Browsing the archives for the Business Acumen category.

Building your financial acumen

Business Acumen, Geek 5, Outside Articles

In the last post, we talked about the importance of financial acumen to geeks progressing in their careers.  So now you’re thinking, I know I need it, but how do I get it?  And – how painful is it going to be?

OK, OK, learning about financial stuff might not be as exciting as some endeavors, but it is still important.

I found a great website that can help with some accounting and finance skills – and most of the site is free!  See – it is a great financial decision already!

The site is called accounting coach.com. The site is run by Harold Averkamp and he is dedicated to improving knowledge and skills related to accounting.  Containing a wealth of information, the site presents accounting concepts in easy to understand terminology and in bite-sized chunks.

The Accounting Topics section contains tutorials on concepts like Accounting Basics and Depreciation and Activity-Based Costing and Improving Profits.  If those topics don’t mean anything to you, then you desperately need these tutorials!

My favorite part of the site is the Test Yourself section.  It offers quizzes and crossword puzzles and word searches with financial themes. I failed the Basic Accounting quiz, so I obviously need to spend more time with the tutorials!

This is a great place to get started.  Once you master some basic concepts, you can seek out a mentor at your company who can help you apply the new concepts to your specific company.

Good luck on your path to financial enlightenment!

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Importance of financial acumen

Business Acumen, Geek 5

One of the Geek 5 risks is that geeks often lack basic business and financial skills.  In school and early career, geeks often focus so intensely on their area of expertise that general business concepts get neglected.  If you are interested in moving from a technical role to a more general leadership role, you need to get savvy about business.

 For Geeks, gaining financial acumen is important for three reasons:

  1. Important understanding – Financial skills are more than a ticket to success.  The skill is important for a reason. The foundation of any business is the finances of the company.  Financial acumen will expand your understanding of the costs and challenges of doing business in your industry.You’ll gain a better understanding of how outside economic forces impact your company and how your company’s decisions impact your bottom line.  In many cases, this also directly impacts your personal bonus and compensation!
  2. Critical skill – As a leader, you will be called upon to make important and probably costly decisions for your company.  You need to know how to assess the best course of action.  For example, think of an IT Leader who needs to decide between a costly, gold-standard software package and a lower cost, lesser known package.  What does she choose?  How does she compare costs and assess short and long-term value?  How do you expense the package or is it a capitol expenditure?
  3. Credibility with senior leaders – As you rise in your career, financial skills becomes a ticket to play.  They are expected from all leaders at a certain level.  You need to talk the same talk as other leaders at your level and above.  You don’t need to turn into a Finance guru or get an MBA, but you should be able to contribute intelligently to a financial conversation and decision.

In the next post, I’ll point you to a website that can help you build your financial acumen.

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Scary Talent Statistics

Business Acumen, Geek 5, Managing people

We’ve talked about succession planning and how it impacts you and your direct reports.  The latest Harvard Business Review has a great article about the retention of top talent.

HBR is a terrific resource for geeks and anyone else looking to move ahead in a broader management role.  HBR hits the Geek 5 in several ways.  One way is that it is a solid source of business acumen.  You’ll learn a lot about business and finance and strategy.  The articles are well-written, based on solid research and often presented in a case study format.  HBR also hits the Geek 5 in terms of having research-based articles about leadership and managing people.  This article is one of those.

The article written by Jean Martin and Conrad Schmidt is called “How to Keep Your Top Talent”, and it appeared in the May 2010 HBR.  It can also be read or downloaded online.

The article is based on solid research from both the Corporate Executive Board (focused on general business) and the Corporate Leadership Council (focused on leadership and HR).  These are expensive organizations to join, but they offer a wealth of information and research and support in areas like Talent Management.  If your company has a membership – you should check them out!

In this post, I’m going to share with you some frightening statistics from the article.  In a future post, we’ll cover the recommendations from Martin and Schmidt on how to tackle the problem.

We’ve defined high-potentials (HiPos) and talked about identifying them in succession planning.  Martin and Schmidt indicate that identification alone is not enough.  HiPos require special attention.  The research indicates:

  • Almost 40% of the internal job moves made by HiPos end in failure
  • One-fourth of your HiPos intends to leave your company in the next year
  • One third of HiPos admit that they don’t put their full effort into the job
  • Employee engagement overall has dropped.  In the first half of 2007 only 8% of employees were “highly disengaged” but by the end of 2009 21% were.

