Business Acumen and Business Change

To manage business change effectively and deliver a more effective outcome, business acumen is something you’ll need. As a starting point, you’ll need to be able to answer the following five questions:?

1. What are the KPIs [Key Performance Indicators] your directors look at??

1. What drives profitability for your company???

1. What is driving any under- or over-performance vs budget for your company this year??

1. What are your competitors doing – and how do you compare to them??

1. What do your customers want? Is this changing??

Business Acumen: Key Factors?

Business acumen has a number of factors informing it:?

• A big picture view – an understanding of your business and its processes. How and why do things get done??
• Financial understanding of your business. Where is the money coming from and going to? Is there a return??
• Which of your potential projects is likely to have the biggest impact??
• Effective decision-making.?
• Ability to reach agreement with stakeholders around the best course of action.?
• The ability to deliver the right outcome.?

Practical Skills for Business Change Plans?

You’ll need a number of practical skills and abilities to underpin your business change plans:?

• Financial insight. Companies often look at revenue or profitability as a barometer of performance. You need to be familiar with your company’s P&L to understand how and where money is spent and received in order to drive the business forward.?
• An overview of your organisational structure. What are the processes underpinning your business? What levers are there to pull and how can you pull them? Additionally, what are your stakeholders tasked with delivering? How does this impact your plans??
• Being comfortable with ambiguity. An ability to operate where there is ambiguity, or missing information is key. It’s rare to have all the facts available to us, so how can you use what you have to make the right decisions? This is especially important as businesses become more agile.?
• An understanding of impacts. If I increase the cost of this product by 10% my profitability increases, but number of sales is likely to decrease. If my sales target increases by 15%, how do resources need to be redeployed or increased to achieve this? We need an awareness of likely impacts so we can prepare solutions.?

With all of the above in mind, the most important question to answer is: what are you trying to achieve? A lack of clarity on this answer can mean that we end up replicating parts of existing, ineffective processes rather than addressing the end goal. We have to be outcome focused in order to be effective.?

In summary, if we are working in business change, this has to be underpinned by business acumen. If not, we’re missing the most crucial element of the story.?

AssistKD runs a Business Acumen course, which counts towards the new A4Q Service Designer qualification.?

Love learning? Check out AssistKD’s wide choice of business analysis training courses and classes.?

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