With the rapid pace of change occurring in just about every industry, one can imagine the gap between what employees know and what they need to know is only growing. In particular, business acumen is a critical capability area that employees and managers at all levels typically lack.
In the Skills Mismatch research conducted by the Economist Intelligence Unit and sponsored by BTS, over 65% of leaders surveyed said that a lack of strong business acumen among their leaders was a significant impediment to their success.
Without the proper business knowledge and training, employees have a difficult time achieving success, often failing to understand business strategies and how to implement them effectively. These problems can be further exacerbated when the larger organization is misaligned and functions fail to work together.
The essential tool for employees at all levels is a solid understanding of business acumen, which provides the critical foundation for all business skills. In today’s world, business acumen is often pushed to the bottom of the employee skill development priority list, but in reality, it is more important than ever.
Part of the reason for this may be because building business acumen can be difficult; like studying a new language or riding a bike for the first time, just learning about it is fruitless. Unless you actually do it and practice it yourself, it is difficult to master.
It is mission critical that leaders and employees throughout an organization have the appropriate business acumen to ensure success. As Jeff McCreary, former Chief Sales and Marketing Officer at Texas Instruments, once commented, “Solid business skills are the foundational strength of virtually any enterprise. To build a high-performing culture and a team committed to rapid execution, you have to develop business acumen. Otherwise, you won’t be as successful as you can and should be.”1
Business acumen is the foundation that drives employees’ understanding of both the strategy and its successful implementation. Ask yourself: Do you have a business acumen gap in your company?
To help answer that question, ask yourself how many of your leaders agree with the following statements:
- I understand the big picture of our company and how we operate
- I recognize how external marketplace realities are affecting the company’s ability to drive revenue and profitability
- I have a deep understanding of our near- and long-term strategies
- I understand how business decisions are interrelated, and what my impact is on the customer experience and company value creation
- I possess a deep understanding of levers that I impact and their effect on our company’s key performance indicators
- I understand how my company delivers shareholder value
Most companies find that they have gaps in this knowledge at all employee levels.
Business acumen gaps are relatively straightforward to identify. They can be addressed directly by leaders who roll up their sleeves and spend time communicating and personalizing the answers to these key questions. But keep in mind – telling people the answers doesn’t necessarily mean that they will know how to act differently on the job and gain the confidence to apply great business acumen.
After more than 30 years of developing this critical capability area, BTS has found that the best way to bring business acumen to life is through experiential learning and, in particular, business simulations.
Experiential learning platforms and business simulations create highly realistic, engaging experiences that lead both to behavior change and effective implementation back on the job. Furthermore, costly mistakes that could cripple a company are avoided.
According to PwC’s Global CEO Survey, three-quarters of CEOs in 77 countries say that the skills shortage is the biggest threat to business. The end result of investing in business acumen is insurance against costly business mistakes, providing an impact that is quantifiable, measurable, and illustrated in everything from revenue growth to employee engagement. The impact of great business acumen is profound.