Business acumen is the keenness and swiftness in dealing and understanding a “critical business situation” in a likely direction to result in a satisfactory outcome. Also, business acumen has proved itself as a vehicle to enhance leadership development and financial performance. The term “business acumen” pertains to the quality of management ability, which includes the ability to identify, evaluate and eliminate problems.
In today’s complex and uncertain economic environment, the ability of business acumen to make decisions and achieve desired objectives is more critical than ever. Most businesses are not only seeking cost savings but also increasing cash flow. Therefore, leaders must be able to recognize problems, formulate an appropriate strategy, and manage resources to achieve the desired results. While managers and other leaders may not always possess all the skills necessary to solve problems or formulate strategies, they do have the ability to develop strategies and make decisions. Furthermore, they must know how to manage their people–the key drivers of business acumen. If managers and leaders do not understand the people driving a project, plan and implement an effective operation, and have a clear understanding of their own and others’ unique needs and requirements, they will be ineffective at ensuring both customer satisfaction and long-term profitability.
To improve business acumen, organizations must continually evaluate management practices, develop and implement effective communication and leadership skills, and commit to professional development programs. Organizations should not wait for bad management practices to appear before they take action to change ineffective practices. They should also consistently evaluate their strategies, implement management improvements, and create an environment of continuous professional development and monitoring. Finally, leaders must continually evaluate the impact of change on their organization and commit to correcting problems that do not affect the core strength of their business.