What does this mean for you? 

As a manager, it means that you should be concerned and should start paying attention to your start employees.  As an employee yourself, you should think about your status as a HiPo or not and the impact on your career advancement.

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Business Acumen: Become a Financial Whiz!

Business Acumen, Geek 5

One of the Geek 5 risks is about lacking business acumen.   By definition, geeks have deep expertise in their fields.  Learning and developing deep expertise usually requires laser-like focus.   Engineers focus on math, science and technology; doctors focus on medicine; computer programmers focus on coding and systems, etc. 

As recent research has shown, it is believed to take approximately 10000 hours of practice to get good at something.  Geeks focus their 10000 hours (give or take) on their specialty.   As a result, most geeks don’t learn general business and financial skills.   

There are a lot of available resources to help geeks learn general business skills.  We’ll explore some of them in this blog.  Some of the resources are free and some cost to use.  The one common theme will be that you can learn from them on your own while you are working.  You don’t need to quit work and get an MBA to find success in your career. 

You already have a technical expertise that sets you apart.  What you need is to have enough business and financial acumen to understand the broader picture at your company.  You also need to understand the business issues facing your senior leaders and be able to discuss the issues.  To be a leader, even in your specialty area, you need to take a broader view of the business and financials of your company.

One resource to explore is Harvard Business Review (HBR).  HBR has many terrific resources – including articles, books, blogs and more.  I use HBR resources in many leadership programs and in executive coaching.  Recently I received an email about some new e-learning offerings from HBR.  I have not taken these course, but I trust content from HBR.  Sometimes HBRs web-based materials are not slick and flashy, but the content is always superior.

These e-learning courses cost $70-$130 for an individual license.  The topics include:

So if you are looking for some good business or financial course, check these out!

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Friday articles: Hedge Fund Manager & When to fire

Business Acumen, Geek 5, Leadership, Managing people

For this Friday, I’m going to link you to two interesting articles at the New York Times.  BTW – the NYT is a great resource for improving your business acumen which is one of the Geek 5 risks.

The first article is a Corner Office interview called “An Office? She’ll Pass on That”by Adam Bryant about hedge fund manager Meridee A. Moore.  She has some interesting things to say about her management style (she micro-manages) and some of the coaching she has received about her style.  She also talks about using 360 feedback and an executive coach to make sure she stays on track as a leader.

The second article, in the small business blog: You’re the Boss, is titled  “The Secret to Having Happy Employees”by Jay Goltz.  I like his straight-forward take on happiness in the workplace.  He describes two things to do to keep workers happy.  One thing is the obvious answer – treat them well.  The second thing is less obvious – fire people when you need to.  Read the article to learn more.

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Talented geeks without business savvy

Business Acumen, Geek 5

A recent blog post at BNET explored two situations in which talented geeks failed at a major business deals due to lack of business savvy.  This is a perfect illustration of one of the Geek 5 that we have not yet tackled.  The relevant Geek 5 is Business Acumen or rather the lack of it.

Geeks have generally spent their careers focused on their technical specialty – whether it be computers or medicine or statistics or psychology.  Specialized academic programs often do not allow for a lot of extra time to take management classes and such, so exposure to business often does not occur during the university days.  Once working, early careers are often built on technical expertise – again, no time or energy for general business and financial learning.

Once geeks leave the early career stage, business acumen starts to matter more.   As a matter of fact it can mean the difference between surviving and thriving or failing. 

Steve Tobak at BNET does a post mortem on two business cases in which talented people fail due to lack of business acumen.  The first explores the development of a video game, Duke Nukem Forever, which was an intended sequel to Duke Nukem.  However, the development team could not focus or stick to a timeline and plan.  After 12 years of development and a $20M investment, the project was shelved without being completed.

Another case study was on the chip maker Rambus.  They had a break-through technology DRAM chip.  However, they attemped to use an unusual approach to selling, got on the wrong side of some lawsuits and ended up behind the game.

The best technology does not always win.  Geeks need the right business acumen to protect their ideas and find success.

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