The Cambridge English Dictionary defines acumen as “skill in making correct decisions and judgments in a particular subject, such as business or politics: [i.e.] She has considerable business/financial acumen.”
But surely only the people at the very top of your organization’s hierarchy need business acumen? After all, they’re the ones calling the shots and making decisions, aren’t they? Actually, that’s not quite true. For the more employees you have with great business acumen, the more finely tuned your departments that make up your business will be.
However, not everyone was born with a keen eye for business. Of course, your company is made up of people who are awesome at what they do: Talented programmers, graphic designers, salespeople, accountants and more. But do they have business acumen along with their primary skill set? And if not, is there anything the HR team can do to help develop it?
After all, a lack of business acumen can directly correlate to a lack of understanding of how your company operates as a whole. And that means that employees might not know how to add more value to your business, or worse, could inadvertently be doing things that negatively affect it.
So let’s take a look at some ways Human Resources can step in and help.
5 Ways to develop your employees’ business acumen
Unless you have a very rigid company setup that’s highly micromanaged by its leaders and managers, it’s likely that your employees are trusted to make decisions throughout their working day. The way they act or the choices they make can indirectly, and directly, have an impact on your company’s brand and reputation and even on its profitability.
Put simply, employees need to act in your company’s best interests - and that’s why having a certain degree of business acumen is so important.
The negative effects of a lack of business acumen
Think we’re exaggerating? Surely just because Paula in accounts or Sanjay in the design department doesn’t have the greatest business head on them, that doesn’t mean your company is going to suffer dire repercussions?
Well, think of it this way: Even if just a small proportion of your employees don’t make choices that are informed by some degree of acumen, there will be a knock on effect. For example:
- If your employees don’t understand how they fit into the bigger picture, they’re likely to be less motivated and less engaged - and therefore less productive.
- Employees who are not engaged with their work tend to be on the lookout for a new role elsewhere, leading to problems with your retention rates. (Not to mention the expense of having to replace the people who leave.)
- Employees who are disengaged tend to be negative, which can in turn affect their teammates and the overall company culture.
- Not understanding the bigger picture doesn’t enable employees, who may have great ideas, to add valuable input.
- A lack of acumen can lead to employees making decisions that don’t align with your company’s goals, mission and strategies.
- Relationships with clients, suppliers, and partners can, best case scenario, rumble along with no growth and worst case scenario, suffer to the point of no return.
Here’s the thing. Employees don’t want to make errors at work. And most of them want to be able to add value and do a great job. But if they don’t have a great sense of business acumen, they might just be missing out on ways to go the extra mile.
And it goes without saying that these employees shouldn’t be written off. They should be given the chance to improve their business smarts!
And that’s where HR can step in (with the help of your leaders and managers) to really make it your goal to help your people understand the business that they are a part of.
What do employees need to know?
All employees should all be equipped with basic knowledge about the organization from their very first day of working for you. The following are well worth adding to your new hire checklist so that you know you’ve covered them:
- Who is your company’s customer or target audience?
- What are the organization’s mission and goals - and how can they be achieved?
- What business model does the company operate upon?
- What is the relationship between the organization’s different departments?
- How does the company make money?
Once your people have the basics it’s time to build on that foundation with deeper insight, learning and training.
Ideas for helping grow your employees’ business awareness
- Embrace cross-departmental training: Once your employees have their own roles down to a tee and understand where they belong in the grand scheme of things, have them shadow a coworker in other departments. This gives them a much broader insight into how the company and its people pull together for the greater good
- Implement cross-departmental troubleshooting: Much like cross-training which aims to get your employees working together, bringing together a group of people made up of someone from each department to solve a particular issue will help foster a greater appreciation of how your teams work together to power the business.
- Make sure employees understand the financial side of things: This doesn’t mean giving everyone a password to your accounting software or distributing bank statements, but ensuring that everyone who works for you has some concept of how the business made (or lost) money over an appointed period of time is crucial. Specifically, they should be able to see how their team, department, and even they, had an impact on that.
- Check in with employees to ensure they know what your goals actually are: Not knowing what you’re working towards or what the expected end result is meant to be is demoralizing and can make work feel like a grind. Making sure all members of staff know what your business goals are, and helping them to understand how they can contribute towards achieving that goal, allows them to a) feel involved and b) make better decisions.
- Encourage employees to share their company-related thoughts and ideas: As your employees’ business acumen grows, so too, hopefully, will their ideas on how to improve the way they and their team work. They may even have great ideas that will really benefit the business. Just remember that not everyone has the confidence to speak up - especially in a meeting - so this can be facilitated through online forms or questionnaires or in your periodic stay interviews and employee appraisals. Just don’t forget to recognize the people who put forward great ideas!
One of the main things when it comes to encouraging business acumen to flourish in your workplace is to make sure it becomes a part of your company culture.
For example, when you’re looking for new hires, you may have certain personalities and character traits that you look for, alongside their skills, competencies and qualifications. Add business acumen to that list and you’ll slowly start to integrate it into your workplace.
5 Ways to develop your employees’ business acumen: Conclusion
We all show up to work to do a job. But when we apply business acumen alongside our core skills, we are taking things to the next level. We understand how the role we play is contributing to the company’s profits. We understand our targets and know what we need to do to meet them. We are better equipped to identify ways to elevate our work and improve the business.
We can tell the difference between good and bad decisions in a professional capacity. We understand how our role intertwines with those of our teammates and other coworkers. And we can avoid making costly, wasteful or time consuming errors.
As your organization’s Human Resources department, if you can start getting your people to think along more strategic lines, you are empowering your business with a workforce of employees who aren’t just clocking in and out, but who are invested in the company and using their new found acumen to help propel your business (and their careers) forwards.