Ever wondered what separates a good manager from a truly great leader? Or why do some employees effortlessly climb the corporate ladder while others plateau? The answer often boils down to two words:
Business acumen is understanding how business, strategy, and money work. It’s one of the most important skills you can cultivate to make an investment in your career success.
What is Business Acumen?
Business acumen is the keen understanding of how a company operates, what drives its profitability, and how various decisions impact its overall success. It encompasses a range of skills and knowledge areas, including financial literacy, market analysis, strategic thinking, and problem-solving, enabling individuals to make informed and effective business decisions.
Sharpening your business acumen should be on your must-do list because it can improve the following:
- Strategic decision-making: You’re not just reacting to problems as they arise but proactively steering the ship. You can spot opportunities and threats long before they’re visible on the horizon, making your decisions more strategic and impactful.
- Increased profitability: Let’s talk bottom line. A solid understanding of what drives revenue and impacts costs means you’ll be making more and more financially sound decisions. It’s like having a sixth sense for ROI.
- Leadership excellence: Employees look up to business leaders who not only talk the talk but also walk the walk. A strong business acumen allows you to set an example of informed, data-driven decision-making, boosting your team’s confidence and inspiring them to follow your lead.
- Career advancement: Climbing the corporate ladder isn’t just about putting in the hours; it’s about showcasing your value. Developing business acumen is often a key differentiator in promotions, job opportunities, and long-term career success. Think of it as your secret weapon for standing out in a crowded field.
If you’re still on the fence about investing time in developing your business acumen, consider giving it a shot. It’s not just a skill; it’s a career game-changer.
13 Actionable Tips to Upgrade Your Business Acumen
Here are a variety of tips to help inspire ways for you to upgrade your business smarts.
1. The “Netflix and skill” approach
Who says binge-watching can’t be productive? Certain shows and documentaries provide valuable insights into how businesses and industries function.
If you pick the right media, you can build your business acumen in your recreational time.
Action Step: Consider one of the following TV shows for your next binge. After each episode, jot down one or two takeaways you could apply in real life.
- Shark Tank: Aspiring entrepreneurs pitch their business ideas to a panel of industry titans, hoping to secure investment and mentorship.
- Inside Bill’s Brain: This docuseries takes a deep dive into the mind of Bill Gates, exploring how one of the world’s richest and most philanthropic men thinks and tackles global issues.
- Undercover Billionaire: Billionaire Glenn Stearns goes undercover in a small town with just $100 and aims to create a million-dollar business in 90 days, showcasing the challenges and opportunities of starting from scratch.
- The Profit: Marcus Lemonis, CEO of Camping World, invests in struggling businesses and attempts to turn them around, offering invaluable insights into business operations and leadership.
- Billions: A high-stakes drama exploring the world of financial acumen and power dynamics, focusing on the legal and ethical grey areas a hedge fund manager and a U.S. Attorney navigated.
- Our free trainings. Vanessa Van Edwards, our founder, hosts many free workshops going over different aspects of success. Check them out:
2. Play business board games
Yes, you read that right. Certain board games train resource management, strategic thinking, and risk assessment. You can cultivate certain business acumen through play.
Action Step: Host a monthly board game night with friends or family and pick games that require strategic thinking. Have fun while subtly honing your skills. Here are a few to try:
- Cashflow: This business game was created by the Rich Dad Poor Dad franchise. It is played in business schools around the world to help business students understand the modes of business.
- Suburbia: This tile-laying game has you building your city and honing skills in urban planning, resource allocation, and long-term strategy.
- The Extraordinaires: In this imaginative game, you act as a product designer for extraordinary clients (like superheroes or vampires), polishing your skills in creativity, problem-solving, and customer needs analysis.
- Power Grid: This game tests your resource management and strategic planning abilities as you strive to power cities through various energy sources.
- Forbidden Island: Though not directly a business game, Forbidden Island improves your team collaboration and crisis management skills as you work with others to collect treasures from a sinking island.
