We surveyed Heads of Communications & asked them: in what competency does your team need the most improvement? The resounding answer (63% of all respondents) = business acumen. It’s the foundation of business acumen that helps communicators dissect business partner needs into successful communications support and it serves as a prerequisite to getting that coveted seat at the table.
However, as someone who has “business acumen” as a performance criteria in my annual review, I often struggle to quantify WHAT it actually means and HOW I can get better at it. On our Competency Framework (access the entire Modern Communicator’s Skill Set here), we’ve defined business acumen as:
An understanding of my company’s strategy and “ecosystem,” including global trends, macroeconomic shifts, and regulatory changes.
My common approaches to improve my own business acumen have been to (try to) read dense articles in the Wall Street Journal and Financial Times and, more recently, to watch the film, Too Big To Fail on HBO (which I HIGHLY recommend).
While these tactics help, I think the onus is on us as individuals to constantly look for ways to get more exposure and business education. I’ve provided a few ideas below – based on research & conversations with CEC members.
1) Educate Yourself. Do you know the difference between net worth, net income, profit, revenue, capital, and equity? How about the definitions of: options, swaps, futures, derivatives, multiples, and value investing?
You can start speaking the language of your business partners by at least knowing the definition and application of these and other business terms. Get comfortable with the components of a balance sheet. (FYI: If anyone wants a short cheat sheet of business vocabulary, I’m currently studying for Pre-MBA tests before I head to school this fall and would be happy to share!).
Complement this fluency with regular skims of the WSJ, FT, and NYTimes. And it’s cheating if you’re only reading the Sports or Dining sections.
2) Learn from Others. Shadow others and learn from leaders in other functions. Here’s a great lesson from one of your CEC peers, Craig Rothenberg at Johnson & Johnson. During a recent CEC webinar, he shared the following advice:
About a dozen years ago, I was given one of the best pieces of professional advice from a former manager as I was moving into my first operating company management role.
I was told to take the first six months or so in my role and to develop a mentorship relationship with the CFO of that operating unit. I would meet routinely with the CFO of that business…and we would dive deep into the P&L of that business. I then branched out and did the same with our supply chain leader in that business. It really helped me to get grounded in the business, the various pressure points in the business. Seek someone out – a coach, a mentor, a colleague – who can teach you a part of the business that you haven’t been exposed to before.
And…it didn’t take me much time before I could actively participate in boardroom discussions. I could talk about the P&L, the pressure points, the cost of goods, etc. I could bring that knowledge through a communications lens and see the communications implications. And that’s where you start blending the business acumen with the ability to act as a trusted advisor in Communciations.
You’ve got to roll up your sleeves. There are no shortcuts.
3) Practice. Another recommendation offered during a past CEC guru meeting was to get yourself or your team involved in rotations in other parts of the organization to broaden your business acumen. Popular “destinations” for rotations include Investor Relations or Financial Communications. Others have done rotations in other geographies to fine-tune their business savvy.