Business Acumen

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, reveals why traditional leadership development approaches, which rely on personality and competency assessments as the scientific core of their approach, are failing. The paper demonstrates the importance of business acumen in leadership-development approaches and contends that business acumen will have an increasing impact on 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 was cited 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 and suggest that the process and criteria are similar for selecting a CEO. According to them an obvious criterium for selecting a leader is well-developed business acumen.

In an organization full of high business acumen individuals can expect to see leaders with a heightened perspective that translates into an ability to inspire and excite the organization to achieve its potential.