Strengthening your financial acumen via professional courses is a must in today’s economy. As the U.S. economy inches toward recovery, unemployment is still high. During her recent speech at the New York Economic Club, Fed 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, Yellen highlighted the role of the private sector in investing 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.
OxfordDictionaries.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, time zones and markets effectively. Just reading the previous sentence is mind boggling. Being able to not only understand 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 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.
1. Financial skills include strengthening core financial literacy concepts and metrics, streamlining processes such as budgeting, forecasting, and reporting, and stepping up compliance.
2. 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.
3. Global skills include analyzing local, regional and global market 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 important, seeking the cross-pollination amongst them, is an indispensable criterion for success in both your personal growth and that of your organization.
“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.
To get deeper into this topic, consider taking AMA’s Advanced Financial Forecasting and Modeling Workshop. For more articles like this, explore AMA’s Playbook and all it has to offer.
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