Business Acumen Skills & Examples | What is Business Acumen? – Video & Lesson Transcript | Study.com

Business Acumen Benefits

Business acumen is essential for the success and growth of organizations. Most of a business’s top leaders or executives are expected to have high levels of business acumen. The benefits of business acumen include excellent leadership, productive relationships, and organizational success.

Excellent Leadership

The main benefit of business acumen is excellent leadership. People with business acumen are great leaders because they have the understanding and wisdom to push the members of an organization toward success. First, people with business acumen are great leaders because they understand what’s going on in business contexts. They can speak with all different kinds of employees and understand what needs to be accomplished. Second, people with business acumen are great leaders because they can apply their knowledge to discern how to reach success. They understand what is going on and they have the practical wisdom to reach organizational goals.

Productive Relationships

People with business acumen understand how much business relies on relationships, and they have the emotional intelligence needed to successfully relate to others and build relationships that promote success. These kinds of relationships are not normal friendships; rather, they are professional relationships that are based on shared organizational goals. People with business acumen know how to develop these relationships and use them for success. They make sure relationships prioritize organizational success.

Organizational Success

The ultimate benefit of business acumen is organizational success. Business acumen is always about being able to meet an organization’s goals and facilitate healthy growth. This means people with business acumen understand the importance of sustainability. Sustainability is the capacity for an organization to continue what it’s doing long term. People with business acumen leverage their excellent leadership and productive relationships to meet goals and sustain an organization. The four core areas of business acumen (planning, operations, finance, and strategy) are integral for organizational success. People with business acumen use their skills and leadership to promote success in each area. That means planning for what the organization will need in the future, ensuring an organization’s essential practices run smoothly, promoting an organization’s profits, and executing special tactics for success.

Business Acumen Skills

Having business acumen requires skills. Business acumen skills are the capacities and traits that people with business acumen use to reach success. Here are three fundamental business acumen skills that are essential for success.

Practical Wisdom

The key skill for business acumen is practical wisdom. This means that people with business acumen know how to use their knowledge of business to understand particular situations and make decisions in those situations that promote future success. Most often, practical wisdom is a product of theoretical and experiential knowledge. Theoretical knowledge enables one’s understanding of different business functions, and experiential knowledge enables one’s decision-making in particular situations.

Emotional Intelligence

People with business acumen have honed their emotional intelligence. Having emotional intelligence means being able to understand how others and oneself respond to different situations. This kind of understanding makes it possible for someone to relate to others and communicate in ways that build relationships and promote success.

Decisiveness

Those with business acumen are able to be decisive because they understand all the factors that should go into a business decision. People with business acumen can make decisions based on information that comes from multiple experts or departments. They lean on their practical wisdom to decide and follow through with it.

Business acumen requires thoughtfulness and patience

Business Acumen Skills Examples

What does it look like when people use their skills? These business acumen skills examples provide a sense of what they bring to the workplace.

Practical Wisdom

Leaders demonstrate practical wisdom when they know what to do in a difficult situation. They understand the core challenge of a situation because of their understanding of business, and they know what to do because their experiences have made them wise. For example, businesses in 2021 faced the challenges of the great resignation, which was an increase in the number of people leaving their jobs. This means many businesses faced the challenge of trying to keep great employees. Leaders with practical wisdom figured out what to do by finding out why people were quitting their jobs and responding accordingly. They knew that keeping good employees is an important part of doing business, and they knew that to find out what needed to be done, they would have to experience what is happening on the ground.

Emotional Intelligence

Emotional intelligence is played out in relationships. Leaders with emotional intelligence forge good relationships with other professionals. For example, successful managers know how to give constructive feedback. It is important when providing feedback as a leader to understand how someone will receive your message. Good leaders work on framing feedback according to how it can help others become more productive. This is higher emotional intelligence than giving feedback without consideration of how it will be received. Productive feedback can be crucial for success in the core area of operations. Members involved in operations practices like distribution can grow professionally through feedback and become more valuable members of the organization who improve their contributions to the organization’s success.

Decisiveness

Being decisive means making decisions in difficult situations in a timely and committed fashion. People with business acumen understand that difficult situations never have clear answers. They make decisions based on the best information they can get, and they don’t become paralyzed by anxiety. For example, marketers plan the messages of marketing campaigns well in advance. They face great uncertainty about how their messages will be received by their audiences in the future. Decisive marketing managers know ahead of time what information they need to make the best decision they can, and they stick with whatever decision they make.

Lesson Summary

Business acumen is about understanding and application, knowing how a company profits and ho to keep making money. Leaders with business acumen can understand various kinds of business situations, and they are able to act decisively based on practical wisdom to promote organizational success. The three main benefits of business acumen are excellent leadership, productive relationships, and organizational success. People with business acumen make great leaders because they know how to make difficult decisions, and they have the emotional intelligence needed to do business in ways that forge productive relationships. People develop business acumen by learning theoretical knowledge about how businesses work and by having real-world experiences making and learning from business decisions. In sum, business acumen refers to the ability to do business successfully.

Business acumen can always be tied back to the core elements of business expertise, which are planning, operations, finances, and strategy. People demonstrate business acumen by succeeding in each of these areas. Planning is about caring for an organization’s future needs, which requires knowing what they are. Operations concerns the essential practices that keep a business running. Finances concern an organization’s capital and whether it is profitable, and strategy concerns the tactics an organization uses to succeed. Having business acumen means understanding how all these kinds of expertise come together to promote organizational success. In sum, business acumen helps leaders understand their place in an organization and how to promote its success.