By AMA Staff
Strengthening your financial acumen via professional courses is a must in today’s economy. As the US economy inches to recovery, unemployment is still high. During her recent speech at the New York Economic Club, Federal Reserve Chair Janet Yellen responded to a question by Abby Joseph Cohen of Goldman Sachs regarding the role of the public and private sectors to decrease unemployment. In her response, the Fed Chair highlighted the role of the private sector to invest in specific skills training to enable employment growth. Research shows that in times of financial crisis, financial acumen is a critical and indispensable component of an executive’s ability to lead even after the storm has subsided.
The Oxford Dictionaries.com defines acumen as "the ability to make good judgments and make quick decisions." Also according to the dictionary, the word is rooted in 16th Century Latin from the verb acuere or "sharpen." Acquiring such keenness and speed in finance hinges on the combination of many factors. These factors include on-the-job experience and continuous learning. While such learning may begin with a university degree such as an MBA, research shows that specialized training addressing specific training needs is more effective. The ability to understand and decipher the interplay between numbers, people, process, and technology on a global dimension and scale is critical in today’s ever-changing global economy.
Financial acumen is complex. To create economic value for your organization you must understand and manage multiple financial indicators around goals, products, stakeholders, platforms, resources, regulations, geographies and time zones, and markets effectively. Just reading the previous sentence is mind boggling. Being able to understand not only the numbers in your P&L, but also to deploy and manage your limited resources of people, time, and funding while adhering to governance, risk management and compliance requirements and regulations, keeping up to date with competitors, recalibrating new technologies, and delivering to customers at higher levels of quality, can be truly daunting. Sharpening these skills while also inspiring and motivating your team and driving your vision forward requires a two-pronged approach to leadership: mastering the people skills and getting a solid grasp on your financial acumen.
Financial acumen can be structured in (but not limited to) three main pillars: financial, business quality, and global skills.
- Financial skills include strengthening core financial literacy concepts and metrics, streamlining processes such as budgeting, forecasting, and reporting, and stepping up compliance.
- Business quality skills sharpen your ability to keep your house in order and work efficiently by managing costs and resources, focusing on process quality, standards, tools, and metrics, driving efficiency, shorter cycles, managing resources, and understanding technology trends.
- Global skills include analyzing local, regional, and global markets and product trends, deciphering competitive intelligence, understanding the importance of governance, risk, and compliance, building a sound corporate responsibility strategy and a broader sustainability strategy for the growth of your organization into the future.
- The underlying common thread in all these functions is a keen understanding of the numbers in your line of business. Mastering the numbers enables you to make sound and quick decisions. Pursuing these skills, and more importantly seeking the cross-pollination amongst them, is an indispensable criterion for success both in your personal growth and that of your organization.
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“Such skills strengthen business leadership and are required competencies for today’s and tomorrow’s managers and their organizations globally” said American Management Association CFO Vivianna Guzman. The American Management Association (www.amanet.org) is a world leader in professional development, advancing the skills of individuals to drive business success with over 90 years of track record and over 180 courses including financial skills. The courses are available through in-class instruction and online.
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About the Author(s)
AMA Staff American Management Association is a world leader in professional development, advancing the skills of individuals to drive business success. AMA’s approach to improving performance combines experiential learning—“learning through doing”—with opportunities for ongoing professional growth at every step of one’s career journey. AMA supports the goals of individuals and organizations through a complete range of products and services, including seminars, Webcasts and podcasts, conferences, corporate and government solutions, business books and research.