“Business acumen” is well on its way to becoming industry jargon, but do PR pros all mean the same thing when they use the phrase?
Turn to any number of industry publications, and you will find a writer opining on the lack of business skills among the communications cohort. Many communicators will guiltily concede that they don’t like numbers—and some will angrily push back on language that they feel lumps them in with marketers.
However, business acumen is quickly becoming a key differentiator for PR pros looking to progress in their careers. As the industry has changed and business leaders have turned to communications experts to help guide policy and business strategy, it has become essential for PR pros to know more than the nuts and bolts of communications tactics.
But what does the industry as a whole mean when it discusses “business acumen”?
Frustrated junior PR pros might be justified in throwing up their hands at the vague assertion that there is a vast amount of knowledge they lack—and no clear definition for how to go about filling in the gaps.
A study in the Institute of Public Relations’ Public Relations Journal attempts to define the term once and for all.
The study—which applies a series of surveys to home in on consensus definitions—turned to Arthur Page Society members, many of whom are top communicators at their organizations. It asked them a key question: “In the consensus view of the senior corporate communications leaders, what specific knowledge areas fall under the domain of business acumen?”
The answer boiled down to an understanding of how your organization brings in money (or offers value).
Many respondents said that, at its most basic level, business acumen is about understanding “how a company makes money” and how it creates value for its stakeholders (i.e., the business model).
… Professionals should have “finance understanding—although not as deeply as a finance professional” and “financial analysis—ability to read and interpret financial statements.” As one respondent said: “Using my corporate experience, it is the ability for my PR/comms team to understand how our company generates revenue, makes a profit and serves our customers. This includes being able to read and understand our basic financial reports and the attributes of our publicly traded stock.”
Does business acumen include financial literacy? Math-phobic PR pros will be relieved to know that PR pros needn’t have a deep understanding of algebraic formulas or even long division.
The study continues:
On a related note, respondents indicated that professionals must know at least the basic language of finance and business. For example, a panelist shared that professionals need to be able to “understand key business terms and be able to discuss those terms with your own subordinates or senior management.” Another leader said that professionals should have “command of investor terminology and language.”
One key way that communicators can add to their business acumen is to research their particular market and vertical to understand how their organization or client competes.
The study adds:
Turning to markets, professionals should understand “the marketplace and the economy, and how they affect the business.” Professionals should “understand the sector/industry in which the company operates” including “knowledge of trends, market and geopolitical forces and potential drivers and detractors of the business.” This includes tracking peers and competitors within industries and markets. One panelist argued that public relations and communications professionals should strive to “always [be] the most informed person in the room about external trends, challenges and opportunities.”
The study summarizes the many facets of “business acumen” into a list that includes:
- Knowledge of business model, stakeholders, markets, stock assets, etc.
- Ability to synthesize business concerns through a “communications lens”
- Commitment to ongoing learning
Some areas that a PR pro should become familiar with:
- Finance, stock markets, quarterly reporting terms, etc.
- Operations and strategy, including supply chain, organizational structure, brand position
- Human resources, employee comms, culture, diversity and inclusion, etc.
- Technology, cata and analytics, measurement, ROI
- Marketing and sales, consumer journey, sales funnel, etc.
- Legal, public policy, regulatory compliance, corporate governance, social responsibility
The best communicators will then use that knowledge to give finely tuned and expertly timed advice to top leaders in their organizations.
To work on your business acumen and become a highly valued and financially rewarded PR expert, join us for our upcoming Business and Finance Boot camp for Communicators in Washington, D.C.