What sets sales leaders apart from everyday reps? Why are some salespeople more effective at closing deals? And how do some reps skyrocket their career growth? The answer is simple: Business acumen.
It's a term often thrown around boardrooms and blog posts, but today, I'm breaking down exactly what it is, why it's important, and how you can develop it.
Definition of Business Acumen
Business acumen is the ability to combine experience, knowledge, perspective, and awareness to make sound business decisions. It's the practice of good judgment and the capacity to consider a holistic, long-term view of organizational needs.
Business acumen goes beyond just "having a head for business." It describes a strategic outlook that creates business advantaged. At its core, business acumen is the ability to combine experience, knowledge, perspective, and awareness to make sound business decisions.
The development of this ability leads to better judgment and allows you to view organizational needs in a holistic, long-term way.
Put simply, business acumen is when you make decisions that don't just benefit your company today, but also months or even years in the future. It means you can think strategically about an interconnected landscape and implement activities to leverage that knowledge for present and future success.
Why Do Salespeople Need Business Acumen?
It makes you a better internal collaborator.
In today's hyper-connected world, the "lone-gunslinger" model of sales is no longer effective. Salespeople need to work within the context of their organization as a whole. In other words, you've got to do your job well today, while considering how to benefit your company in the future.
For example, if you close new business by regularly offering heavy discounts, you might hit your sales number and impress your manager, but it puts your finance department in a difficult position.
Similarly, I see many salespeople over-promise features. The salesperson wins because they've closed the deal, but the implementation and customer success teams then struggle to deliver on those promises.
Make sure your actions positively impact and support your coworkers. It's good for your career and great for the business.
It helps you understand complex prospect situations.
If they want to learn about product features, service packages, and business benefits, your clients can visit your website. What they need from you is guidance and assistance. So, as technology infiltrates more of the selling process, it's important for salespeople to be consultative.
To be consultative, you must understand your prospect's business from their perspective. You have to understand how it solves the pain points of everyone involved in the buying decision.
If your champion is sold but needs manager approval, ask, "What are your manager's goals this quarter?" or "How is your manager measured on success?"
Ask questions about office culture, upcoming initiatives, and budgetary restrictions to get a holistic view of roadblocks your champion might face.
It trains you to think beyond the block-and-tackle.
Many salespeople take a "block-and-tackle" approach to selling. They're good at reacting and responding to day-to-day tasks and challenges but struggle to look or act beyond the immediate scope of their job.
This is fine if you are a salesperson who wants to stay in your role forever, but to avoid being pigeonholed, you need to move past a reactive approach to selling.
If you often receive the objection, "You've said your customer service team responds to client issues within three days, but we're really looking for a company offering same-day issue resolution," find out what your customer service team is already doing to address this objection, and bring your own ideas and strategies to the conversation.
Make sure to do this in a positive, collaborative way. If you're busy pissing off other departments, you'll make enemies instead of allies, and your good ideas will be worth very little.
Business Acumen Skills
To fully understand business issues and opportunities, there are certain skills to develop and organizational information to learn. Here are five elements to help strengthen business acumen: assessment, vision and discipline, emotional intelligence, experience, and learning organizational processes.
You should be able to look at a business situation and easily identify what factors are at play and how each fit into the bigger picture.
For example, if you're experiencing a high customer churn rate, the knee-jerk response is to solve for how this issue affects you and your commission. That's a start, but also identify when churn increased and what might have contributed to the rise.
Did your company recently change the pricing structure or product/service offering? Are you churning the right customers? Has your customer profile shifted? Is there a disconnect between customer expectation and reality?
Assess these situations and recommend strategies for moving forward. Want to take things a step further? Identify and solve for company challenges before they become a problem.
2. Long-term vision and discipline
Think beyond daily outreach goals and quarterly numbers. Consider your company's yearly and long-term goals, and align your actions and behaviors to support those goals.
If your company's goal is to attract a smaller group of more qualified, high-end customers, align your goals.
Challenge yourself to read three books about enterprise sales, find a mentor experienced in selling to high-end clientele, and take someone in your sales organization's leadership out to coffee to better understand the company's decision. Give yourself milestones and a deadline -- and stick to it.
3. Emotional intelligence
Business acumen is not only about meeting your own needs, but meeting the needs of your clients, your boss, and your company as well. If your sales organization has an administrative assistant who helps with paperwork, HR, or scheduling, find out how you can make their job easier.
