What is Business Acumen?
Business acumen is a combination of knowledge and skill informed by experience: knowledge about key business issues, the skill to apply that knowledge, and the confidence to take action informed by past experiences.
Individuals may possess the relevant knowledge, but without skilful application that knowledge will not translate into any individual or organisational gain, therefore it is the ability to take informed action that is critical. Experience provides the individual with the confidence to take appropriate action, even when the facts are unclear or unknown, and the desired for outcome can not be guaranteed.
Business acumen need not relate exclusively to organisations dedicated to the generation of profit. Traditionally there has been a divide between a business which is classified as an organisation driven to achieve profit, and other types of organisation where the objective may not be to make money. Business acumen is equally applicable to both. Whatever the organisation, it will have an over-riding objective and it is the understanding of this and what is required to achieve it that encapsulates business acumen.
At a very basic level all organisations, whether they are commercial or not-for-profit, involve taking an input and adding value or applying a change to create an output. And all organisations wish to do this as efficiently and effectively as possible. In a business that means more profit, and in a not-for-profit organisation it means more services applied to generate higher output.
Examples of organisational objectives
Commercial organisation – business measures:
- Increase shareholder value (share price, dividends, price/earnings ratio)
- Achieve a specific market share (second quartile competitor in the industry )
- Achieve growth target (10 more retail outlets)
Not-for-profit organisation – social and political measures:
- Maximise the number of services provided (operations/ doctor’s appointments)
- To be in the top ten organisations to work for (voted for by staff)
- Efficiency – to run all services in a timely manner (10% error margin)
- To ensure x % of children attain y qualifications
In order to help the organisation achieve its objectives, at whatever level within the organisation individuals operate, they will need to know certain things:
Design & Facilitation
Tackle your specific issues with a bespoke business simulation game. We use our expertise in the design process to work with you to ensure you have an effective solution that really improves performance.
Ethics
Create a culture where personal and organisational values can be aligned to create a sustainable and successful organisation. Make the ethical dilemmas embodied in the decision making process explicit, create a healthy conversation and develop the skills required to take appropriate action.
