Mastering business acumen: Your key to professional success

What are business acumen skills?

Business acumen skills are the abilities that enable professionals to understand and navigate the complexities of business operations and strategy. These include financial literacy, market awareness, strategic thinking, and decision-making prowess. Key components are interpreting financial statements, understanding customer needs, recognizing industry trends, and foreseeing the implications of business decisions.

Business acumen also encompasses leadership, adaptability, and the capacity to balance short-term gains with long-term objectives. These skills empower individuals to make informed choices that drive organizational success and growth.

As organizations are complex, various traits contribute to this skill set. These include:

• Soft skills - the interpersonal competencies that allow you to be an effective leader
• Financial literacy - the ability to understand and analyze numbers
• Strategic thinking - what you do with those numbers to drive the business forward.

Those who are naturally business savvy tend to be good all-rounders. These people are both 'left' brain and 'right' brain thinkers. However, in reality, most people find they excel in one or two areas, and need development in others.

Like any skill, business acumen can be strengthened through training and experience.

Investing in development in this area pays off. Firstly, it equips you with the confidence and know-how to navigate complex business situations.

For example, say you're a team lead and a new employee questions why you do things a certain way. With a deep understanding of the business context, you'll be equipped to tackle tricky questions. 

Business acumen is also a trait that hiring managers look for in prospective leaders. Are you someone who goes beyond the status quo, pioneering high-impact projects? This skill set positions you as more than just a cog in the machine but as someone who could play a pivotal role in business development. 

Why business acumen matters 

You've likely heard that 20% of businesses fail in their first year and 65.5% within their first 10 years.¹ In today's competitive business environment, those numbers are likely even higher.

Amid the ever-rising cost of living, businesses are under increasing pressure to do more with less. Unfortunately, that can translate to cost-cutting and redundancies. By actively developing your business acumen, you can position yourself as indispensable by:

Driving organizational success and profitability

While the expression 'knowledge is power' may be cliched, it rings true in business. The more you understand what moves the needle inside your organization, the more you can pitch ideas or make decisions stand out. This is especially crucial if you're in a leadership role, or are starting a business of your own.

Enhancing decision-making capabilities

No matter your level, you'll need to make decisions as part of your day-to-day work. Strong business acumen skills enable you to align these with bigger business development goals, leading to better outcomes for yourself, your team, and the wider organization.

Improving strategic thinking and problem-solving

Only 5% of employees fully understand their organization’s business strategies.² By taking time to connect with the bigger picture, you will enhance your reputation. 

Building credibility and influence within your organization

Your brand matters. Whether you're an employee negotiating a pay rise or a founder looking for capital investment, showcasing your business skills will differentiate you from the competition.

Business acumen in action: Real-world examples 

From global corporations to scrappy scale-ups and not-for-profits, you can find examples of business acumen across companies of all sizes and industries.

Just look for organizations that enjoy longevity, even in adversity.

One powerful, real-world example is Virgin CEO Richard Branson. Known for his wild marketing stunts, the entrepreneur combines creativity, smart business sense, strong leadership skills, and empathy in rare and brilliant ways.

Over the years, he has applied his skillset to various endeavors. From a college magazine and mail-order record company to global travel and finance companies. This has led to a net worth of more than US$2 billion. As someone with dyslexia and ADHD, Branson proves that being a divergent thinker can be a strength in business.

Airbnb co-founder Bryan Chesky is another example of a leader who uses strong business acumen as a competitive advantage.

When the COVID-19 pandemic hit, the accommodation booking platform lost 80% of its revenue.³ However, the CEO identified a trending opportunity in experiences, i.e., a marketplace where locals could share their expertise and pivot.

This led the business to bounce back stronger than ever. He was also able to navigate redundancies with grace, personally offering referrals and additional benefits to those who had been let go. This decision paid off to the point where those made redundant wrote Chesky a letter to thank him. 

It's not just founders who made an impact with their business savvy. Ursula Jones was the first African American woman to lead a Fortune 500 company in her role as CEO at Xerox.

Stepping into the role at the height of a global recession in 2009, she's credited with saving the company from bankruptcy by transforming it from a struggling photocopying business to a profitable technology enterprise.

Jones is often credited with leading with honesty, bravery, and exceptional communication skills. 

While these stories are inspiring, you don't need to be in the C-suite to see the payoff from mastering business acumen. For example, you might be an individual contributor, trying to balance your ever-growing workload without burning out.

By understanding what tasks drive business revenue, you can prioritize your to-do list more effectively. This allows you to wow your boss with your results without necessarily doing more work.

