Business Acumen

1

How to Improve your Business Acumen & Entrepreneurial Thinking

2

Business Acumen Defined

““Understanding the organization’s business model and financial Understanding the organization’s business model and financial goals; utilizing economic, financial, and organizational data to goals; utilizing economic, financial, and organizational data to build and document the business case for investing in workplace build and document the business case for investing in workplace learning and performance solutions; using business terminology learning and performance solutions; using business terminology when communicating with others.”when communicating with others.” (Bemthal et al., 2004)(Bemthal et al., 2004)

3

Components of Business Acumen

Thorough insight into organizationThorough insight into organization

Comprehensive understanding of the organization’s operationsComprehensive understanding of the organization’s operations

Ability to apply and interpret financial dataAbility to apply and interpret financial data

Correct use of business terminologyCorrect use of business terminology

Identify the priorities of the organizationIdentify the priorities of the organization

Creating a value propositionCreating a value proposition

Advancing the learning and performance agenda of the organizationAdvancing the learning and performance agenda of the organization

4

Gaining Insight into the Organization

Increase knowledge of the organization’s business model, Increase knowledge of the organization’s business model, strategic plan, and competitive position in the marketplacestrategic plan, and competitive position in the marketplace

Know how the business leverages core competencies forKnow how the business leverages core competencies for growth and profitabilitygrowth and profitability

Know what the value statement is to external customersKnow what the value statement is to external customers

5

Understanding Business Operations

Develop knowledge of the organization’s structure, systems, Develop knowledge of the organization’s structure, systems, functions, and business processesfunctions, and business processes

Be familiar with planning processes and decision-makingBe familiar with planning processes and decision-making channelschannels

Know the information management systemsKnow the information management systems

Understand how products and services are developed, sold, Understand how products and services are developed, sold, and delivered to customersand delivered to customers

6

Applying and Interpreting Financial Data

Know the financial goals of the organizationKnow the financial goals of the organization

Understand financial data and how it relates to businessUnderstand financial data and how it relates to business success measuressuccess measures

Ability to interpret balance sheets, graphs, charts, tables, etc.Ability to interpret balance sheets, graphs, charts, tables, etc.

Ability to perform quantitative calculations in building aAbility to perform quantitative calculations in building a business case, preparing budgets, evaluating the impact of abusiness case, preparing budgets, evaluating the impact of a program, and determining return-on-investment (ROI).program, and determining return-on-investment (ROI).

7

Use of Business Terminology

Ability to translate business jargon into business terminology thatAbility to translate business jargon into business terminology that stakeholders and customers will understand and respectstakeholders and customers will understand and respect

Know and speak the language of the organizationKnow and speak the language of the organization

8

Identifying Organizational Priorities

Thorough knowledge of the needs and expectations ofThorough knowledge of the needs and expectations of customerscustomers

Ability to track changes in the needs and expectations ofAbility to track changes in the needs and expectations of customerscustomers

Determining links between internal demands and externalDetermining links between internal demands and external needsneeds

Understand the business priorities of internal clients and howUnderstand the business priorities of internal clients and how the organization can assist them with achieving greaterthe organization can assist them with achieving greater successsuccess

9

Create a Value Proposition

Determine link between business needs and particular Determine link between business needs and particular solutionssolutions

Document how particular solutions achieve resultsDocument how particular solutions achieve results

Identify outcomes that result from implemented solutionsIdentify outcomes that result from implemented solutions

Ability to create a compelling business caseAbility to create a compelling business case

10

Advancing the Learning and Performance Agenda

Insight into how decisions are made within the organizationalInsight into how decisions are made within the organizational structurestructure

Know how power is exercisedKnow how power is exercised

Ability to use one’s understanding of organizational politicsAbility to use one’s understanding of organizational politics across business units and key decision-makersacross business units and key decision-makers

Identify key stakeholders and their prioritiesIdentify key stakeholders and their priorities

