Business Acumen - I know how work should operate

Introduction

The term business acumen has many definitions. A simple way of looking at business acumen is having a good understanding of how organisations operate financially and how each part of the organisation has an important function. It also includes how an organisation adds value to people and the planet while focusing on profit. Business acumen therefore refers to the Triple Bottom Line (TBL) of People, Planet and Profit. 

People 

This level looks at the employees of an organisation and society overall. This level also focuses on fair salaries/ payment and decent working environments but also looks at ways an organisation can give back to the community.

Planet 

This level looks at an organisation’s attempt at reducing its environmental footprint, that is, the amount of waste or harmful substances produced by the organisation and the amount of the natural resources the company uses. It also includes ways that the organisation can give back to the planet.

Profit 

This level looks at the impact an organisation has on the economy both nationally and internationally. It looks at the economic activities of the organisation such as the payment of taxes, the creating of wealth and employment etc.

Benefits of having a strong business acumen

1. Helps you to address different parts of an organisation.

2. Gives work more meaning when one knows the importance of their role.

3. The organisation can grow together when staff understand finances.

4. Improves logical reasoning and responses to solve problems. 

Skill example

A person with a good business acumen understands how people, planet and profit work together to drive organisation productivity while adding value to people and the planet. They understand how all parts of work fit together to ensure a highly functional system. 

Matthew’s story 

Matthew is a 44-year-old working as a manager for a leading timber company. Matthew has been working for the company for about 15 years. Over the years, Matthew had noticed that the company was not doing anything toward sustainability. It seemed the company was only concerned about profit. In addition to this, the company had not provided or offered training for staff in the last couple of years, nor had anyone received any raise or promotion. It seemed the company was only serving itself. These actions didn’t go unnoticed. Slowly investors started pulling out, saying they needed to partner with organisations that were sustainable as failing to do so would negatively affect them.

After losing valuable investors and clients, the timber company decided to Go Green (decided to become a sustainable organisation). Some of the new changes they made were: First change the company made is towards their employees. New training and development policies and programmes were implemented. The issue of promotions and raises was referred to HR for a solution. The company invested in a new environment- friendly treatment for the timber, which causes less environmental damage and lasts longer, thus reducing the need to keep buying timber. The company also realised that they have done very little to help communities around them and as a result, has joined a housing initiative in which the company, with other partners, will donate timber to be made into small homes for the lesser fortunate.

The choice to become a sustainable organisation was a good one. Several other investors have since partnered with the timber company. Matthew is very pleased with the outcome of things. After so many years of service, he is also being recognised as a valued employee. Matthew felt proud to be a part of his company. That night as he fell off to sleep, he knew many families would also sleep well because of the efforts of a single timber company.

How to grow your business acumen skills

Business acumen is the ability to understand and analyse business situations, make sound decisions, and take effective actions. Here are some ways to grow your business acumen skills:

1. Stay informed: Stay up-to-date with the latest news and trends in your industry, as well as broader economic and political developments that may impact your business. Read business publications, attend conferences and webinars, and network with other professionals in your field.
2. Learn from others: Seek out mentors or other successful business leaders who can share their knowledge and experience. Look for opportunities to shadow or observe them in action, and ask for feedback on your own business decisions and strategies.
3. Analyse data: Develop your analytical skills by learning to read and interpret financial statements, market data, and other relevant data points. Use this information to identify trends, forecast future performance, and make data-driven decisions.
4. Focus on strategy: Develop your strategic thinking skills by focusing on the big picture, identifying long-term goals, and developing a plan to achieve them. Consider different scenarios and outcomes, and develop contingency plans to mitigate risk.
5. Build relationships: Develop your interpersonal skills by building relationships with key stakeholders, such as customers, suppliers, and employees. Cultivate a network of contacts who can provide support and insights into your business operations.
6. Take risks: Develop your risk-taking skills by taking calculated risks and learning from your successes and failures. Be willing to experiment with new ideas and approaches, and be prepared to pivot when necessary.

By focusing on these areas, you can develop your business acumen skills and become a more effective leader and decision-maker in your organisation.