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FMI Quarterly/December 2013/December 1, 2013

Building Business Acumen

traffic1_imageWhat does it take to be a successful senior executive of a contracting company? Is there a special combination of insight, intellect, experience, knowledge, skills and ability that comprises the character of a contractor? Are contractors born or built? How do successful companies create a pipeline of talent to build the next generation of leaders?

To answer these questions, we parse the qualities of a successful senior management team (SMT) member and what it takes to become one. In short, this article will condense the observations from years of working with great leadership and define what the best SMT members have and how it can be developed. Herein we explore paths and options to building business acumen (BBA).

DEFINING BUSINESS ACUMEN

Business acumen is a holistic knowledge of the entire business. Business acumen implies a bundle of knowledge, based on experience that is both broad and deep. The Oxford English Dictionary defines acumen as “the ability to make good judgments and quick decisions.” Business acumen is characterized by an ability to understand a situation or problem and come up with sound, practical, workable solutions. What are the qualities of business acumen that high-performing construction executives possess?

Entrepreneurial spirit — the ability to seek and seize opportunity. Adaptability and appropriate risk-taking are highly valued skills of SMT members. In Beyond Entrepreneurship (1992), Jim Collins provides thorough insight into the attributes required to build a successful enterprise from a concept.

Strategic vision — the ability to see patterns, anticipate trends and create a successful outcome. A global view of the world, your marketplace, clientele, the company and your people come together in the mind of a high-level
executive. The best are able to evolve an idea into a plan, then to rally the team to execute to success.

Leadership — in every sense of the word. Libraries are filled with definitions of high-quality leadership, and it always resides at the top of great companies. The FMI leadership model is a useful study for any aspiring SMT member, as is learning to walk the talk. BBA aligns with our core concepts of leadership — setting direction, aligning resources, motivating people, driving change and building quality relationships. The best SMT members make growth in leadership skills a lifetime pursuit.

Management — a commitment and rigor to company procedures, structure and systems. The aim of good management is no surprises in our performance — we want dependable, predictable results. Even without ISO standards, our consistent methodology and systems produce expected outcomes. There is no substitute for planning, organizing and controlling your work, with an eye to continuous improvement of your methods.

Human touch — The best senior executives get the top results from the people around them — they are great team players. Of course, the best leaders also attract high-quality talent and develop it into the next generation of leaders. Call it people skills, core skills, leadership, communication or all the above — working well with people is a baseline core competency for a senior executive. Talent identification, attraction and development are not accidental; they are the result of valuing people for all the right reasons. Great executives make the science of people a core skill. They study and therefore know about motivation, recruiting and hiring best practices, performance management, talent retention and  development of people. HR duties are not just a requirement of their job – people are the reason for their work. Quality SMT leaders have earned their rung in the ladder by helping others up the ladder; they are leaders because they have followers. The future of the business is also secure because quality senior executives know the best succession planning is a deep bench of developing talent.

DEVELOPING BUSINESS ACUMEN

The best companies develop their own talent across disciplines, including their leadership qualities and management skills. People hired for specialist positions, such as estimators, project managers, field managers, safety technicians, financial administrators, etc., generally make a career in their chosen area of interest. Businesses need the depth of expertise that specialists provide.

There is also an insatiable need today to discover and develop the next generation of business leaders who have the ability to understand the entire business and meaningfully contribute across business units (i.e., generalists.) SMT members must have the ability to nurture strategic thinking throughout the company and lead the technical (specialist) managers. Senior managers understand the interconnection of each department and their contributions to achieving overall company goals.

In some cases, it will be easy to identify individuals who stand out by making special efforts to improve their skills and industry knowledge. Look for generalists who have people and leadership qualities. Watch for people who seek personal growth and a managerial (not technical) career path. The best companies seek out people who are “students of the industry” — career contractors in search of greater knowledge and opportunity. Choose wisely, because this group will require a significant investment to fully develop into future leaders; most often, developing them is a three- to 10-year development project.

There are a variety of assessment tools to choose from to create an objective gauge for current skills and personal characteristics of SMT candidates. Some examples of proven testing instruments that are regularly used include:

  • DiSC – personality profiling
  • MBTI – Myers-Briggs Type Indicator
  • Proscan
  • Profile XT – matching current abilities to a success pattern
  • PI – the Predictive Index
  • IQ or intelligence tests
  • EQ or emotional intelligence (maturity) evaluations
  • 360° review (by peers and managers)

The Business Acumen Assessment (BAA) is a tool for management to gauge an individual’s strengths and competencies in specific areas. As a subjective self-assessment tool, the BAA is valuable as a review and goal-setting document for discussions between the employee and the manager. Gaps between the employee and management are fertile development opportunities. The results of the BAA then lead to a plan for personal and professional growth. After scoring the BAA, creation of a personal development plan is the next step in the process.

HOW TO CREATE A PERSONAL DEVELOPMENT PLAN (PDP)

In general, learning to achieve business acumen goals falls into four areas:

  • Technical skills. How to perform well in a specific role.
  • Process skills. The processes and procedures of how the company runs.
  • People or core skills. These skills are generally thought to be innate, but experience has shown they can be developed. The objective is to sharpen leadership skills.
  • Business acumen. This is where the next-generation senior management team gains a holistic knowledge of the business.

Research shows that people learn best by doing. To build executive and managerial skills, people need to take on challenging roles. To build business acumen, look for ways to expand your high-potential group’s direct involvement in company expansion efforts and innovative roles. These are your “high potentials” — your future leaders whom you are grooming to run the business someday. The notion is to continually challenge people — stress test them — to be resourceful and enjoy solving new problems and developing new skills.

There are many ways to build the business and your next generation leaders:

  • Have them teach their specific skills and abilities to others in a formalized training program.
  • Involve them in the company’s strategic planning process.
  • Move people around the company into multiple roles.
  • Involve them in senior management team planning and problem-solving sessions.
  • Have them mentor people in another department (out of their normal discipline silo).
  • Enroll them in formal education opportunities.
  • Provide industry exposure to thought leaders.
  • Create a “lunch-and-learn” program around short topics.
  • Pair them up to learn from subcontractors and suppliers, engineers or architects.
  • Have them teach your standard operating procedures.
  • Have them gather “lessons learned,” war stories (both the best and the worst).
  • Assign client responsibilities, for instance, as a project executive.

The opportunities to provide career development to your next generation of leaders to understand the entire business and meaningfully contribute across business units are boundless. The outcome of the BAA assessment is to create personal development plans — specific talent development plans — for the SMT of the future.


WHY PEOPLE STAY WITH THEIR CURRENT EMPLOYER

  • Company longevity and reputation
  • Opportunity for career development and personal advancement
  • We provide strength and stability
  • We build exciting, challenging projects
  • We have a solid strategic direction
  • Company culture —fun place to work
  • Competent, smart associates
  • Rewarding compensation, bonuses, and benefits
  • We care about our people
  • Geographic diversity creates stability
  • We live our values
  • Job security
  • Professionalism

Kevin Kilgore is a principal with FMI Corporation. He can be reached at 303.398.7272 or via email at kkilgore@fminet.com.

 

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