We’ve all heard of IQ – Intelligence quotient – as a measure of smarts. EQ – Emotional quotient – is a measure of how well you work with others. Equally important is a manager’s BQ – Business quotient (or business acumen) a measure of ability to run a business. Here’s why it’s important to you and your team.
In 2000 Xerox was on the brink of bankruptcy. Ursula Burns, who would later become CEO, was then part of the Xerox ‘turnaround’ team. Reflecting on that time she discussed how, collectively the teams’ business acumen made a difference to the survival of Xerox. She stated that each day the people at Xerox were faced with one of two choices, they could make a choice “that would allow it (Xerox) to stay alive and the other that would kill it”.
Most business decisions don’t carry the life or death consequences like Xerox faced but, large or small, each business decision has one of two outcomes – it either adds business value or it diminishes it. Some strategic decisions do have enormous business implications but it’s the day to day decisions that add up to have the most cumulative impact. These decisions move customers to re-engage or look elsewhere and cause good employees to stay or move on.
A Business Quotient (BQ) is a measure of an individual’s ability to make value creating decisions. Ensuring all levels of the organization made value creating decisions was mission critical to Xerox’s survival and it should be mission critical to your organization too. The elements of BQ (or business acumen) include the ability to:
- Evaluate the business ecosystem: Business patterns of the past often foreshadow the future.
- Set business objectives: Based on your market evaluation, objectives tell “what” you’re going to accomplish.
- Build the strategy: Strategy supports objectives defining “how” they’ll be accomplished.
- Set tactics: The 4P’s – the tactics, drive the strategy.
- Execute: Allocating appropriate resources, communicating goals, training your team and creating smart incentives are all part of successful execution.
- Evaluate and adjust: Use financial ratios to gauge your strategy’s effectiveness.
In their turnaround Xerox needed to develop the management teams’ business acumen or BQ to ensure each decision added corporate value. What are you doing to develop your business’s BQ?
More info please see Businessinsider.com Xerox CEO Ursula Burns shares the best advice she’s received as an executive Richard Feloni Sept 10 / 2015