Business acumen is keenness and quickness at understanding and dealing with business situations in a manner that is likely to lead to a good outcome. (Wikipedia)
There is a new elite group emerging—those who quickly grasp changing business dynamics and the potential of innovation, people who quickly use their insights to create and deliver value to customers. Their influence and careers are growing.
The situation confronting virtually all businesses is rapidly shifting business dynamics, especially the impact on what customers find meaningful and valuable. The ability to make sense out these dynamics and add value to customers is critical to sustainable profits and growth. This acumen is the new black in business acumen.
A small percentage of people of have a greater tolerance for the ambiguity brought on by change and a natural aptitude for seeing new possibilities. This puts them in demand. Although everyone has some of the required cognitive resources, for many they need to be dusted-off and revved-up. Systematic use of social software can become a prime environment for this enrichment.
It is easy to see how this business acumen is relevant to businesses involved in strategy and innovation. However, new thrusts will bear limited fruit unless there is innovation and alignment of business practices that deliver the new promise. This requires employees to display similar acumen.
Traditionally, most companies are organized around standard operating principles and focus on executing these principles. Employees are rewarded for compliance and execution. As Robert Kegan puts it in his book, Immunity to Change, for many, being a good team player is a form of social compliance, a deep seat ethos. Now innovation and change external to companies forces them onto new playing fields with new rules where social compliance becomes a liability. In order to understand and play by these new rules, everyone needs to engage in what Kegan calls self-authoring. They have to make mindshifts, to develop a new psycho-logical framework that enables them to embrace the new dynamics. This happens within employees, not something done to employees and for it to happen they need to be engaged.
Employee Disengagement Compounds the Problem
The high and rising levels of employee disengagement add to the challenge. Disengaged employees execute tasks but take less responsibility for roles. Today’s model for success requires employees to be actively engaged in adapting to changing business conditions.
The type of engagement that remedies the situation is implicit learning. When employees are given and accept roles, external change can be seen a disruptive to execution their role is a business as usual fashion, something to content with. Or, they can seek to understand the implications of change on their ability to improve their ability to execute their role, the foundation of implicit learning.
In the best case, employees have a shared goal and interact to insure their overlapping roles are aligned. In a fast-changing business climate, this goal should be to create and deliver value to customers. But customers are also impacted by change in their milieu and this impacts what they find of value and what is relevant. Strategy or creating new possibilities to create value is essential to sustainability but so is the ability to innovate a company’s ability to deliver on the new possibilities. This requires employees with the quickness and keenness to innovate and execute in new ways – the new black in business acumen.
Interdependence is Rising, Get Good at It
This notion of employees having overlapping roles and the need to align these roles to a common purpose warrants some more discussion. Certainly this has always been a consideration but now the interdependence of employees has taken on new meaning.
“What percentage of the knowledge to do your job is in your own head?” At that time the typical answer was 75%. By 1997 it dropped to below 20%.
A study by Robert Kelley of Carnegie Mellon University illustrates why the ability to nurture and exploit networked brain trusts is so critical to business acumen. In 1987 he asked people, “What percentage of the knowledge to do your job is in your own head.” At that time the typical answer was 75%. By 1997 it dropped to below 20%. Information overload, knowledge explosion and disruptive change have all accelerated since 1997. Now, for employees to do their jobs requires highly functional connectedness. Yet, many organizations/employees approach work as sequence of tasks to be handed-off.
Networked Brain Trusts
Being connected has always been a virtue, but now there is a huge pay-off for being connected to people who know things you don’t, people who think differently and have different perspectives. Social networks or Networked Brain Trust can enhance one’s ability to learn from others. Diversity is not about the number of connections and it less about answers. It is about skillfully pulling together perspectives and insights in a way that facilitates an individual ‘s mindshift process—the mental shift that enables that individual to understand new and emerging dynamics and work with them.
An interesting thing happens in networked brain trusts—you can’t be a passive participant and expect to gain the maximum impact. First, those who do not engage in discussions are left out of the really interesting conversations. Second, the give and take incubates the desired acumen. Active participants gain a continuously growing edge.