What Business Acumen Skills are Most Needed in the Workplace?
How you Expand When you Acquire Business Acumen:
When you expand your business acumen, you acquire a lot of new skills. But, which ones are most critical in the workplace?
There are a lot of them, but we think there are at least three that are vital!
1) Understanding where your company is going.
2) The ability to make a business case, or think about a business idea through the lens of the business acumen fundamentals - and then apply that to your company.
3) Being comfortable with major financial statements and key financial metrics - for example, the P&L or Income Statement.
Let us break these down a little further...
UNDERSTANDING WHERE YOUR COMPANY IS GOING
The first one is really understanding where the company is going. The stock price is about the future. So, where the company is trying to go. For an individual, it's essential that you take the time to put into context what you do each day to help contribute to how the company will get there. If you don’t know where the company is going, then the decisions you make every day may or may not directly apply to where the company is trying to go. And to try to elevate your credibility and your impact, you really need to align what you do every day to where the company is going.
MAKING A BUSINESS CASE
Another skill set is around putting a business case together. What we mean by this is that you need to put your business ideas into context with where the company is going. It’s not just about the technical feasibility of the product, but it’s about how your business idea contributes to the future of the company, contributes to the economics of the company, and being good at linking your business ideas to that I think is vital to elevating your credibility, and your impact.
UNDERSTANDING FINANCIAL STATEMENTS
The third thing is being good at understanding at least the high-level financials of the company’s performance. Particularly the P&L or Income Statement, which lay out the sales of the company, its cost, and then the profits at the end.
You need to evaluate the role you play in generating more sales, where you spend money, and what kind of impact that spend has on additional sales, the additional future success, and how much profit you can help contribute to it, then helps the company take those profits, reinvest those in a way that helps drive the future success of the company.
Understanding where the company is going and the ability to develop a business case along with the understanding the high-level financials really starts to elevate the credibility of your business ideas. It starts to shape your language a bit differently so that it better aligns the language and the metrics you use to where the company is going and how the executives think. It certainly gives you a much higher likelihood that your business ideas get funded because you’re putting it in context to where the company is actually trying to go, and where the executives are trying to go as well.
Understanding the P&L in a lot of ways is the language of business. So if you can apply that language not only do they see you as a good functional leader, but also they see you as a better business thinker, much more aware of the company broadly, and your contribution to that.
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