3. Podcast club
Networking is key, but how about adding a little twist?
Before your next coffee date with a colleague or even hang-out session with a business-minded friend, propose that you both listen to a business-related podcast before the conversation and then plan to discuss it together and glean insights. Pick a podcast in your niche or industry so as not to get overly vague business advice.
Action Step: Before your next coffee catch-up, send the person you’re meeting a recent case study or business podcast to discuss during your get-together.
4. Increase your strategy muscle with probabilistic thinking
The process is straightforward. When you have a decision, list every possible outcome in order of desirability. Then, guess the percentage likelihood that each possibility will happen.
Then, you look at the percentages and decide how you feel about moving forward with them.
I use this process in my decision-making framework when making lofty decisions.
Here’s an example from my own life.
About a year ago, I decided to sign up for a training in relationship coaching skills. It was a year-long training for about $5,000. After a participant completes training 1, they can do an advanced training for another $5,000. But there was also an option to sign up for both trainings from the start for $8,000 with no refunds.
I could save money by signing up for both upfront or paying more to remain flexible. I was torn!
Here’s what I listed out at the time:
|Estimated % likelihood
|Potential outcomes if I sign up for both trainings at once
|Training 1 is awesome. And I want to do training 2 by the end of it.
|Training 1 is great. I’ll do training 2 because I’m signed up. But I’m held by the commitment and want to explore elsewhere. That said, I’ll still keep it going, and training 2 will still feel life-giving.
|Training 1 is good. Training 2 seems incredible, but I don’t want to do it, and unfortunately, I feel committed to it. I do it begrudgingly.
|Training 1 was super meh, but I still completed it. I don’t want to do training 2 whatsoever and decide not to.
|I hate Training 1 and drop out before it’s over.
I am about to start training 2 in a month or so, and the reality of what happened was somewhere between the first and second rows.
If you practice making decisions with this framework, it will train you to think strategically and probabilistically.
Action Step: Next time you’re faced with a decision (big or small!), grab a piece of paper and sketch out all the possible outcomes from most desirable to least desirable. Then, estimate the probability of each outcome. Then, given your estimations, ask yourself if you’re okay with your choice.
In addition to that practice, here’s a great article on strategic thinking.
5. Swap skills with a colleague
You may be a whiz at marketing, but your financial literacy could use some work. Why not swap skills with a finance-savvy colleague? It’s a win-win for both parties.
Action Step: Identify a colleague with skills you want to learn and propose a skill swap session. Spend an hour a week teaching each other.
6. Join (or create!) a mastermind group
Mastermind groups meet regularly with like-minded individuals to discuss business goals, challenges, and strategies.
I find groups like this to be beneficial for both learning and accountability. I currently meet every week with a business friend of mine. We share what’s happening in our careers, get advice from the other person, and then co-work for an hour. Our founder, Vanessa Van Edwards, has an entire video below on how to run your mastermind:
Here’s an article on creating a mastermind if you want to go deeper.
Action Step: Search online for industry-specific mastermind groups and commit to attending at least one meeting a month.
Or make your own! Think of 1-3 people whose business savvy and ambition you admire, and invite them to a trial mastermind group for a month where you meet weekly to discuss goals, share challenges, and give each other advice.
7. Job shadow
Spend an hour or two understanding what another department does. This could be done virtually, where you attend another department’s meetings and understand their workflow.
This will broaden your business understanding and give you a more holistic perspective on what goes on in your company’s operations.
Action Step: Coordinate with your HR department or manager to facilitate a daily virtual job shadow experience.
8. Teach to learn
There’s no better way to solidify your understanding of a subject than to teach it to someone else.
If you can give a presentation or lead a workshop on a business topic you are interested in, you can bet you’ll improve your knowledge by focusing more on it.
Action Step: Volunteer to lead a session in your next team meeting or an upcoming company off-site.
9. Shadow an executive
Spend a day (or even an hour!) shadowing a senior executive or business leader in your organization. There’s no substitute for firsthand experience when it comes to learning decision-making and strategic planning.
