These days, business acumen training is very likely to be found in the leadership development curriculums of major organizations, as well as smaller, progressive companies that invest in competency-based management education.
The reason for this type of leadership development is clear. Companies need managers at all levels and in all job functions making decisions that are aligned with financial goals and overall company strategy. Business acumen is a competency that not only guides the actions of managers, but also impacts the actions, decisions and behaviors of employees in their departments or on their teams.
Business acumen goes beyond financial literacy. Paradigm Learning’s definition is:
Business Acumen: An in-depth understanding of how a business works, how it makes money and how strategies and decisions impact financial, operational and sales results.
Given this definition, we believe that business acumen training which is incorporated into a leadership development curriculum must be considered and designed carefully by human resource and training professionals.
Financial literacy development should be coupled with strategic literacy. It’s not enough for managers to learn financial terminology and the tools of financial analysis like income statements and balance sheets. They must understand these terms and tools as they relate to the achievement of the company’s current and future goals and strategies. Financial literacy + strategic literacy = business acumen competency.
Business acumen training should incorporate a company’s own numbers and strategies. Generic financial literacy development can certainly be a first step. But the true value of business acumen training is achieved when it ties to the company’s real numbers and real strategies. Program customization is important and should be able to be smartly and flexibly designed into business acumen programs offered in the marketplace.
Business acumen development needs to engage learners. A curriculum session that is heavily laden with presentation, spreadsheets and overheads won’t work with those who don’t already have a baseline understanding or an affinity for numbers. A “game” or “simulation” approach can make it easier and more fun. And, that makes for more relevant and sustainable learning.
Business acumen training needs to extend beyond the classroom. On the job application should be built into the training session(s) and then extended into the workplace. Follow up and support approaches, often in online form, can provide reinforcement and motivation as well as the monitoring of on the job action. Sustainability should be part of the training’s overall design and deployment.
In summary, today’s leadership development curriculum need to incorporate business acumen training. At the same time, that training needs to be designed and implemented thoughtfully and thoroughly to have lasting impact.