Don't ungratefully shovel work to them or ignore their requests for assistance. Engage with administrative staff regularly, understand their goals, and help them achieve those goals.
Likewise, understand the administrative teams at your prospects' organizations often have a great deal of influence. Take a generous approach with clients and coworkers alike, and you'll see an improvement in your work relationships and career prospects.
Experience isn't just about … well, experiencing things. It's about learning from each experience and translating those lessons into concrete steps forward in your career.
If you fail, identify why you failed and what you learned from it. Take the 50,000-foot view, and let it change how you make business decisions in the future.
Miss your quota this month? Whining never endeared a salesperson to leadership. Instead, document why it happened, what you need to do to ensure it doesn't happen again, and what your next steps are. Share this analysis with your sales manager and impress them with your proactive approach.
5. Learning organizational processes
When a salesperson understands the systems that make a business run, the rules that govern them, and the work they can do to influence those processes -- that's business acumen.
If your sales organization shifts focus from medium-sized companies to attracting enterprise-level business, you might feel frustrated your pipeline is initially lighter.
Instead of worrying how you'll make quota, step back, work with sales leadership to understand the decision, and develop a plan for how you'll influence those business decisions for the better.
How to Develop Business Acumen
Find a mentor.
Network beyond the sales department.
Learn from your clients.
Learn about different management styles.
Understand your thought process and decision-making strategy.
1. Pay attention.
It's important for salespeople to develop situational awareness. Instead of only keeping your head down and doing a good job, pay attention to how things work at your company. What patterns emerge? What challenges do you or your colleagues face repeatedly? Identifying and solving for these situations is what will set you apart.
Is your company repeatedly losing business to a competitor because they have an integration you don't? Reach out to vendors offering this integration and facilitate a partnership. Pay attention to business challenges and be the first one to present a solution.
2. Find a mentor.
Don't expect to find one mentor who's good at everything. Instead identify several mentors, each an expert in a certain area.
Know someone who has a sales career you'd like to emulate? Ask them to mentor you on next steps in your job. Is there someone in your organization who expertly closes enterprise deals? Ask them to work with you on your selling. Surround yourself with supportive mentors and improve several career areas at once.
3. Network beyond the sales department.
To make good decisions, there will be times when you need to call on experts for advice and help. From marketing and accounting to HR and legal -- having contacts in each of these fields will be illuminating and helpful when you need their expertise.
Working with a prospect facing difficult marketing challenges? Think beyond the sale and ask your outside marketing contact for perspective on your prospect's situation. If you bring construction ideas and solutions to the table -- you'll definitely stand out from your competitors.
A salesperson who doesn't read, listen to podcasts, or read industry material isn't going anywhere. You should have a steady pulse on trends, influencers, and education in your field.
But don't limit yourself to sales material. Read books on other areas of business, psychology, or economics. The lessons you learn from these subjects can be just as impactful on your work as the latest business book. Always be learning and your career will never stop advancing.
5. Learn from your clients.
Rely on your client relationships to gain insight into the company's operations. They know their business inside and out and are often happy to share information with you. Here are a few questions you can use to start the conversation:
How do you find qualified candidates to hire for X position/department?
What are the key elements that contribute to your excellent customer service?
How does your business adjust its financial strategy if there are budget concerns?
Are there any essential attributes you look for in a successful manager or leader at your company?
Not only will you further develop your business acumen, you'll also be building rapport and strengthening the relationship between you and the client.
6. Learn about different management styles.
Each company uses different styles of management and you'll have a better grasp of its operations if you understand the management processes the business relies on. There's more than one way to solve a problem, and you'll learn the different approaches management can take when faced with a business challenge.
Take a deeper look into how various management styles tackle planning, decision making, and performance measurement -- and think about which styles would work best for your business and sales team.
7. Understand your thought process and decision-making strategy.
How do you analyze situations? What's your go-to problem-solving strategy? Having a clear sense of how you think about a challenge, whether it be a business or personal dilemma, will help you identify your strengths and weaknesses in critical thinking and reasoning.
For example, are you reflective when presented with a problem? Or do you analyze the issue and make decisions quickly? See how your style fits with people who might use a different process identify and pick solutions. Reflecting on your own thought process will give you a better understanding of interpersonal dynamics, both with co-workers and prospects.
Business acumen is the end result of hard work, dedication, and persistence. It's what happens when you have grit, show up consistently, and do the work. It's the byproduct of self-aware activity, and it's available for anyone willing to put in the effort.