Action Step: Reach out to a senior leader in your organization and ask if they would let you shadow them for a day or even an hour.
10. Engage with thought leaders on social media
Platforms like LinkedIn and Twitter give you direct access to industry leaders and experts. Don’t just follow them—engage with their content, ask questions, and offer your insights.
The act of responding thoughtfully will get you thinking about the right topics. Plus, you might get a response from them or other business thinkers who follow them.
Action Step: Identify at least three industry leaders you admire on social media platforms. Make it a habit to engage with their posts at least once a week to keep your finger on the pulse of cutting-edge ideas.
11. Learn from failures (yours and others)
No one likes to mess up, but mistakes are a treasure trove of learning. Reviewing your setbacks or studying high-profile business failures can provide invaluable lessons.
Action Step: Create a “failure journal.” Whenever you encounter a mistake or learn about a business failure, jot down what went wrong, how it could be avoided, and what behaviors to cultivate in the future.
There are also plenty of online videos where successful business people walk you through their failures. Here’s one that I found interesting:
12. Join specialized online communities
We’re in a golden age of accessibility regarding professional knowledge and networking. Online communities like Discord servers, Reddit forums, or Facebook groups focused on your industry can be gold mines of information, advice, and connections.
These spaces often feature discussions on the latest trends, shared articles, and even AMA (Ask Me Anything) sessions with industry experts. By becoming an active member, you can gain from collective wisdom and even contribute your insights to become a thought leader in the space.
Action Step: Search for two or three online communities that resonate with your professional interests. Commit to spending at least an hour a week engaging with posts, asking questions, and networking with other members.
13. Adopt a “learner” mindset
The world of business is ever-changing. From market trends to emerging technologies, the only constant is change itself. Embrace a lifelong learning mentality that makes you adaptable and always hungry for knowledge.
And if you want to up your acumen, the most surefire way is to gobble up books, classes, and videos.
Action Step: Pick a few business-related blogs to read and allocate 15 minutes daily to reading articles that broaden your business perspective. Here are a few options:
The Elements of Business Acumen
To improve your business skills, picking apart what goes into business acumen can also be helpful.
Below, we’ve broken the concept down into its most important elements.
Notice which parts you feel like a pro and which elements you could use a knowledge boost on.
- Strategic thinking. This is all about seeing the big picture, identifying long-term goals, and knowing the steps needed to reach them. Here’s a highly recommended book called Good Strategy Bad Strategy.
- Financial skills. Understanding balance sheets, income statements, and cash flow is essential for making informed business decisions.
- Market awareness. Knowing your industry trends, competitors, and customer needs gives you the edge in making smart moves.
- Risk assessment. Being able to evaluate risks and potential rewards allows you to make decisions that are bold yet informed. Here’s a helpful article that can help you improve your risk-taking skillset.
- Negotiation skills. Effective negotiation can be the difference between success and failure, whether negotiating contracts or salaries. Here’s a great guide on negotiation.
- Leadership qualities. Leadership isn’t just about giving orders; it’s about inspiring your team, managing dynamics, and driving results. Here’s a compelling article that can teach you strong leadership skills.
- Problem-solving. In business, problems are a guarantee; being able to solve them efficiently and effectively is invaluable. Here are some tips on how to become a pro problem-solver.
- Networking and relationship building. Knowing how to cultivate a professional network and build long-lasting relationships is often what sets great business people apart from good ones. Here is a guide to becoming an expert networker and developing strong communication skills.
- Adaptability. The business world is ever-changing, and adapting to new circumstances, technologies, or market conditions is crucial for long-term success.
- Time management. Effective time management allows you to prioritize tasks, focus on what matters most, and achieve your goals more efficiently. Here are 33 time management tips to help you improve your chronological chops.
- Viewing things from the customer’s point of view. Understanding your customer base’s needs, preferences, and pain points enables you to tailor your product to meet the market’s demands.
