It is only human to have a tinge of feeling at the seeming success of others in business. Often we put it down to luck.
We all have invariably met acquaintances perhaps from our past who may have at one time been mischievous or carefree individuals and we may – or may not have made a mental note that such people would not go far in life. We may have found later that they had done extremely well in some chosen field and shrug it off as luck!
Had it ever occurred to us that there may be other factors for an individual perhaps with little education or little opportunity to be able to reach heights of success and prosperity, whilst another individual, perhaps a fully fledged professional armed with several degrees was still struggling to strike the golden vein?
Was it meant to happen as forecasted at birth, or appeals to a deity, luck, personal endeavour or business acumen? What was the secret formula?
As Principal Consultant/MD of Executive Search Ltd./AIMS and a pioneer head hunter with over three decades of consulting, search and placement in diverse fields, I prepare to present a possible secret based on interesting observations made over several years.
Organisations at one time needed managers. The manager’s position was highly coveted as it elevated a person to the rank between top management and the working class. The manager was expected to have a good knowledge of the industry, be aware of international trends for the specific industry and issues that impacted them.
|We may all know the little boutique keeper who knows exactly what the consumer in the locality of his shop needs, makes sure he has a well-defined customer base, is able to deal with a small handful of competitors
The manager was the individual who was expected to impart theories, systems and principles of strategic business management of the directorate down the line. He or she was not particularly expected to lead people or direct production, logistics and operations to increase significantly the revenues of the organisation and it was this vacuum that led to the search for leadership driven managers.
Organisational heads began looking for managers with leadership drive to run a business efficiently with minimum use of resources whilst still meeting production requirements and achieving sustainable operational performance improvement. It became the manager/leader’s responsibility to deliver solutions on how revenues could be increased without significantly impacting the cost of the end product.
The manager/leader was also expected to conduct research, have extensive knowledge of local and international product processes and evolve value additions in the business process. Indeed the manager/leader was expected to produce not only quality management but performance reporting and even consulting since directing an operation may possibly involve at least 70% of running costs that had to be managed in a manner as to generate the 30% profit component.
Apart from knowledge, what else would be needed to guarantee the success factor of the enterprise? Undoubtedly it is the ingredient that the earth’s first businessman had – business acumen… that sixth sense that generates the vibrant drive that propels all successful businessmen and creates dynamic and thriving businesses.
Without business acumen – the slight but powerful edge over all educational and professional knowledge – no endeavour could succeed. Having interacted with individuals of various statures over three decades, I have watched with interest young and immature men emerge into success-driven entrepreneurs displaying acute business sense.
Is one born with business acumen or could it be acquired? I believe that some individuals acquire the quality early in life during competitive interaction with others, e.g. in a classroom or a playground. Such individuals have a naturally sharp mindset that could look at any situation with a different perspective and seek the best outcome from each such situation commencing with very minor achievements.
It is this competitive spirit that translates to an incisive mind and business acumen which coupled with strong professional credentials and self motivation, completes the individual as a master businessman at later stages.
Business acumen grows from an early age and encompasses all types of individuals. We may all know the little boutique keeper who knows exactly what the consumer in the locality of his shop needs, makes sure he has a well-defined customer base, is able to deal with a small handful of competitors.
He may mark down the price at the right time, ensure that he is stocked with the right merchandise, project the right attitude to his customers to make it the right shopping experience, constantly making adjustments naturally and intuitively to keep the cash flowing! You may have reflected on his warm and cordial manner and the personal touch he accorded to all his customers, naturally drawing them to his door.
You may have been amazed at the business acumen of the street cool drinks vendor had you a moment to watch him. Operating from a little hand cart placed at a strategic corner of the street, he may have just the right drink for the weather – e.g. briskly serving ice cold lemonade on a hot day.
He would draw a spoon against the bottles of brightly coloured liquids to provide a musical background to his verbal enticements. This clever individual would revert the little cart to a hawker street operation at night, playing smartly on the need of the hour, indeed running a very profitable operation with minimal operating overheads though it may not appear so.
What quality did he possess that you don’t? A deep question for those yearning to develop their business acumen yet holding back. What did the ordinary street hawker have that the well-educated, highly professional individual needed to acquire? I believe that it boils down to simple business common sense translating to understanding the customer’s need and the self confidence to take calculated risks.
No matter how good your product, no manner how good your arguments and selling powers, no sale would take place unless a person develops that uncanny knack of honing on what the other person is looking for and personalising that need. This becomes easier as one develops knowledge of the market by a hands-on market study commencing with the little details since a clear understanding of both sides of the fence makes for better business decisions.
Those with good business acumen would take the trouble to understand all aspects of the business very well, how it compares with others in the same field locally and overseas and a clear understanding of its place within other businesses.
Though one may not have been born with good business acumen, it could be acquired. It entails knowledge seeking – a continuous exposure to the latest trends not only in one’s niche market but in the general industry and excellent financial knowledge that would translate into an understanding of overall costs, expenditure, profits, financial analyses, financial projections and other financial strengths that are essentially high impact areas.
Those with inherent business acumen would have a natural interest in understanding the financial metrics and tools that gauge cost effectiveness, how key performance indicators relate to the profit and loss and cash flow statements, they would amass data that would enable them to make decisions that balance risk and consequences and develop skills in leadership that would enable them to keep team members together. These can be learned.
Good business acumen also involves creating an environment conductive to team empowerment so that team members understand and are empowered to take action where change is needed. Leaders would also use knowledge with personal power such as interaction with the wider segment of people not confined to one’s workplace or home as every interaction brings benefit if one were to look for it.
Can good business sense be imparted across the board to all members of an organisation and what would be the worth of such an exercise? Whilst according due admiration to those manning successful businesses, organisations need to develop each and every employee to have business sense and should make it an intentional operation to engage all employees and empower them to gain an interest in and improve financial performance.
One of the ways to achieve this is to ensure that all employees have a better understanding of the key drivers of the business and are made to understand how each employee plays a part in the whole operation.
Employees are introduced to aspects such as costs, quality (and the consequences of poor quality), competition, how their own business compares with competition to make money and how they could apply good business sense in their own areas.
The financial aspect is imparted in uncomplicated language – how the business operates from end to end, where the organisation makes money, where the organisation appears to lose money, where products are sold, operating strategies, new markets…
Employee leadership emerges when more people are exposed to how the company makes money and how competition can kill. When employees understand that what they do affects the financials of the business, they gain the ability to make educated decisions in their areas. They also gain the confidence to take action in their own spheres.
Front-line employees are also be encouraged to understand not only their own industry, but that of the customers, since this creates better understanding and empathy. Knowledge of own organisation’s risk factors as well as that of the customer, knowledge of the industry as a whole, and the country’s economy and how it impacts on each industry further deepens empathy.
Although business acumen can certainly be developed at any stage of one’s life, one of the best ways to learn is through hands-on experience with various business scenarios and challenges.
(The writer is Principal Consultant/MD of Executive Search Ltd./AIMS and a pioneer head hunter with over three decades of consulting, search and placement in diverse fields.)