Why developing business acumen can be beneficial for employees and an organization.
In the competitive world that we live in, many jobs recommend employees build business acumen skills. All levels of an organization need business acumen to execute successful strategies. Business acumen is the ability to understand key business issues. In addition, it’s a combination of general and specialized knowledge of how to make logical decisions that positively impact the organization.
Many employees don’t realize that employers are looking for solid business acumen skills that will enhance the company’s performance. Having strong business acumen skills in today’s world is crucial.
By building business acumen, employees can gain a deeper understanding of themselves and the organization and have better workplace skills. Furthermore, people who have core business acumen skills improve their chances of going far within a company.
Here are five reasons why employers want employees to have strong business acumen.
1. An Organization Without Business Acumen Can Have Negative Effects Throughout The Company
Companies with employees without business acumen see less employee productivity and engagement within the organization. A lack of business savviness can increase the employee turnover rate.
Furthermore, employees make disastrous decisions that don’t benefit the organization’s goals, leading to less profit gain and poor communication. Employees without business acumen core skills miss out on giving ideas that can bring meaningful change within a company by reducing costs and improving efficiency and customer satisfaction.
Examples of core business acumen skills:
- Communication
- Critical thinking
- Problem-solving
- Creativity
- Strategic planning
- Leadership
- Marketing
- Decision-making
- Finance
- Motivation
- Planning
According to acumen learning.com, business acumen is vital in driving credibility and relevance within employee roles. Developing business acumen skills within an organization can be achieved by investing and training employees about the organization’s strategic goals and how each employee can have a positive effect.
2. Employees Gain A Understanding Of Key Business Functions
An employee who is in tune with how a business runs can make decisions that are a good fit and knowledgeable. Leaning into business acumen involves being highly familiar with the company’s culture and how to produce increased profits for the company.
In addition, employees with strong business acumen can determine important economic and individual relevance factors. The best business acumen component is the ability to make decisions that produce efficient cost savings, market awareness, and the needs and wants of the company’s customers.
Educating an employee about the company’s business model can further the employee’s understanding of the business growth strategy and how the organization functions as a whole.
3. Building Business Acumen Improves Business Performance
An organization is constantly looking for ways to improve its performance – employees who provide a significant role in strategy execution, ideas, and decisions based on business acumen, directly and indirectly affect the company’s results.
When employees make educated decisions to find a solution to how they can better support a corresponding business system, functions, and processes will lead to a better systematic view of business and develop into a better decision-making process. Making impactful decisions leads to a team that produces new ideas and brings clarity and focus to an organization.
According to the Business Acumen Institute , the career advisory board announced that nearly half of business leaders surveyed report a gap in business acumen regarding new talent.
Effective Ways An Employer Can Develop Business Acumen Within Their Employees
- Give employees clear insight and understanding of business goals.
- Educate each employee on how their role can contribute toward strategic business goals and success.
- Crosstraining – Having employees know the importance of their role within a company and understanding the value other positions and surrounding departments have. Also, being involved with colleagues and knowing their job helps broaden their perspectives and increase awareness.
- Employees should be familiar with business finance, such as cash flow, budgets, statements, departmental numbers, and how a business is losing and making money.
- Provide tools and resources to educate employees on business acumen, such as books on various business skills and topics, and gain a connection with an academic institution for online courses on business acumen development.
4. Visualizing The Big Picture
The path to improving business acumen is seeing the big picture of how a business affects people’s work, mindset, and performance. Employees who are more engaged believe their work matters. Furthermore, business acumen provides a keen understanding of a business situation.
In today’s evolving world, it’s vital to be highly knowledgeable of current technology and applications that a growing business needs. Employees need to be courageous to bring innovative ideas to fruition and stay ahead of the competition. Otherwise, a business can fall behind or fail.
5. Good Business Acumen Provides A Vital Role In Leading A Organization Into A Positive Direction
When an organization has a team of employees with business acumen, chances get higher for an organization’s optimal success. According to professional leadership.com, a reason for a lack of business acumen is not having curiosity. The more curious an employee is, the better problem-solving and innovation results will be.
Organizations with employees who have strong business acumen are more likely to be leaders in terms of growth, profitability, and market share.
The foundation of business acumen is communication. Excellent communication skills help employees work together more efficiently. Someone who communicates well can convey an intriguing vision and explain why it works.
Conclusion
Learning business acumen will help employees improve their business mindset and behave like business owners. Employees with business acumen can enhance their job performance within a company by having a role that allows them to be proactive in the direction the organization is moving in.
A company with satisfied, motivated employees who are advancing in their careers will bring the organization on the road to success.
To read more about business operations, check out a blog post I wrote about how a business can improve its outlook for the future.
Finance and Business Operations Pathway 