One result of "flatter" management structures is that more and more managers are being placed in positions where they have a big influence on the success of the business - without always being aware of it.
Make a mistake with pricing, for example, and while it might seem the firm is busy and successful, it may be there's no profit to show for it. Miss an opportunity in the market place, and the competition will be jumping ahead. Making business decisions always involves some risk, but what does it take to make the "right" ones?
Always knowing every detail of a business operation and its markets? A sixth sense? Character is the key, according to John Cavill, acquisitions and business development director at Datatec. In the space of 10 years he had built a business which was sold for several million pounds - before rejoining the company on its board.
"Business acumen is not just about vision and knowledge. There are three kinds of people in the world: those who never recognise an opportunity; people who can see an opportunity but don't have the courage to do anything about it; and then there's the other group, with business acumen, who see and do," he says. Mr Cavill is a guest lecturer of a business acumen programme at Henley Management College, where he brings his knowledge of the strategy and processes needed for growing a business. The five- day course sets out to develop the supposedly elusive qualities of business acumen, demystifying the term and providing a practical tool kit of techniques to identify risks and spot opportunities. It is particularly aimed at specialists who have made a success of their roles within the finance, IT or marketing departments, and who have shown a spark of potential for general management.
"Within any large organisation there are many people in specialist functions who have the capability and personality to operate at a more senior level in a general management capacity. It is the skill of the appraisal process to find these people and to give them the tools to develop their potential," says Steven Jenkins, another speaker on the programme. In 1985, after seven years in the marketing department of confectionery giant Mars, Mr Jenkins started his own direct marketing firm, SJA Direct, which he built up until it had a pounds 10m turnover and substantial profits. In 1997 he sold it to Brann, the world's largest direct marketing agency, where he is now vice chairman.
Delegates on the business acumen programme run their own businesses for a week in small groups, and have to tackle all the challenges faced by a chief executive. The simulation is based on real-life figures from a UK manufacturer (and data from the fluctuating pressures of the UK economy) and allows delegates to compete against each other within the same market. Success is judged on whether the new CEOs meet the objectives they set for themselves. Problems and obstacles in the running of the companies are used as opportunities to introduce the skills and knowledge that managers need.
These skills range from the basic to the sophisticated. For example, the programme introduces managers to the art of interpreting financial information, enabling them to read details of movements of share prices, earnings per share, dividend cover, exchange and interest rates, and turning them into information which will help with understanding the progress of the firm, and inform their decision-making. At the other end of the scale, managers have to learn to appreciate and deal with the human consequences of their commercial decisions.
When they try to implement tough new working practices, or shave costs that affect the working lives of employees, they also have to know how to communicate their reasoning to the workforce. A member of faculty acting as a trades union official helps keep the delegates on their toes whenever they become too heavily focused on pounds rather than people. Other skills include commercial negotiation, developing and applying a business plan, and different models for increasing profitability.
Presentation can be as important as the business results themselves. Whether the figures are good or bad, managers need to know how the current business performance translates into share price and prospects according to forecasters and analysts, and to present results in a way that shows the business in its best light.
Using their knowledge, managers are able to make informed interpretations of where the business is going. The programme is not intended to encourage people to start their own businesses, but to bring some much-needed entrepreneurial rigour and ambition to the way existing businesses, both large and small, are already run. Previous programme delegates have included people from Passenger Train Services, Burger King, and Tetley, as well as a sales manager, training manager, and managers from venture capital and trucking companies.
"People with the right personality and outlook will be entrepreneurial whether they have their own firm or are inside corporate business," says Mr Cavill. Mr Jenkins adds: "The key skills in business acumen are about doing the simple things, the kind of basic attention to detail that an entrepreneur will always look for, but which can get forgotten in large organisations.
"Take cashflow. When someone is starting up a company, he or she will be constantly watching cashflow and overheads - it's the lifeblood of the firm's continued existence but managers in bigger companies can be accused of taking it for granted."
Roger Martin-Fagg specialises in corporate strategy and economic forecasting and analysis, and is author of `Making Sense of the Economy'. The Business Acumen programme runs from 11-15 October at Henley Management College. Fees are pounds 2,600 plus VAT, including accommodation. More information is available from Sharon Crabtree on 01491 571454, email@example.com.Reuse content