skills for individuals developing business management capabilities. It gives them a chance to get comfortable with taking calculated risks – a big part of business development – and to learn how to bounce back from failure – an inevitable part of growth. Practical experience garners learning opportunities that can’t be taught on a course or program.
Cultivate analytical thinking.
It takes practice to interpret financial metrics and other data sets for decision-making. So get familiar with reading, understanding, interpreting, and making decisions according to data, making analytical thinking a habit. As well as the raw data, it’s useful to see data analysis in action so access to reports and meetings about metrics of success should be accessible to the team.
Stay up to date with business news.
A lot can be learned from what is going on in the business world. Business news can provide templates of what to do as well as examples of what not to do. Engaging in business-focused material creates a deeper understanding and a wider reference point. It also gives context to the environment the business is operating in and other factors that could impact the growth of the business which is essential to successful decision-making.
Listen to customers.
Becoming familiar with customer profiles isn’t only beneficial to marketers. Customers should be at the heart of all business decisions. So gather information about their demographics, behaviors, preferences, and motivations to get into their head and better meet their needs. Track changes over time by looking over customer data and communication. Customer-centricity is a business growth strategy many innovative businesses are adopting so it’s well worth becoming familiar with customer profiling.
Embrace leadership opportunities.
Business acumen can be just as beneficial for employees looking for career progression as it is for small businesses looking to build a strong team. So employees in non-leadership roles can benefit from taking on some leadership responsibilities for certain projects or shadowing leaders to be able to develop their leadership skills, a key characteristic of business acumen.
8 Essential Business Acumen Skills
When building business acumen, focus on strengthening the following skills.
Financial Literacy
Maintaining profitability and improving the bottom line are key concerns business leaders are responsible for. All actions in a business affect them. Having the financial literacy to understand the financial health of a business is a real asset as it is an important part of the company’s big picture.
Strategic Thinking
For a business to grow, it needs to set specific goals. For those goals to be achieved, strategic thinking is needed. That’s how decisions are made to further progress toward the set goals. When setbacks occur or interfering factors are identified, strategic thinking ensures a resolution can be found.
Market Analysis
A business’ success is significantly dependent on what is going on within the industry. The actions of competitors and consumer demands directly impact sales. So being able to conduct a market analysis and use that data to make decisions is crucial to business acumen.
Problem-Solving
Problems are guaranteed. Things don’t always go to plan. An individual that can turn problems into solutions will be very successful. Learn how to use creative thinking to be able to adapt to change and keep moving towards goals even when disruptive factors come into play.
Decision-Making
Having to make decisions that affect the business can be a real stumbling block for some people. While it can feel like a huge responsibility it is necessary to move the team forward. Contextual awareness supports strong decision-making within the workplace.
Communication Skills
Whether you work within a team or lead a team, communication is key. Regular touchpoints with your team help to keep communication flowing as well as considering the language and terms the receiver is familiar with to ensure clarity when conveying key information.
Emotional Intelligence
People make a business. That means feelings and emotions need to be taken into account when decisions are made. Have the self-awareness to understand the consequences of your actions and handle the reaction with care such as validating feelings instead of dismissing emotional reactions altogether.
Focus
There are so many factors that can affect the decision-making process. That means it’s easy to get distracted. The ability to pick out the factors that matter and focus on the end goal is really important. Business knowledge should deepen your perspective, not cloud your view.
Enhance Your Business Acumen with Podium
We can make fostering strong business acumen within your team easier with our digital tools. Podium is the hub of your business communications and intelligence. This includes communication from customers with our omnichannel inbox that can be analyzed for key data insights. A largely underrated messaging channel is web chat. We have a tool for implementing it with ease on your website.
Communication within the business is also important for sharing crucial insights like financial metrics. We have a VoIP phone service to make modern communication practical. There are plenty of other software and applications that support data-driven decision-making which is why Podium tools integrate with loads of other tools such as CCC, a tool that turns data into actionable insights. If you’re looking to discover your company’s true worth to make informed decisions and plan for success, try Podium’s Business Valuation Calculator. With Podium, you can create an ecosystem full of business insights.
