Chapter 4Understands the Business

In the Middle Ages, people considered chicken soup an aphrodisiac. The market demand for sexual stimulants has been a business driver for enterprising individuals and organizations throughout time. But before you simmer small white dumplings with libido-boosting chicken broth, consider the many other entrées or ingredients thought of as aphrodisiacs at one time or another in history: clams, oysters, eggs, celery, and stimulating avocados, to name a few.

In December 2015, The Economist magazine published a story about a Tibetan love drug called yartsa gunbu. It is a fungus, and the business of gathering and selling yartsu gunbu, according to The Economist, has brought “unprecedented wealth to rural Tibet.”2 In a 10-year span, the return on sales of yartsu gunbu has climbed more than 17 times its original price. Sharp business acumen can stimulate higher revenues, regardless of the product or service.

Generates Business Insights

Organizations thrive when their leaders grasp the financial impact of every decision, whether it is a small operation in the Tibetan Plateau or a much larger team of managers elsewhere in the world. The ability of managers to generate business insights and to improve productivity and process efficiencies can be and should be developed through training and experience.

“Two circles depicting business acumen model, where four key elements of business acumen: (1) organizational drivers, (2) organizational performance, (3) external factors, and (4) future trends are represented on the circumference of the circles.”

Figure 4.1 Business Acumen Model

Business acumen is ...

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