How to Sharpen Your Workforce’s Business Acumen
"They don't have a clue."
Chances are you've heard this comment at work. Maybe it's managers talking about a group of workers, or employees venting about their leaders, or one department talking dismissively about another. Maybe no one actually says it out loud; it's muttered in hallways or implied via facial expressions. But most of us have at least had this thought at one time or another.
Sure, it's unkind. But it's also natural. After all, you and your closest colleagues in your field of expertise have a certain depth of knowledge, while others have a different set of perspectives, ones based on their area of expertise.
The trick in any organization is to find common ground, a lingua franca that helps everyone put those different points of view into a larger context. The IT department may use technological lingo that others can barely grasp, and the finance department may glibly expound about spreadsheets dense with data. Ultimately, though, everyone should speak the same language when communicating about the underlying well-being of the business.
Big problems occur, however, when members of an organization – especially its managers - don't have the business acumen they need to grasp the larger business context, finds a recent i4cp study of 394 business professionals.
Participants were asked, "How does a lack of business acumen among managers (and above) impact the business?" A quarter of respondents said this has an impact to a very great extent, and another 40% said it does to a high extent. In short, in most organizations, a lack of acumen can have a major negative impact.
It's difficult to imagine a good excuse for this. Managers who lack mastery of business skills are like lifeguards who lack swimming skills. It's dangerous because it can result in the kind of ill-informed decision-making that wrecks businesses. A deficit of such skills also sabotages internal communication by making the lingua franca of organizations indecipherable.
But while business acumen is most important among organizational leaders, it's increasingly needed elsewhere in the organization as well. About a third of respondents said, for example, that a lack of business knowledge is an issue among technical staff members to a high or very high degree. The study also found that for individual contributors (such as engineers and white-collar professionals), a lack of business acumen affects the business to a moderate (40%), high (35%), or very high (4%) extent.
It's clear from these findings that, in today's leaner and faster organizations, it often makes sense to spread business knowledge throughout the organization. If the people building the products and the infrastructure of the organization don't "get" the business issues, they're less likely to produce what their customers - both internal and external - actually need, and they're less likely to communicate well with colleagues in other areas.
Since ignorance is seen as the problem, it's no wonder that companies view education as the answer. The most common approach to the problem is "in-house customized training," favored by the 70% of respondents who said business acumen is an issue in their organizations.
Why customized training? Because of the way many organizations define business acumen: It's seen not only as the ability to understand business issues in general but also as the ability to understand the issues unique to an organization. For example, one respondent defined business acumen as an "understanding of company-specific processes and product offerings," and another called it an "understanding [of] key components of business - revenues, expenses, profits, customers, growth - and [of] our business model - how our business earns money."
Other respondents also highlighted the fact that having business acumen means thinking outside one's own department. One called business acumen an "understanding [of] the entire business, not just functional expertise."
A more generalized component to business acumen is also important. Many respondents noted that it includes subject matter learned in business schools, such as finance, accounting, sales, marketing, and strategy. This is, in fact, probably why 42% of respondents said their organizations use "off-the-shelf training" instruction to boost business acumen in their organizations. Others identified education solutions, including alliances with business schools (31%) and involvement in MBA programs (14%).
Depending on which employee groups they want to target, companies can spend a considerable amount of money on improving business acumen. Forty percent of respondents said they think less than $500 per seat per day is appropriate for this kind of training, but another 27% believe that $500 to $999 is appropriate. Nine percent even said that "more than $5,000" per seat per day is okay.
Of course, the ultimate cost depends on who receives the education. Organizations can afford higher costs per seat if they restrict such training to managers. In fact, when asked who they train in this area, half pointed to "managers and above," and 46% cited "high potentials." Over a third (39%) said that "all employees" are eligible to receive such training (respondents could choose more than one category). One respondent noted, "Training is available to everyone with the exception of contracted individuals..."
This desire to sharpen the business acumen of large numbers of employees probably explains why over half (58%) of respondents who provide such training make e-learning one of their options. Face-to-face classroom training is used by about three-quarters of those with such education programs, but that kind of training makes the most sense when it's targeted at smaller groups of workers.
Regardless of what strategy their organizations adopt, however, the i4cp survey respondents have some high hopes for business acumen education. One respondent noted, "Improved decision-making is certainly one of the expected outcomes. Improved cross-functional collaboration and process efficiency is another." And a second respondent got to the bottom line of such education: "Ultimately, more profit."
