by Rommin Adl
According to the McKinsey report, “Governance since the Economic Crisis”, which surveyed 1,597 corporate directors in April 2011, knowledge is still lacking at the executive level. Only 36 percent of respondents say that they have a complete understanding of their company’s financial positions, and only 21 percent say that they have a complete understanding of their current strategy.
Without business acumen, employees have a difficult time understanding business strategies and how to implement them effectively. This problem can be further exacerbated when the larger organization is misaligned and functions fail to work together. Learning business acumen is like studying a new language or riding a bike for the first time: unless you actually do it, it is difficult to master.
It is mission critical that leaders and employees throughout an organization have the appropriate business acumen to ensure success. Do you have a business acumen gap in your company?
How many of your leaders can make the following statements?
- I understand the big picture. I understand how individual business decisions are interrelated, and my impact on company value creation and the customer experience.
- I possess a deep understanding of key financial levers and the tradeoffs and benefits of executing the company’s business strategy.
- I recognize how external marketplace realities are affecting the company’s ability to drive revenue and profitability.
- I appreciate and embrace new initiatives
- I understand how my company delivers shareholder value.
Most companies need to guide their leaders through at least one or more of the statements above. The best way to bring business acumen to life is through experiential learning and, in particular, customized business simulations. These learning platforms create highly realistic, engaging experiences that lead both to behavior change and effective back-on-the-job implementation. Furthermore, costly mistakes that could cripple a company are avoided. The end results are quantifiable and measurable, illustrated in everything from revenue growth to employee engagement. The impact is profound.
About the Author: Rommin Adl is an Executive Vice President at BTS.