Business Acumen skills - is this the missing jigsaw piece?
Posted by Helen Lumb - 16th July 2013

A dictionary definition of business acumen is keenness and speed in understanding and deciding on a business situation.

‘Acumen’ comes from the Latin ‘acuere’ or ‘acute’ and means to ‘sharpen’

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This is the latest in a current series of articles to enabling a business partnering way of life and what I believe the missing link, the final piece in the jigsaw, to financial success.

People who have business acumen are business ‘savvy’, Business acumen is the ability to fully understand the business model – the strategy, stakeholder objectives, the competition and the product and service. They fully understand how changing strategies, key decisions, behaviours and actions impact on the financial performance of the business.

Business acumen has to start at the top in any business, ensuring that targets and measures are fully aligned across departments to fully drive the business strategy, in order that the business vision, mission and purpose can be achieved.

Business acumen or commercial awareness is not an innate skill and is something that can be learned or developed. I believe this a key component to leadership success and comprises:

 Understanding the big picture

 Understanding strategy

 Financial literacy

 Understand the relationships and consequences of actions

 Understand the push/ pull factors

 Having clarity of purpose

 Ability to leverage skills to strengthen the company’s financial position.

Today’s business as a result of global recession has become ever-more complex , fully of uncertainty and changes are rapid and consequential. It has never been more important for leaders and managers and any person who has influence within the business, to develop business acumen, in order that the decision making process is robust and relevant.

For many individuals, commercial/ financial awareness development is restricted to ‘finance for non finance manager’ training courses. Whilst these are better than nothing, developing a knowledge of financial terms and generic understanding of Profit & Loss/ Balance Sheet and Cash Flow does not develop business acumen. Apart from the fact this sort of training can be deathly boring (and as an accountant myself I can say that because I couldn’t think of anything worse!), they don’t equip anyone to truly understand the impact of strategy and behaviours. There also tends to be a real aversion to financial driven training, probably due to lack of interest and fear.

A better way of developing business acumen, is practical, case study or simulation led exercises. If these case studies are based on the business’s own business model, the learning and development will go deeper still and will allow time to be spent on the most relevant areas.

There is also a way to develop this process further and deeper. Collaborative, partnership working with a finance professional. I believe that developing business acumen or commercial awareness in conjunction with implementing a finance business partner approach can be the key component in delivering financial performance.

A finance partnering approach, involves the finance professional working inside the business closely with the business managers. They are skilled in all the financial literacy that is needed, but may not have the vital understanding that the business manager has of that particular area of the business. The partnering process, therefore requires:

 Collaboration and relationship building

 Trust

 Effective communication

 Buy in and engagement of all parties

This delivers a partnership, rather than necessarily a single individual that has impeccable business acumen.

For this to work in practice, there are a number of core capabilities required for all parties. These involve soft skills for the finance professional and developed business acumen for both parties, to enhance communication and engagement. Use of mentors and strategic coaches to support the partnership is also a very valuable approach.

The business manager has all the knowledge of the business which can be imparted to the finance professional, the finance professional has all the financial literacy and this can the support the business manager. This combination of communication and engagement, with aligned business goals that support the business strategy……equals financial success!

This model is totally scalable and in my article ‘Entrepreneurs and Accountants’ I have shown how this is very relevant to the SME/ startups and family run businesses.

What are your experiences of finance business partnering? Is this a recognised term for you? Have you implemented this? Please share…

This is the 7th blog in a series to generate awareness of finance business partnering, please read my blogs, give me your comments and feedback, share and follow me on Twitter where I will post when I have added new information or send me your email address to Helen.lumb@indigoperformance.co.uk and I will contact you when a new post has been added.

Helen Lumb is director and co-owner of Indigo Performance Ltd, a company dedicated to developing finance professionals and businesses for increased performance, an active partner in Jenson Solutions Ltd - a chartered accountancy firm of part time Finance Directors and a qualified executive coach and NLP practitioner.

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Business Acumen skills - is this the missing jigsaw piece?Posted by Helen Lumb - 16th July 2013

Business Acumen skills - is this the missing jigsaw piece?
Posted by Helen Lumb - 16th July 2013