Business Acumen Essentials to Sharpen Your Skills and Improve Results

The message is clear, concise, and specific—healthcare must improve quality, lower cost, and broaden access. Healthcare leadership at every level is tasked with achieving these conflicting goals. No medical practice is immune from these mandates demanding leaders sharpen their business acumen. Business acumen is the capability to bring about positive results or outcomes. Sharpening your acumen starts by acknowledging that your behavior can directly affect and improve business outcomes. Improved business outcomes are achieved when quality improves, costs are lowered, and access broadens.

Sharpening your acumen starts by understanding how you respond to financial cues and signals.

The market has developed three approaches to developing business acumen: financial literacy; business simulations; and behavioral tools. Having a high degree of financial literacy has nothing to do with saving or making money. Money is the measure, not the cause. Business simulations are fun and informative, but they rely on the participant to make the connection between the activity and the outcome. Simulations often get reduced to games played for sake of the game. Behavioral tools start with the assumptions that different individuals respond to financial cues and signals differently. Sharpening your acumen starts by understanding how you respond to financial cues and signals.

Desired Outcomes of Development

Embarking on a journey to improve your business acumen should start with a clear understanding of what a program should and should not accomplish. The first obstacle to improved acumen is recognizing that you might be the obstacle to positive change. You must be aware of your impact on results and how changes you make can impact the results positively. The tone of the culture in every practice or healthcare system is strongly influenced by leadership. Your stakeholders are watching you.

Business acumen is not financial literacy. Financial outcomes measure the functioning of our processes and systems. Fixing the financial outcomes hinges on improving the processes and systems that produce the results being measured. Developing cost-consciousness occurs when you know how and where to make cost–value trade-offs. Cutting costs and saving money matter, but being “penny wise and pound foolish” is common everywhere. Before you invest, or cut cost, ask what the ultimate impact of your action will be. Money is the measure, not the cause, and changing measures does not change the value creation formula.

The drivers of value are related to the people in every organization, not the way the organization keeps track of money. Organizations pay for development because they want to produce sustainable impacts on organizational performance. Practice management is a team sport, and the best teams have excellence in coaching and players. Behavioral business acumen development is essentially a program to develop team effectiveness.(1) Healthcare leaders are embedded in networks of value creation connected to many nodes. The breadth and diversity of the connections enjoyed by leaders make them central players, but they are only as good as the team. Alignment and integration depend critically on the effectiveness of the team.

The goal of any effort to improve your business acumen is not about changing your personality, but about taking sound actions that deliver results.

Business acumen happens when you are more aware, sensitive, flexible, adaptable, and focused on integration and alignment. Integration is not taught—it must be learned; and it takes place during team interactions. Developmental interactions are dynamic and fluid exchanges. Practice managers link business needs with people’s talents—you give people the opportunity to use their strengths and have the greatest impact. Making the right decisions and taking the right action are cultivated and developed deliberately. The goal of any effort to improve your business acumen is not about changing your personality, but about taking sound actions that deliver results.

Do You Play to Win—or Not to Lose?

When are you likely to be effective or ineffective? Effectiveness is best achieved when the person is matched to the job. A good fit between person and job should lead to improvement in motivation, and a bad fit can undermine motivation. Myriad personality typologies are available, but they do not predict how you will perform, or if you are a good fit for a given set of circumstances. A personality attribute that can predict performance is whether the person is promotion or prevention focused.

Motivation focus determines how a person meets the demand and challenges of life. Promotion-focused people like to create pathways to advancement and are willing to take the chances to build roads in the wilderness, whereas prevention-focused people want to repave the existing roads and see the wilderness as dangerous. What we attend to reflects our preferences, values, and strengths and is the basis of the very different ways people manage life(2) (Table 1).

Developing your acumen starts with being aware of yourself and others to leverage your strengths while minimizing your weaknesses. Every organization needs a mix of promotion- and prevention-focused people to maximize organizational outcomes. The best tool to resolve the conflict between the goals of reducing cost, increasing quality, and broadening access is innovation. Knowing what energizes or limits you and your team will allow you to create the constructive conflict necessary for innovation to emerge.

The best question to ask is “How can we bring out the best in each other?”

Dysfunctional or poor communication, infighting, and the “grab bag” of organizational issues will emerge and must be dealt with transparently. Your team needs to excel at innovation while exploiting what works in a healthcare environment that is increasingly dynamic and unstable. The best question to ask is, “How can we bring out the best in each other?” Developing your practice depends on developing your team, and cultivating your business acumen is a pathway to excellence.

