Our High Performance teams series now enters the fourth part of the Execution pillar of HP Teams: Business Acumen.
While this is probably the least sexy trait of high performing teams, it might well be that it is the most underrated and hence single biggest indicator of results.
So, in this episode we cover:
- The compound effect of bad acumen and good acumen
- Why this is often overlooked but will forever be relevant
- The four pillars of good acumen in a team
A mysterious concept
If you've been in a high performance team, you'll know how amazing it is to have someone else in your team come into the room and tell you about a key decision they made that will have a huge positive impact on your results, and your culture, and your customers. You'll equally know what it's like to be on the receiving end of perhaps a gut-wrenching bit of news, where someone has really dropped the ball, they've done something silly, they've made a bad decision that's either cost the whole project or it's resulted in a key person leaving the team.
The fact of the matter is that high performance teams – and the individuals within them – make smart decisions and therefore they have good business acumen; the opposite can be said of low-performing teams.
The odd thing is that acumen is not something many people talk about as being an important part of a high performance team.
The compound effect of acumen
The impact of one bad decision could lead you down a spiral path, taking you towards a situation where there are less opportunities and restricted choices. But rather than standing on solid ground, sticking to your principles, vision and values, you're in a position where you're having to dig yourself out of a hole. And that hole keeps getting deeper, and good people want to leave as fast as possible as it impacts your culture. On the flip side, good, smart decision-making every single day has a positive compound effect.
I was once working with an organisation that had multiple production facilities in different countries. One of the particular factories was no longer producing at the level it should be as it had some maintenance issues internally. As a result, they shut down a facility and made some improvements before restarting it. At the same time, they increased production at another facility, which meant some vital upgrades to that other facility had to be pushed out, which affected its long-term viability.
The shutdown of the first facility lasted longer than they thought, likewise with the other facility, and they told another factory to increase its production. What then happened was that they had to schedule a whole range of production downgrades, and they really had little choice going forward but to reset a whole bunch of their factories and start over.
So the long-term flow-on effects to the viability of the organisation are absolutely vital to consider. If you take a short-term hit every now and then, you'll get the benefit in the long-term.
And it's not just production issues that are vulnerable to acumen; sometimes it can just be everyday decisions such as the way you treat a customer, the way you go about trying to win a contract, or how you deliver a particular service.
How do you stay focused then?
How do you get yourself and your team to make good, smart business decisions every day? Well, it starts with the environment you create that allows people to make smart data-driven decisions every single day. There are four pillars to making your team do this.
1. Be absolutely clear about your vision and values
If the individuals of your team are clear on where the team is going, that will make their job making a decision a lot easier. If you've created very clear behavioural standards, you will bring your values to life. People can be aspirational and be clear about what choices they have.
2. Be clear about your strategy and your tactics
Strategy is how you're going to win; tactics are the step-by-step processes and the project priorities that you've got every single day. If an individual knows what all the priorities in the business are right now, they're going to make smarter decisions. But you have to be clear in your communication so that they're sticking to the script.
3. Make sure you set up some team principles
Put some guidelines in place that help people make those decisions. If you're a sales team, you might put some very clear principles and guidelines around what kind of deal a particular salesperson can offer, the limits on those deals, or the discount for multiple purchases. This is to ensure a salesperson makes a good decision and doesn't give away products at a loss. Or if you're in the procurement office, you don't get in a situation where you have low-quality suppliers giving low-quality products. Or you might be in an IT project team and you agree that no release will go live until every test has been passed 100%.
You can see, Chief, how this aligns nicely with the metrics and numbers of your team. Acumen is steeped in knowing the numbers, operationally and commercially, of your business. And by linking the vision and values to the strategy and the tactics, and then to the priorities and principles that you are going to use to make decisions, you will become really clear and improve the quality of everyone's acumen as a group.