- Sales and influence. This includes proficiency in selling products or services, understanding customer pain points, and closing deals. It also involves understanding the nature of sales, persuasion, and influence.
To improve your business acumen, it can be helpful to identify your weakest point—the skill slowing down the rest of the pack—and get it up to speed.
Action step: Go through each skill below and rate yourself for each skill on a scale of 1-10 (1 being I am a total noob at this skill, 10 being I am a master).
- Strategic thinking
- Financial skills
- Market awareness
- Risk assessment
- Negotiation skills
- Leadership qualities
- Networking and relationships
- Time management
- Viewing things from the customers’ eyes
- Sales and influence
Frequently Asked Questions About Business Acumen
To develop your business acumen skills, immerse yourself in a combination of formal education, real-world experience, and continuous learning. Whether it’s taking courses, practicing soft skills, or participating in simulations, the key is to diversify your learning avenues.
Practical examples of business acumen include forecasting market trends before they happen, implementing cost-saving measures that benefit your company’s bottom line, or successfully negotiating a lucrative deal. Think of it as making moves that aren’t just good but are backed by solid business logic.
Business acumen differs from general business knowledge in that it’s not just about knowing facts or theories but about applying the knowledge and set of skills in real-world situations for strategic advantage. It’s the difference between knowing chess’s rules and winning games.
Whether business acumen can be learned or is an innate skill is a bit of a chicken-and-egg scenario. While some people may have a natural inclination for business thinking, the consensus is that strong business acumen skills can be actively developed. It might take years of experience, but business acumen is a learnable skill.
Business acumen contributes to career advancement and growth by equipping business professionals with the ability to make data-driven, strategic decisions that benefit their organization. This makes you an asset in your workplace and puts you on the fast track for leadership roles.
Common challenges people face in developing their business acumen include finding the time to learn, dealing with information overload, and the struggle to apply theoretical knowledge in a practical context. Overcoming these challenges often involves setting focused learning goals and seeking mentorship or real-world experiences.
Takeaways on Business Acumen
If you want to upgrade your business acumen, try out some of these tips:
- The “Netflix and skill” approach: Who says binge-watching can’t be productive? Choose shows that offer insights into business dynamics and strategies.
- Play business board games: Board games like Suburbia or Power Grid can enhance your skills in resource management, risk assessment, and strategic thinking.
- Podcast club: Prior to a meeting with a business-minded friend or colleague, both of you listen to a business podcast and discuss its insights, enriching your understanding of current trends and strategies.
- Increase your strategy muscle with probabilistic thinking: Use a structured approach to decision-making that estimates the likelihood of various outcomes, enhancing your ability to think strategically.
- Swap skills with a colleague: Exchange knowledge to fill in your skill gaps, such as financial literacy or marketing skills.
- Join (or create!) a mastermind group: Participate in or start a mastermind group to discuss business challenges and goals, benefiting from collective wisdom and accountability.
- Job shadow: Spend time observing another department in your organization to broaden your business perspective and see how different pieces fit into the company puzzle.
- Teach to learn: Offer to lead a workshop or presentation on a business topic; teaching solidifies your understanding and promotes knowledge sharing with other team members.
- Shadow an executive: Spending time with a senior executive can provide unparalleled insights into decision-making, strategy, and leadership.
- Engage with thought leaders on social media: Active engagement with industry experts on platforms like LinkedIn and Twitter keeps you abreast of current trends and ideas.
- Learn from failures (yours and others): Analyzing setbacks and mistakes, either yours or those from high-profile cases, offers invaluable lessons in what to avoid and improve.
- Join specialized online communities: Being part of online forums like Discord or Reddit focused on your industry can offer a wealth of information, advice, and connections.
- Adopt a “learner” mindset: Maintain a lifelong commitment to learning, as the ever-changing business landscape demands constant adaptation.
Best of luck on your journey of increasing your business acumen!
If you’d like to dive deeper, here’s a list of 18 of the best business books.