Key business acumen skills to master 

Business acumen isn't one single skill but rather a few essential skills that work together to allow you to make a more positive impact at work. These include:

Financial literacy and analysis

Deciphering financial metrics is crucial for understanding where the business is and where it's going. Nonetheless, Inc. Magazine recently reported that a group of business executives only scored an average of 38% on a financial literacy exam!⁴ This shows how rare financial acumen is, even among accomplished people.

While you don't have to be the next Warren Buffet, knowing your way around financial reports is useful. This includes understanding cash flow, operating revenue, net income, and gross income. Analytical skills are necessary, so you can use financial performance metrics to understand what business areas need more attention.

Market awareness and trend identification

Having your finger on the pulse in your industry improves business acumen. By maintaining a strong understanding of consumer behavior and industry trends, you can identify revenue opportunities your organization may have missed.

For example, you might find a way to simplify your company's current supply chain, leading to cost savings. Or, you might come across an innovative business model in a different sector that could be applied in your industry.

However, what's equally important is to develop critical thinking skills so you understand what ideas are worth pursuing.

🔭 Broaden your perspective and develop your strategic vision with our Big Picture Thinking online coaching program.

Strategic planning and execution

Another key component of business acumen is the ability to establish a plan and put it into action. Strong creative thinking and problem-solving skills allow you to take business issues inside your organization and turn them into drivers of growth. Other skills include the ability to define business goals and break them into an actionable plan.

🚀 Turn your ideas into action with our Start Fast online coaching program.

Risk assessment and management

Navigating risk is a crucial business acumen skill. This includes the ability to identify the potential short—and long-term consequences of decisions and areas of uncertainty.

It also involves knowing which data to incorporate into the decision-making process. By mastering these skills, you can make more informed decisions and move forward with clarity and confidence. 

💪 Explore, strengthen, and stand by your instincts by starting our Trust Your Gut Feel coaching program.

Cross-functional collaboration

Whether you're a team lead, manager, or team member, understanding how to work effectively with others is crucial. This requires strong interpersonal skills, such as emotional intelligence, empathy, active listening, and effective communication.

It also requires an understanding of departmental strategic goals and how employee roles interrelate. Each team member should be considered a stakeholder with unique motivations and priorities that need to be considered.

🤝 Elevate your teaming skills with our Team Building coaching program. Make decisions together quickly, and enjoy greater team cohesion.

Developing your business acumen: Practical strategies 

You don't necessarily need to study an MBA or start your side hustle to solidify your business acumen skills. With these strategies, you can level up your expertise during everyday work.

Seek out mentorship and coaching

While not all leaders have well-developed business acumen, there are likely people inside your organization or industry who you admire. These people will be an invaluable resource when it comes to building business acumen.

You might consider taking them for a coffee to ask about their approach to strategic decisions or whether you can shadow them in some meetings. This exposure to industry-specific, real-world business situations will expedite learning.

👩‍🏫 You might also hire a business or leadership coach. A cost-effective and time-efficient option is to work with AI coach Marlee. Based on 20+ years of research, Marlee uses advanced technology to harness the power of human coaching delivered in bite-sized sessions.

Understand yourself and others

It's one thing to know how to read balance sheets. But what's equally important is to know how to read people. Strong business leaders know how to communicate with those around them, based on their preferences, to get them excited to work towards a shared goal.

🔥 So, how do you access these insights? Well, it starts with you. By answering questions about what motivates you, Marlee provides a deeper understanding of your motivations, strengths, and blind spots. This includes benchmarking you against top entrepreneurs and leaders in your industry. 

You can then invite your team to connect in the app, and share their insights. By bringing your team together in a space, you can ask Marlee about similarities and differences in skills, motivations, and communication styles.  

Practice data-driven decision-making

Many business gurus have razor-sharp instincts, but that doesn't mean they rely on them constantly. One of the best things to boost business acumen competency is to consult the data before making decisions. This reduces bias and takes the guesswork out of decision-making.

This might involve using a culture mapping tool to develop a more inclusive and efficient work environment. Or, it could involve talent ranking when hiring, or people analytics to decide which team members to put together for a project.

Pursue continuous learning and self-education

Nobody becomes a business expert overnight. And, the beauty of developing these skills as an employee inside an organization is that you can avoid the steep learning curve that full-time entrepreneurs experience.

Marlee will be your perfect sidekick during this journey. As a coach to help you develop your business acumen skills and as a sounding board, you can ask Marlee questions about yourself or your team.

With these powerful tools, you'll have everything you need to get the most out of your team, drive business success and fuel professional growth.