Business acumen is a gift, a skill that gives the individual the ability to make good judgments and take quick decisions in business situations in a way that usually leads to a successful outcome.
Experts say that business acumen is not an innate skill – it can be learned. However, there appear to be people who develop the skill more rapidly and easily than others. While some are lucky to have been brought up in a business environment where they absorb the skill’s components from a very early age, others acquire it later on in life.
The modern English word ‘acumen’ with its current meaning emerged in the 16th century. It comes from Latin ‘acumen’ which means “a point, sting”, which came from ‘acuere’ which means ‘to sharpen’. Hence, acumen refers to a person with a shrewd and sharp mind.
The ability to see the big picture, make decisions, cut through complexity, focus on profits, and understand the market, are some of the components of business acumen.
According to the FT Lexicon, business acumen is:
“Keenness and speed in understanding and deciding on a business situation. In practice, people with business acumen are thought of as having business ‘sense’ or business ‘smarts’.”
Ability to see what matters and act quickly
People with business acumen have the ability to obtain the most important and relevant data about a situation, concentrate on the key goals, rapidly identify the best options available for the optimum way forward, choose the right course of action, and put the whole thing into practice to complete the job.
They are able to rapidly spot changes that need to be made, adapt to them, and make the necessary adjustments in their businesses while pushing forward at the same time.
They have an innate ability to see the ‘big picture’ in their organization, how the key drivers in their business are inter-related, and work together to produce profitable growth.
Business acumen means a high success rate
An individual with business acumen is more frequently right in his or her assessments and choices than wrong. They are admired by others for their accurate decisions and overall business success.
According to Dr. Raymond R. Reilly, who works at the Ross School of Business, part of the University of Michigan, and Dr. Gregory P. Reilly of the University of Connecticut, people with business acumen have:
– an acute perception of the dimensions of business issues,
– the ability to make sense of seemingly complex situations, as well as uncertain futures,
– an awareness of how a choice may affect all the parties involved,
– the ability to make decisions,
– the ability to adapt if situations demand flexibility.
“Acumen is housed in the mind, and those with it are able to use it effectively ,vithout necessarily relying on organizational support or detailed business case development,” Drs. R. R. Reilly and G. P. Reilly wrote.
Most people develop business acumen while working. They absorb the required skills by being observant, thoughtful, and gaining insight from knowledgeable mentors.
Robin S. Sharma, a Canadian writer, famous speaker, leadership expert, and a former Litigation lawyer, once said about business acumen:
“I believe we can accelerate our acumen, performance and success by leveraging our associations and spending time with people better than us.”
Sophia Amoruso, who owns and founded Nasty Gal, a company that sells clothing, shoes and accessories for young women, said:
“Creativity and business acumen don’t always go hand in hand.”
Dame Anita Roddick (1942-2007), the British businesswoman who founded The Body Shop, a cosmetics company that produces and retails natural beauty products, said:
“I started The Body Shop in 1976 simply to create a livelihood for myself and my two daughters, while my husband, Gordon, was trekking across the Americas. I had no training or experience and my only business acumen was Gordon’s advice to take sales of £300 a week. Nobody talks of entrepreneurship as survival, but that’s exactly what it is and what nurtures creative thinking.”
Video – Business acumen explained