Ability to present and successfully defend learning andAbility to present and successfully defend learning and performance solutionsperformance solutions

11

Common Mistakes in Developing Business Acumen

Lack of understanding of basic business terminologyLack of understanding of basic business terminology

Overuse of buzzwordsOveruse of buzzwords

Incorrect use of return-on-investment (ROI) speakIncorrect use of return-on-investment (ROI) speak

Failure to understand what key stakeholders’ definitions of ROI Failure to understand what key stakeholders’ definitions of ROI areare

Unconditional love or inflexible use of one specific approach, Unconditional love or inflexible use of one specific approach, method, idea, or product.method, idea, or product.

12

How to Increase Business Acumen

Increase understanding of financial terminology and organizationalIncrease understanding of financial terminology and organizational performance metricsperformance metrics

Work at the pace of the organizationWork at the pace of the organization

Understand the financial picture of the organizationUnderstand the financial picture of the organization

Volunteer Volunteer

13

Understanding Financial Terminology and Performance Metrics

Enroll in a finance courseEnroll in a finance course

Practice reviewing and interpreting financial data such as departmentalPractice reviewing and interpreting financial data such as departmental financial statements, balance sheets, etc.financial statements, balance sheets, etc.

Develop and monitor a personal budget and ask internal experts for feedbackDevelop and monitor a personal budget and ask internal experts for feedback

Observe the strategies of colleagues who make successful financialObserve the strategies of colleagues who make successful financial decisionsdecisions

Partner with a financial manager to gain insightPartner with a financial manager to gain insight

Ask a financially savvy colleague for tips and feedbackAsk a financially savvy colleague for tips and feedback

Volunteer for cross-training opportunitiesVolunteer for cross-training opportunities

14

Working at the Organization’s Pace

Work with clients collaboratively to identify and communicateWork with clients collaboratively to identify and communicate progress of a particular planprogress of a particular plan

Earn the right to be included in financial business-planningEarn the right to be included in financial business-planning processesprocesses

Administer an ROI analysis for an idea you want to implementAdminister an ROI analysis for an idea you want to implement

Present the analysis to senior leaders.Present the analysis to senior leaders.

15

Understanding the Financial Picture

Understand the organization’s financial goals, profit margins, andUnderstand the organization’s financial goals, profit margins, and how they measure against the competitionhow they measure against the competition

Read industry specific publications to track trendsRead industry specific publications to track trends

Know your customersKnow your customers

Take on leadership rolesTake on leadership roles

Attend professional conferencesAttend professional conferences

Network with industry professionalsNetwork with industry professionals

16

Volunteering

Volunteer to manage the finances of a community organizationVolunteer to manage the finances of a community organization

Volunteer to work on a community project that involvesVolunteer to work on a community project that involves significant business activitysignificant business activity

Review the financial health of a community organization andReview the financial health of a community organization and provide feedback for improvementsprovide feedback for improvements

17

Benefits of Developing Business Acumen

Promotes teamworkPromotes teamwork Fosters knowledge sharing environmentFosters knowledge sharing environment

Gain understanding of how your department contributes toGain understanding of how your department contributes to organizational objectivesorganizational objectives

Ability to see how your actions make a differenceAbility to see how your actions make a difference

Continued…

18

Benefits of Developing Business Acumen

Aligns your goals with those of the organizationAligns your goals with those of the organization

Significantly increases chances for upward mobilitySignificantly increases chances for upward mobility

Increases motivation to learnIncreases motivation to learn

Creates comfort engaging in business or company specific Creates comfort engaging in business or company specific discussionsdiscussions

19

““Without strong business acumen, Without strong business acumen, workplace learning and performance workplace learning and performance professionals are merely transactional professionals are merely transactional service providers who can be easily service providers who can be easily purchased in the marketplace.”purchased in the marketplace.” Tom Thivierge, Tom Thivierge, Director of Succession Planning for General MotorsDirector of Succession Planning for General Motors

