What does Business Acumen Mean?
Business Acumen helps you to stay ahead in business by understanding the market trends, economic scenarios and your competitors. Business Acumen is used for strategic decision making, evaluating new opportunities and generating insights with an aim to outperform.
It has been found that people who are strategically inclined have the ability to tackle business problems with ease. This leads them to make better decisions for their organization, personal life and investors.
How to develop Business Acumen?
Business Acumen can be developed through observation, analysis of data, experience and conceptual thinking.
You can develop Business Acumen by:
· Understanding the economic and industry trends,
· Looking at historical data,
· Connecting the dots between different variables,
· Generating insights with relationships and correlations.
1) Understand the Economic and Industry Trends:
Business Acumen is best developed by understanding the market trends including demographic changes, technological advancements and global factors. Companies which keep themselves updated about these trends are always ahead of competition than those who don’t.
2) Look at Historical Data:
Look at historical data to understand the changing patterns in the products, services and customer preferences. This will help you to take intelligent decisions and stay ahead of your competitors.
3) Connect the Dots:
Find relationships between variables to gain deeper understanding of things around you. It will help you to create new opportunities and outperform the competition.
4) Generate Insights with Relationships and Correlations:
Look for relationships between sets of data, understand the correlations between different variables. This will help you to create new opportunities and find success in your business.
Why is Business Acumen Important?
The information needs of businesses are changing. Fast-paced, chaotic lifestyles with no time for reflection aren’t conducive to long-term thinking—in fact, they’re diametrically opposed to it. Information is the lifeblood of your business; if you don’t have it, how can you make better decisions that can have an impact on your company’s bottom line?
It is much easier to make quick, informed decisions when you do not have to worry about whether your data and information are up-to-date and accurate.
For example: Starbucks CEO Howard Schultz understood that his customers wanted a more intimate and relaxed seating arrangement, so he decided to introduce a new type of store in the market – “Starbucks Reserve Roastery and Tasting Room”. He conceptualized it as a modern day version of Willy Wonka’s Chocolate Factory .
In another example, CEO of Aldi Peter Hempel was visiting one of his stores in Australia and he saw a woman buying a saucepan. When she was paying for it, the cashier told her that they did not have a bag for that particular item. The woman replied that she does not need a bag, because she lives alone and only cooks for herself.
Peter Hempel watched this incident closely and came up with a new idea to save plastic bags. He started “Bring Your Own Bag” campaign, which encouraged people to bring their own shopping bags from home. In the course of time, this initiative cut down the usage of plastic bag and helped the environment as well.
Why should Business Acumen be Part of Management Studies?
Business Acumen is not only important for the higher management, but also for middle and lower level employees.
It will help them to take more strategic decisions that can have an impact on business results.
Business Acumen helps the employees to understand the market trends, environment factors and their competitors. It helps them to come up with new ideas that create better value for the organisation.
Therefore, it is important for management students to learn and develop Business Acumen through observation, analysis of data, experience and conceptual thinking.
What are the Benefits of Business Acumen?
Business Acumen helps you to keep a close eye on your market by understanding all the factors that influence it. It will help you to stay ahead of your competitors by understanding the changing customer needs and business trends.
It will help you to take better decisions for your organisation by providing information about the key drivers of business results. It also helps managers in gaining a deep insight into businesses and exploring new opportunities for growth.
Business Acumen can be further developed through:
1) Learning from Experienced People:
Successful people do not become successful by mere chance. They understand the need to learn new things and embrace change in their lives.
You can watch experienced people closely, get involved with them and ask questions to get a better understanding of your market. It will help you play a bigger role in your organisation.
2) Reading Books:
Reading books is both fun and informative. It helps you to increase your knowledge, especially when reading about topics that interest you in particular.
There are many books available in the market on different topics related to Business Acumen. You can find a list of such books in this article . By reading more books, you will become a better learner and a more informed person.
3) Learning from the Internet:
In today’s world of internet and technology, everything is just a click away. You can learn so much from various websites, blogs and e-books available on the internet.
Keeping updated by reading regular blogs will help you to get a better understanding of the changing business trends. It will also help you to increase your knowledge.
Business Acumen helps managers to be more insightful and it will certainly help them to take better decisions. It also enhances the learning capabilities of an individual.
Therefore, management students should try their best to develop it through systematic learning, mentorship programs and continuous practice with the goal of increasing their awareness about business environment factors.
Business Acumen can help you achieve your career goals by helping you in making better business decisions.