A

Understanding the Business

Far too many peopleespecially people with great expertise in one areaare contemptuous of knowledge in other areas or believe that being bright is a substitute for knowledge. First-rate engineers, for instance, tend to take pride in not knowing anything about people. Human resource professionals, by contrast, often pride themselves on their ignorance of elementary accounting. But taking pride in such ignorance is self-defeating.
Peter F. Drucker Austrian-born American writer, management consultant, and professor (19092005)

Effective leaders are credible. And your credibility largely depends on having a thorough understanding of your business. Technical expertise in your functional discipline only gets you partway there. Effective leaders go further and establish credibility by demonstrating a firm grasp of business models, fluency with business terminology, and mastery of basic financial methods and tools. Credible leaders see the big picture but also have a command of specifics. They can describe details of the competitive landscape. Comfortably discuss the technology underpinnings of the business. Concisely state the unique value proposition. Clearly explain how their businesses make money. Without business understanding, you lack the credibility that earns you an invitation to the leadership table. But with business understanding, you have a springboard for sustained career success.

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copyright 19922010 lominger international: a korn/ferry company. all rights reserved.

A: Understanding the Business

What It Looks Like

Skilled

Knows the business and the mission-critical technical and functional Understands various types of business propositions and understands Learns new methods and technologies easily
how businesses operate in general skills needed to do the job

Unskilled
matters

Doesnt understand how businesses operate Relies too much on personal experience Doesnt seek out opportunities to learn about business or technical Rejects new technology until totally proven May appear nave or disinterested where business or technical skills are
required

Overused

May know too much and not be open to the input and ideas of others May depend too much on knowledge and not allow intuition to enter
the analysis May not value those less knowledgeable May miss developing other types of skills like interpersonal and influence skills
How it compares
Skill Level for Most People
Moderate Low High Easier

Developmental Difficulty
Moderate Harder

Very Low

Very High

Easiest

Hardest

3rd out of 21
The skill level for most people in Understanding the Business is very high when compared to other characteristics (ranked 3rd out of 21 characteristics).

Easier
When compared to other characteristics, Understanding the Business is easier to develop.

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copyright 19922010 lominger international: a korn/ferry company. all rights reserved.

A: Understanding the Business

If this is an issue for you, its likely because

You fail to understand the degree to which business is a system of interrelated components and processes. Whether you are in IT, R&D, HR, marketing, or legal, a lack of appreciation for the interdependencies across all functions will hamper your ability to truly understand how your business operates. If a passion for a functional or technical discipline has created blinders for you, it will be easy to make excuses. Outside of finance and general management disciplines, excuses abound: Im an IT professional, so I dont need to learn about the competitive landscape. I work in HR, so its OK if I dont fully understand our financial statements. Excuses keep you from putting in the time to study business fundamentals, keep you from doing the hard work to gain financial literacy. Excuses lead to simplistic thinking, to believing that its enough to skim Business Acumen for Dummies, or passively observe skilled managers in the business. Excuses keep you from seeing the importance of having a broad business understanding. Excuses prevent you from rolling up your sleeves and really making an effort to learn business fundamentals.

Or it could be due to

Poor math skills Inexperience; new to the organization or industry Fear of technology Intellectual laziness Unrealistic expectations about how business understanding is learned Narrow perspective

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copyright 19922010 lominger international: a korn/ferry company. all rights reserved.

A: Understanding the Business

If you want to enhance or increase Understanding the Business

Learn to read and explain
Do

financial statements Seek coaching from experts in finance, marketing, and operations Find opportunities to serve on project teams that are analyzing business opportunities and creating business project proposals

Excuse yourself because you

Dont

work outside of a core business discipline Miss opportunities to visit with customers and to learn about your competition Limit your business reading to your technical discipline

If you overuse Understanding the Business

Channel your energy and
Do

expertise into mentoring others Consider intangibles and people issues when making business decisions

Fixate solely on the numbers Take the fun out of competing in

business

Dont

To continue learning
g g

Check out additional resources at http://Insight.lominger.com: Take the free online FYI for Insight Self-Awareness Assessment. Read the positive and negative character sketches for Understanding the Business. g See additional books and articles related to Understanding the Business. Pursue deeper self-development. Consult FYI For Your Improvement 5th Edition, available at http://store.lominger.com, to focus on competencies that comprise Understanding the Business: 5. Business Acumen 24. Functional/Technical Skills 61. Technical Learning

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copyright 19922010 lominger international: a korn/ferry company. all rights reserved.