Far too many people—especially people with great expertise in one area—are
contemptuous of knowledge in other areas or believe that being bright is a
substitute for knowledge. First-rate engineers, for instance, tend to take pride in
not knowing anything about people. Human resource professionals, by contrast,
often pride themselves on their ignorance of elementary accounting.
But taking pride in such ignorance is self-defeating.
A
A Understanding the Business
Peter F. Drucker – Austrian-born American writer,
management consultant, and professor (1909–2005)
Effective leaders are credible. And your credibility largely depends on having
a thorough understanding of your business. Technical expertise in your
functional discipline only gets you partway there. Effective leaders go further
and establish credibility by demonstrating a firm grasp of business models,
fluency with business terminology, and mastery of basic financial methods
and tools. Credible leaders see the big picture but also have a command of
specifics. They can describe details of the competitive landscape. Comfortably
discuss the technology underpinnings of the business. Concisely state the
unique value proposition. Clearly explain how their businesses make money.
Without business understanding, you lack the credibility that earns you an
invitation to the leadership table. But with business understanding, you have
a springboard for sustained career success.
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A: Understanding the Business
What It Looks Like
Skilled
▫▫ Knows the business and the mission-critical technical and functional
skills needed to do the job
▫▫ Understands various types of business propositions and understands
how businesses operate in general
▫▫ Learns new methods and technologies easily
Unskilled
A
▫▫ Doesn’t understand how businesses operate
▫▫ Relies too much on personal experience
▫▫ Doesn’t seek out opportunities to learn about business or technical
matters
▫▫ Rejects new technology until totally proven
▫▫ May appear naïve or disinterested where business or technical skills are
required
Overused
▫▫ May know too much and not be open to the input and ideas of others
▫▫ May depend too much on knowledge and not allow intuition to enter
the analysis
▫▫ May not value those less knowledgeable
▫▫ May miss developing other types of skills like interpersonal and
influence skills
How it compares
Skill Level for Most People
Developmental Difficulty
Moderate
Moderate
Low
High
Very Low
Easier
Very High
Harder
Easiest
3rd out of 21
Hardest
Easier
The skill level for most people in
Understanding the Business is very high
when compared to other characteristics
(ranked 3rd out of 21 characteristics).
When compared to other characteristics,
Understanding the Business is easier to
develop.
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A: Understanding the Business
You fail to understand the degree to which business is a system of interrelated
components and processes. Whether you are in IT, R&D, HR, marketing, or
legal, a lack of appreciation for the interdependencies across all functions
will hamper your ability to truly understand how your business operates. If a
passion for a functional or technical discipline has created blinders for you,
it will be easy to make excuses. Outside of finance and general management
disciplines, excuses abound: “I’m an IT professional, so I don’t need to learn
about the competitive landscape.” “I work in HR, so it’s OK if I don’t fully
understand our financial statements.” Excuses keep you from putting in the
time to study business fundamentals, keep you from doing the hard work to
gain financial literacy. Excuses lead to simplistic thinking, to believing that it’s
enough to skim “Business Acumen for Dummies,” or passively observe skilled
managers in the business. Excuses keep you from seeing the importance of
having a broad business understanding. Excuses prevent you from rolling up
your sleeves and really making an effort to learn business fundamentals.
A
If this is an issue for you, it’s likely because…
Or it could be due to…
▫▫ Poor math skills
▫▫ Inexperience; new to the organization or industry
▫▫ Fear of technology
▫▫ Intellectual laziness
▫▫ Unrealistic expectations about how business understanding is learned
▫▫ Narrow perspective
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A: Understanding the Business
If you want to enhance or increase Understanding the
Business…
Do
Don’t
▫▫ Learn to read and explain
▫▫ Excuse yourself because you
A
financial statements
▫▫ Seek coaching from experts
in finance, marketing, and
operations
▫▫ Find opportunities to serve on
project teams that are analyzing
business opportunities and
creating business project
proposals
work outside of a core business
discipline
▫▫ Miss opportunities to visit with
customers and to learn about
your competition
▫▫ Limit your business reading to
your technical discipline
If you overuse Understanding the Business…
Do
Don’t
▫▫ Channel your energy and
▫▫ Fixate solely on the numbers
▫▫ Take the fun out of competing in
expertise into mentoring others
▫▫ Consider intangibles and people
issues when making business
decisions
business
To continue learning…
Check out additional resources at http://Insight.lominger.com:
Take the free online FYI for Insight™ Self-Awareness Assessment.
Read the positive and negative character sketches for Understanding the Business.
g See additional books and articles related to Understanding the Business.
g
g
Pursue deeper self-development. Consult FYI For Your Improvement™ 5th Edition,
available at http://store.lominger.com, to focus on competencies that comprise
Understanding the Business:
5. Business Acumen
24. Functional/Technical Skills
61. Technical Learning
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