20

Entrepreneurship Defined

““doing things that are not generallydoing things that are not generally done in the ordinary course of businessdone in the ordinary course of business routine.” routine.” (Penn State University)(Penn State University)

21

Develop Entrepreneurial Thinking

Have a thorough understanding of the organizationHave a thorough understanding of the organization

Know how the organization operates and generates incomeKnow how the organization operates and generates income

Know your competitorsKnow your competitors

Engage in intelligent risk-takingEngage in intelligent risk-taking

Become an innovative thinkerBecome an innovative thinker

Think like the ownerThink like the owner

22

Understanding the Organization

Familiarize yourself with the history of the organizationFamiliarize yourself with the history of the organization

Get involvedGet involved

Ask to learn how to interpret important documentsAsk to learn how to interpret important documents

Know the mission statementKnow the mission statement

Identify ways you can contribute to the missionIdentify ways you can contribute to the mission

Lead task forcesLead task forces

23

Understanding Operations

Attend training offeredAttend training offered

Know the strategic plan Know the strategic plan

Know your department’s business planKnow your department’s business plan

Continually look for ways to develop yourselfContinually look for ways to develop yourself

24

Knowing the Competitors

Ask customers how your organization measures up to competitorsAsk customers how your organization measures up to competitors

Obtain and review the competition’s promotional literatureObtain and review the competition’s promotional literature

Use information about competition to look for ways for yourUse information about competition to look for ways for your organization to gain the competitive advantageorganization to gain the competitive advantage

Stay current with industry changesStay current with industry changes

Join professional associationsJoin professional associations

25

Engaging in Intelligent Risk-taking

Make decisions that involve risksMake decisions that involve risks

View mistakes as opportunities to learnView mistakes as opportunities to learn

Expect setbacksExpect setbacks

Take initiative Take initiative

Know the difference between a healthy risk and a foolish chanceKnow the difference between a healthy risk and a foolish chance

26

Be an Innovative Thinker

Foster a creative environmentFoster a creative environment

Look for new ways to improve old routinesLook for new ways to improve old routines

Have faith in your capabilitiesHave faith in your capabilities

Identify ways to empower yourselfIdentify ways to empower yourself

Never assume that an idea won’t work just because its neverNever assume that an idea won’t work just because its never been tried beforebeen tried before

Suspend critical judgment of ideasSuspend critical judgment of ideas

27

"I know I will be _________. Therefore I will "I know I will be _________. Therefore I will be ___________. Fill in the blank."be ___________. Fill in the blank." Ryan P. Ryan P.

Allis, entrepreneurAllis, entrepreneur

28

Bibliography

Bemthal, Paul R., Karen Colteryahn, Patty Davis, Jennifer Naughon, William J. Rothwell, and Rich Wellins. ASTD 2004 Competency Study: Mapping the Future New Workplace Learning and Performance Competencies. Alexandria, VA: ASTD Press, 2004.

“Encouraging Entrepreneurial Thinking.” Motivational Magic Resource Database. October 17, 2008. http://www.motivationalmagic.com/library/ebooks/motivation/McGraw-Hill%20-%20Briefcase%20Books%20-%20Motivating%20Employees.pdf

“Entrepreneurship.” Penn State University. October 22, 2008. http://www.mne.psu.edu/lamancusa/Entrepn/Module1/Lecture/Entre.doc

Green, Raymond D. “Beyond Financial Literacy: The Importance of Business Acumen Training for Managers and Employees.” Paradigm Learning. October 22, 2008. http://paradigmlearning.com/documents/WP_Business%20Acumen.pdf

Stern, Barry and Bob Walters. “Build Your Business Acumen Workplace learning and performance professionals need to think and talk like their internal customers. Here’s how.” June 2005. American Society for Training & Development. October 17, 2008. http://www.astd.org/NR/rdonlyres/7EA68B02-ED44-4DAE-B5B4-041A4056C349/12335/Business_building.pdf