Business Acumen: What It Is and How to Develop It

To succeed in or work in any area of business, you must understand how a business works, the intricacies of running one, and the strategies involved. To do this, you need to develop business acumen. 

Discover why business acumen is important to your career, which careers may especially benefit from it, and how to develop yours. 

What is business acumen?

Business acumen is an in-depth understanding of how a business works, including its functions, strategies, operations, and how it fits into a wider marketplace. This kind of knowledge means you can make logical, business-related decisions and take on different roles within a business. Business acumen, much like business operations themselves, is extremely multifaceted. Rather than a single skill, business acumen is a set of skills, honed through knowledge and experience that, together, allow you to perform well in a business environment. Business acumen skills might include strategic thinking, communication and influence, analytical capabilities, leadership, and financial knowledge. 

Developing business acumen happens over time through learning and experience. You can learn skills relevant to your business acumen through degree programs, business courses, or professional business experiences. 

Why business acumen is important

Understanding how a business works is essential to contribute effectively to it. Knowing and engaging with a business' mission, goals, and operations and sharpening your understanding of the market and business strategies can give you a deeper understanding of your role and how it fits into a larger business model. For example, creating marketing material is a skill, but doing so with a clear sense of the purpose of marketing, the target customer, and a wider knowledge of the marketplace shows business acumen. 

Companies look for employees who can demonstrate business acumen, especially when hiring for leadership positions. Companies need employees with good business acumen to drive the business forward, and for employees, business acumen often leads to career advancement.  By developing your business acumen, you may find your professional opportunities increase. 

Careers that require business acumen

Business acumen can be a powerful asset in any role. However, business acumen skills are essential for some roles, such as leadership positions in a company where strategy and business development play a big part. These include top-level positions such as C-level executives, managers, financial officers, and leadership teams. 

Read more: What Does a Business Development Manager Do?

How to develop business acumen

You can develop your business acumen through experience, academic learning, and observation. You can hone important skills as you study coursework, take part-time jobs, and launch your career. Business acumen is something you will continue to develop throughout your professional life. 

Focus on learning.

You can improve business acumen through learning, which comes in many forms. Take on any opportunity you can that can help you learn about business and keep you updated with relevant trends. Books, podcasts, videos, and online content about business are a great place to start. 

Learning about the business you work for can also benefit you. Understanding the company's mission, goals, business model, history, and place in the market may help you better understand and manage business decisions. 

When learning, stay open to all opportunities. Business acumen is cultivating a skill set, so focus on learning various workplace skills to contribute to your overall business acumen. 

Find a mentor.

Observing and spending time with someone more experienced than you in your field is a great way to learn. When it comes to understanding business, you can learn a lot from the people around you who are already succeeding. Finding a mentor or joining a mentoring program allows you to benefit from the guidance of someone who knows business practices well. This might be someone you work with or someone outside of your organization whom you admire. 

Read more: How to Find a Mentor and Grow Toward Your Goals

Gain a variety of work experience.

One of the most effective ways to learn is by doing. You might gain experience through college internships, employment, shadowing, or entrepreneurial activities. Learning on the job allows you to put your skills into practice as you deepen your understanding of business operations. 

When it comes to learning business acumen through experience, variety is key. By engaging in experiences in different businesses, industries, and positions, you can pick up a spectrum of skills and knowledge and see things from various perspectives. Cross-training across different departments is a great way to get to know every angle of a business.

Talk to customers.

Understanding what customers want, why they engage or don’t engage with a business, and exactly who your target customers are is essential. Strategies, operations, and marketing all depend on this. Talking to customers may greatly improve your business acumen.  

Take a course.

Education is a worthwhile place to start to develop your business acumen, and continuing education can drive professional development for those already succeeding in business. University or college degrees in business often aim to build business acumen for career success and include relevant coursework. 

However, a degree is not the only way to learn business acumen. A range of online and short courses are available, and many businesses offer in-house training through workshops and other development programs.

When looking for courses, look beyond those specifically focused on business acumen and find coursework that concentrates on the workplace skills that contribute to business acumen, such as leadership skills, communication, problem-solving, marketing, and financial acumen. 

Getting started with Coursera

Whether you have an established career or are just starting out, business acumen is an important skill set to develop. Rather than being purely academic, business acumen will reflect your unique work experiences and personal interests and how these influence your understanding of business processes. 

Consider developing your business acumen through a business course available on Coursera. The Introduction to Business Specialization, offered by the University of California Irvine, aims to help you build an understanding of consumers, finance, marketing, and leadership. You can also complete the Financial Acumen for Non-Financial Managers course to help you effectively build tools to work with financial data.