You are the Leader You Are

The presses have been rolling, hollering at you to be charismatic, authentic, or transformational—and instead I suggest you just be you. What matters is making good choices and taking steps to deliver the necessary results. Whether you deliver a smooth and persuasive talk at the next meeting is not nearly as important as telling your story honestly and substantively.(1) Invest your time and energy in getting to know your team, recognizing their strengths, and being honest with yourself about your own strengths and shortcomings. You might have to spend some time accepting yourself for who are to be fully capable of realizing your potential.

Why do your patients come to your practice, and why do your employees choose to work for you? You have to ask yourself tough questions and demand meaningful answers. Telling your story is not possible if you spin a yarn from your imagination. Is your practice a destination or a rest stop? In the days of Yelp, the ratings culture continues to gain momentum. Your story is being told, and you cannot control the dialogue, but you can control the experience. Awareness is central to the development of business acumen, and expanding your awareness is directly related to the questions you ask yourself.

Taking charge of your development and asking better questions can be difficult if you don’t know where to start. Noted business scholar Ram Charan(3) suggests you have to build your “know-hows.” Building your capability can be achieved by focusing on one or two know-hows. These eight areas can help you think about which know-hows to develop:

• Positioning and repositioning: Understand the central idea that meets customer demand and creates value.

• Detecting patterns of external change: Make sense out of complexity and prepare your practice.

• Managing the social system: Link action to results and incentivize the right behaviors.

• Judging people: Find the truth of a person and help them unlock their strengths. This is key to improving productivity and organizational capacity.

• Molding a team of leaders: Encourage people to realize their potential and take leadership at every level.

• Setting goals: Strike the right balance between realism and reach when setting goals.

• Determining priorities: What should you be focused on and why? Think about impact.

• Managing external forces: What is your plan to manage what you cannot control?

You cannot do this alone—it takes a team. Seeking and giving meaningful and authentic feedback is critical to determine which know-how you should focus your efforts on developing. Your practice exists because you create value for the people who come through your doors for service. Start there, start with the patient as the key stakeholder. Become a destination, not a rest stop.

Transformational Learning

Examining and engaging with practice and experience as they occur is known academically as transformational learning. Developing your business acumen demands learning from your experience and your practice of following and leading. Petriglieri et al.(4)assert that learning from experience is an active, personal, and social process. Our learning is shaped by experiences, assumptions, and the stories that define a person’s narrative, and it determines the inferences a person will draw from what they are experiencing. The key outcome of any personal leadership development journey is to make new meaning, and draw more meaning from the past.

Learning is traditionally informational and functional, but learning skills and expanding your knowledge will not lead to improved business acumen. Reflection on what has occurred and is occurring and how you are experiencing the phenomenon is essential to improving your reaction. You will make new meaning when you make connections between who you are and what is happening. People are not generally open to questioning their identity and career aspirations, but at times of transition, people become more open. Transformational learning can be summed up by the dictum “know thyself.”

Conclusions

Developing your business acumen is directly related to developing your self-awareness. If you want improvement, you have to change the way you look at your interpretations to have a different impact. Stop competing with people and open yourself to being vulnerable to create trusting relationships.(5) Business acumen is not a “me” journey; it is a “we” journey. Your most powerful relationships are the ones where you are the most exposed. Achieving the conflicting goals of improved access, lower cost, and improved quality demands effective and innovative collaboration. You have to get close to get better.

Business acumen is the ability to bring about positive results. Business acumen isn’t about business at all—it is about judgment and determining what to do and when to do it. You start by asking yourself about how you create meaning from what you are experiencing and taking the time to listen to the response. In a busy and chaotic world it is easy to toss reflection aside when you are tired, stressed, and overwrought. Perhaps it is worth considering that you might be able to free up time if you have a clearer vision of what you are doing, why you are doing it, and who you are doing it with. Take the time and “to thine own self be true!”

References

1. Prince ET. Building better business acumen, Chief Learning Officer. 2010;9(8):40-43.

2. Halvorson HG, Higgins ET. Do you play to win or to not lose? Harvard Business Review. 2013;91:117-120.

3. Charan R. Business acumen: get the right people in the right jobs. Leadership Excellence. 2010;27(9):3-4.

4. Petriglieri G, Wood JD, Petriglieri JL. Up close and personal: building foundations for leaders’ development through personalization of management learning. Academy of Management Learning & Education. 2011;10:430-450.

5. Merten G. Leadership is sourced by a commitment to personal development. Reflections. 2002;4(1):22-29.