In this series I’m using the Financial Times’ definition of business acumen as “keenness and speed in understanding and deciding on a business situation.” The word “acumen” means keenness, but in “business acumen” speed is also crucial, and is included in the definition.
To make decisions, we need information. As technology evolves, companies that access the most accurate and most relevant information, and do so the most rapidly, develop a competitive advantage over others in the industry.
An extreme example is stock market high frequency traders, who relocate their servers into offices or hotels right next to the exchanges’ data centers, in order to gain a few milliseconds over ordinary investors.
But even in ordinary corporate environment, planning future budgets and cash flows means that the planners need up-to-date information. They can’t rely any longer on hand-written ledgers and calculations, with information provided by carrier pigeon. And they need it from everyone:
- what does market demand look like for the next year?
- what new products and services are we and our competitors developing?
- what are the frontline sales people saying about prices and volumes?
- what are production and related costs, and what are our capacity constraints?
- how much money can we raise if we need to, and how easily, and at what cost?
- what else do we need to allow for in our planning?