Business acumen, also known as business savviness and business sense, is keenness and quickness in understanding and dealing with a business situation (risks and opportunities) in a manner that is likely to lead to a good outcome.[1] Additionally, business acumen has emerged as a vehicle for improving financial performance and leadership development.[2] Consequently, several different types of strategies have developed around improving business acumen.
In his 2012 work, Seeing the Big Picture, Business Acumen to Build Your Credibility, Career, and Company, Kevin R. Cope put forward that an individual who possesses business acumen views the business with an “executive mentality” – they understand how the moving parts of a company work together to make it successful and how financial metrics like profit margin, cash flow, and stock price reflect how well each of those moving parts is doing its job.[3] Cope proposes that an individual who has the following five abilities could be described as someone having a strong sense of business acumen:
- See the “big picture” of the organization—how the key drivers of the business relate to each other, work together to produce profitable growth, and relate to the job
- Understand important company communications and data, including financial statements
- Use knowledge to make good decisions
- Understand how actions and decisions impact key company measures and leadership objectives
- Effectively communicate ideas to other employees, managers, executives, and the public[4]