Rethinking Business Acumen

TL;DR;?

We characterize the best business persons and entrepreneurs as those who were born with a basket of skills called “business acumen.” In reality, a business acumen mindset can lead to a reality where your work and life become transactional. It is better to empathize with multiple stakeholders impacted by the decisions you have to make.?

Chris:?

As leaders, we are called on to make many daily decisions.? Most decisions can be made in just a few seconds. Some take a little longer and need a lot more thought. I’ve had bosses who would say that the best decision-makers had business acumen.? As I soon learned, they meant that business acumen encompassed?making the decision that was best for the company. More to the point, it meant making decisions that optimized profitability.? As I’ve progressed in my career, I’ve learned that making decisions is much more than having business acumen.?

Hamza:?

Chris, I’m understanding that during the early arc of your leadership journey, you learned that people often characterize elite business performers as finance-savvy. Over time, your experience taught you differently. There is far more to business than the balance sheet. Your remarks echo a lot of the sentiments that celebrated doers and thinkers around the world have shared. From Nelson Mandela to Richard Branson, these people seemed to have an urgency centered around their missions. Profit was an afterthought.??

Now I’m wondering. Why should young business professionals launching and building their careers care about more than the profits they generate? They might argue that without profits, it is hard to keep score.?

Chris:?

Why does this matter to you?? If you don’t figure this out, your business acumen-focus will invade your entire life. ? From a business perspective, a profit-first focus will lead to transactional relationships and very few repeat customers.? As you progress in your career, you will notice your circle getting smaller because you will have alienated many of your coworkers and peers. People are intelligent; they will quickly sense that you prioritize profit and not fostering important relationships.? From a personal perspective, you will avoid taking vacations because vacations cost money and taking time off reduces your Paid Time Off (PTO) balance.? ? You will avoid time-consuming medical procedures.? You may end up divorcing or breaking up multiple times because you haven’t spent adequate time listening to your partner.? If you do have kids, they will probably not want to spend time with you when they are grown. In fact, a big part of their alienation will come from their memories of you not being there during their childhoods. You were at the office or on the road focused on work and saving the company a few dollars.??

Hamza:?

My experience reflects this as well. I recall that in sales, I performed the best when I truly believed in a product’s ability to change people’s lives for the better. I could not easily sell a product that didn’t work, no matter how savvy the marketing behind it was. When it comes to the customer, I believe in doing right by them. A brand is more than a moniker or a USP; it’s a promise that opens the door to a lasting relationship.?

Chris, what are a few examples from your life that cemented your belief that business acumen is not the be-all and end-all of a successful career and indeed, a rich life??

Chris:?

• A few of my retired friends were so proud that they saved so much vacation and sick hours to the point they bragged about who had the most bank of vacation and sick leave. ? A few of them became ill right after retirement.? They now discuss how they should have used their vacation and sick leave while they were in the workforce. In doing so, they would have enjoyed more time with their families and recharging. Being an executive is very stressful and can take a toll on your overall mental and physical health.???

• Another coworker walked with a terrible limp.? I asked him what was wrong. He said he would not take time off to get his knee operated on to fix it.? He was one of the people who routinely overused the term business acumen.??
• A Senior Vice President who was on travel with two or three other people asked everyone if they wanted to get two hot dog combos to share.? The others went along but to this day, they all separately tell this story to make fun of how cheap he was. ? Funny thing is he ended up getting fired and his wife left him and remarried.? Even though he is a multimillionaire, he allowed the other man to carry insurance on his kids.??

Hamza:?

Many well-meaning young people, myself included, start out with a desire to prove ourselves with metrics. We aim to show how our actions generate revenue and cut costs because it validates our worth in the business world. I imagine that the people in your cautionary stories also started out their careers as young, well-meaning individuals.?

Chris, what’s a better process? How does someone learn to make a real-world impact without wielding finance as their only measure of success??

Chris:?

A better approach is to expand your thinking to reflect stakeholders.? Stakeholder theory considers the varied individuals and groups that business choices affect. So, instead of focusing on maximizing profits, work towards understanding stakeholder interests.?

While there are many ways of implementing this process, I find that the best way is to write out the decision which is being made. Next, list each stakeholder and the value or non-value it provides to that stakeholder group. Lastly, describe how you might appease that stakeholder group to ensure overall success.??

Hamza: That seems like a thoughtful process that factors in the people impacted by a decision.