Assuming you don't tend to come across this in your current job or formally study business.
What's the best way to increase general business acumen?
there is one simple process that can help you to develop business acumen in a time-efficient way (that is – spending 20mins per day). This is based on understanding first which are the most challenging concepts for you, and then work specifically on such concepts, instead of reading general literature on a topic. To do this, I would recommend the following:
- find some good consulting MBA handbooks. You can easily find several good ones online for free (eg Insead)
- do/read a minimum of one case every day. Chances are you find more challenging one specific industry/topic. Try to skim through the handbooks looking for that particular sector (eg healthcare or M&A). Don’t focus on the structure (usually they are not particular good in these handbooks) but rather on the concepts present in the case. Track all the terminology/concepts that are challenging for you.
- once identified concepts you don’t understand, look for more specific resources on that online. If for example you identify it is challenging for you to understand how the typical value chain for an industrial goods company is structured, you can easily find a good structure for it in a 10-minute online search. If you start from reading a book on industrial goods companies, you will of course cover that as well, but also tens of other topics that are not of interest, and spend 4-5 hours instead of 10 mins. This will allow thus to pinpoint the exact areas you have to improve in terms of brainstorming in the case.
Hope this helps,
There are many ways to develop your business acumen, and I've answered a similar question before on Preplounge. Some suggestions:
1) Subscribe to Finimize: They will send you daily updates with recent business/finance news, and explain what is happening (and why) in Layman terms. It's an excellent way to both stay up to date with most recent events in a couple of minutes (e.g. on the commute to work) and also improve your business acumen. If you want to go further, read through articles on the FT/Economist (but this will take more time)
2) Read up on some basic business/microeconomics: Any decent first year of University or even advanced highschool economics should do - to get the basics and understand some key terms (e.g. economies of scale, breakeven point, etc.)
3) Watch/listen to cases online: This is a great way to come across typical business problems from case interviews, and how to approach them! If you run out of cases to listen/watch, you can also pick a case book online/preplounge cases and read through them!
Hope this helps!
Although officially most of the companies would say that you don't need any specific business knowledge, in reality, it is hard to solve a case purely based on common sense. So the lack of business knowledge becomes a very common problem among the people with various backgrounds
Business Acumen is actually about building proper industry and functional knowledge.
Focus on the most common industries in the following priority (sorted by probability of geting a case): 1-retail and CPG; 2-airlines; 3-Telecom; 4-banking; 5-natural resources; 6-tech
There are several sources of information that will help you develop the business sense:
1) Cases - you simply solve 50-70 cases and get a broad knowledge of different industries, common pitfalls and questions. The key here - find good partners who already had case interviews with MBB companies
2) Company reports, equity reports, IB roadshow docs - usually have a good overview of company and industries.
3) HBS cases - quite useful, but not sure if lot's of them available publically. Probably worth buying
4) Industry Books - one good book about airlines with numbers and industry analysis can give you all needed industry knowledge
5) News, Industry blogs
For each industry, you should understand:
- Revenue streams
- Cost structure
- Key performance indicators
- Key revenue drivers
- Industry trends
I strongly recommend drawing the typical structures for each industry - profitability, value chain, etc
Then I will switch to getting functional knowledge:
- Marketing (Brand and trade marketing tools, etc)
- Supply chain (Ops metrics like cycle time and throughput time, distribution and delivery specifics, etc)
- Operations (Process optimization basics)
- Finance (Very basic Finance and Valuation)
I think that the most effective way to improve business judgement is to be curious. When I say "be curious" I do not mean just reading newspapers and listen to the latest FT podcast, but really try to understand what is behind macroeconomic trends. Just to give you an example: don't just read that interesting article about blockchain implementation in banking, but also ask yourself "how does blockchain work? why does it work? are the alternatives? will it have really a future?" and search for answers to these question. You may want to start this process with a topic that is interesting to you, so that at the beginning will be easier to do that. In this way you will build a knowledge and a forma mentis that will help you to rapidly put the "puzzle pieces" together and create your own point of view. Of course, even if you have not formal studies on this topic, reading some books about the main principle of macro and microeconomic is fundamental (i.e. you can't have real business acumen if you have not idea of what price elasticity is).
- Just do as many cases as you can across various industries....and across various business issues eg operations, profit, comp responses.
- Read the news, watch the news, read annual reports. Listen to CEOS speak on youtube.
I think rather than picking up on acumen, it's more important to understand the value chain and operations of organisations. When you walk around in daily life, think about the places you visit, what is their purpose, what can be improved, whos working in this store, what behind the scenes operations are occurring? For example, when you visit the supermarket, walk around and observe the staff, the customers, try to think about what matters to the company and customers. Come up with some ideas of how you may improve this supermarket, is their a bottle kneck at cashiers, are the isles crowded? Then go home, read a supermarket case, read a supermarket annual report etc, compare your knowledge...make it a game if you can!
Also, im guessing you have friends who work in business...pick their brains...i would meet a person at a party who worked in a random industry, id ask him what exactly he did, what was the industry looking like atm, what are the challenges, blah blah blah.
BE CURIOUS...BE OBSERVANT...BE OBSESSIVE.
The following are the best ways to increase business acumen...
1. Reading more and more case studies.
2. Taking part in more management competitions.
3. Enhance the skills by playing more business stimulation games.
4. Keeping up to date with advancements in technology and news.