Business Acumen

Business acumen is basically business knowledge and terminology. The more you know, the broader your capacity. According to a study published in Human Resource Management International Digest titled Business Acumen: a Critical Concern of Modern Leadership Development, global trends accelerate the move away from traditional approaches, revealing why traditional leadership development approaches, which rely on personality and competency assessments, are failing. The paper demonstrates the importance of business acumen in leadership and contends that business acumen impacts leadership development and HR agendas. Research into this relationship resulted in the creation of the Perth Leadership Outcome Model, which links financial outcomes to individual leadership traits. In a study that interviewed 55 global business leaders, business acumen is viewed as the most critical competency area for global leaders. In their 2011 work, The Leadership Pipeline, Ram Charan, Stephen Drotter, and James Noel study the process and criteria for selecting a group manager. This suggests that the process and criteria are similar for choosing a CEO. They contend that an obvious criterium for selecting a leader is well-developed business acumen. Organizations with managers possessing business acumen can expect leaders with a heightened perspective that translates into an ability to inspire and excite the organization to achieve its potential.