Chances are you've heard this comment at work. Maybe it's managers talking about a group of workers, or employees venting about their leaders, or one department talking dismissively about another. Maybe no one actually says it out loud; it's muttered in hallways or implied via facial expressions. But most of us have at least had this thought at one time or another.
Sure, it's unkind. But it's also natural. After all, you and your closest colleagues in your field of expertise have a certain depth of knowledge, while others have a different set of perspectives, ones based on their area of expertise.
The trick in any organization is to find common ground, a lingua franca that helps everyone put those different points of view into a larger context. The IT department may use technological lingo that others can barely grasp, and the finance department may glibly expound about spreadsheets dense with data. Ultimately, though, everyone should speak the same language when communicating about the underlying well-being of the business.
Big problems occur, however, when members of an organization – especially its managers - don't have the business acumen they need to grasp the larger business context, finds a recent i4cp study of 394 business professionals.
Participants were asked, "How does a lack of business acumen among managers (and above) impact the business?" A quarter of respondents said this has an impact to a very great extent, and another 40% said it does to a high extent. In short, in most organizations, a lack of acumen can have a major negative impact.
It's difficult to imagine a good excuse for this. Managers who lack mastery of business skills are like lifeguards who lack swimming skills. It's dangerous because it can result in the kind of ill-informed decision-making that wrecks businesses. A deficit of such skills also sabotages internal communication by making the lingua franca of organizations indecipherable.
But while business acumen is most important among organizational leaders, it's increasingly needed elsewhere in the organization as well. About a third of respondents said, for example, that a lack of business knowledge is an issue among technical staff members to a high or very high degree. The study also found that for individual contributors (such as engineers and white-collar professionals), a lack of business acumen affects the business to a moderate (40%), high (35%), or very high (4%) extent.
It's clear from these findings that, in today's leaner and faster organizations, it often makes sense to spread business knowledge throughout the organization. If the people building the products and the infrastructure of the organization don't "get" the business issues, they're less likely to produce what their customers - both internal and external - actually need, and they're less likely to communicate well with colleagues in other areas.
Since ignorance is seen as the problem, it's no wonder that companies view education as the answer. The most common approach to the problem is "in-house customized training," favored by the 70% of respondents who said business acumen is an issue in their organizations.
Why customized training? Because of the way many organizations define business acumen: It's seen not only as the ability to understand business issues in general but also as the ability to understand the issues unique to an organization. For example, one respondent defined business acumen as an "understanding of company-specific processes and product offerings," and another called it an "understanding [of] key components of business - revenues, expenses, profits, customers, growth - and [of] our business model - how our business earns money."
Other respondents also highlighted the fact that having business acumen means thinking outside one's own department. One called business acumen an "understanding [of] the entire business, not just functional expertise."
A more generalized component to business acumen is also important. Many respondents noted that it includes subject matter learned in business schools, such as finance, accounting, sales, marketing, and strategy. This is, in fact, probably why 42% of respondents said their organizations use "off-the-shelf training" instruction to boost business acumen in their organizations. Others identified education solutions, including alliances with business schools (31%) and involvement in MBA programs (14%).
Depending on which employee groups they want to target, companies can spend a considerable amount of money on improving business acumen. Forty percent of respondents said they think less than $500 per seat per day is appropriate for this kind of training, but another 27% believe that $500 to $999 is appropriate. Nine percent even said that "more than $5,000" per seat per day is okay.
Of course, the ultimate cost depends on who receives the education. Organizations can afford higher costs per seat if they restrict such training to managers. In fact, when asked who they train in this area, half pointed to "managers and above," and 46% cited "high potentials." Over a third (39%) said that "all employees" are eligible to receive such training (respondents could choose more than one category). One respondent noted, "Training is available to everyone with the exception of contracted individuals..."
This desire to sharpen the business acumen of large numbers of employees probably explains why over half (58%) of respondents who provide such training make e-learning one of their options. Face-to-face classroom training is used by about three-quarters of those with such education programs, but that kind of training makes the most sense when it's targeted at smaller groups of workers.
Regardless of what strategy their organizations adopt, however, the i4cp survey respondents have some high hopes for business acumen education. One respondent noted, "Improved decision-making is certainly one of the expected outcomes. Improved cross-functional collaboration and process efficiency is another." And a second respondent got to the bottom line of such education: "Ultimately, more profit."