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the message? Build your financial acumen early. Keep developing it. Combine it with a broader working
knowledge of the business. Breadth of knowledge and experience built on a solid financial foundation
could be your ticket to the top. 25, 26

Tips to develop Financial acumen
1. Don’t know the basics? Get training. Finance can feel like a strange terrain where people speak a
foreign tongue. According to a 2009 article in Harvard Business Review, a sample of US managers
scored an average of 38% on a test of financial literacy. Most didn’t know the difference between
“profit” and “cash.” Or between an income statement and a balance sheet. Two-thirds did not
understand that discounting prices affects gross margins. Financial information is critical to your
decisions. So if you’re at a loss, learn what you need to know. Get an explanation of basic techniques
and the language of financial analysis. Trends. Benchmarks. Common size. Percentage change. Ask
an analyst to explain the business models and tools used in your organization. What do they measure
and why? Where does the data come from? What else do we need to know? Find out how an auditor
looks at your operations. Learn to use budgeting and planning software. Find a book or search online
to become familiar with terms like Economic Value Added (EVA) or value-based management.
Assemble a study group or ask if your organization or a local college provides training in the basics of
finance. A course like Basics of Budget Management or Finance for Non-Financial Managers can be
invaluable in helping you think about the business in the right way.

2. Think finance is not your responsibility? Get involved. It’s easy to consider finance the
responsibility of the CFO and strategic thinking something that happens only in the C-suite. If you’re
more junior, you might not think much about how your decisions affect the overall organization. If you
lead a function like human resources or marketing, you might tune out when financial questions are
raised. But it is in everyone’s interest to include cost, investment, and other financial considerations in
decisions. Regardless of which department you’re in, you can’t be an effective strategic partner
without demonstrating a solid understanding of finance. Apply your own function’s lens to financial
matters. In human resources, how do staffing considerations, retirement benefits, or health care costs
affect the bottom line? If you are in engineering, what is the financial contribution of better design or
processes? In product or service development, how do economies of scale affect pricing and
profitability? Even in a non-profit, costs, funding, and the economic benefit of best practices are
critical factors for success. Challenge your own thinking as well as others’. Ask questions. Explore
“what if” scenarios. Work with analysts to run financial models. Find ways to constantly upgrade your
skills and thinking.

3. Focus too narrow? Expand your perspective. Do you lead a business unit, manufacturing facility,
or other operational unit? In charge of a functional group such as IT, legal, or distribution? If so, you
may focus your financial leadership solely on your department or operation. Step outside of your silo
and consider the wider picture. Get a full perspective of how your unit contributes to the whole.
Understand how the business works—how it functions within its industry. Start by subscribing to great
publications such as the Wall Street Journal, Fortune, Inc., Barron’s, the Economist, Harvard
Business Review. Scan them regularly for events and trends that affect your business now. Sign up
on sites like Hoover’s, LinkedIn, or Dun & Bradstreet to receive updates on companies you want to
follow. Read annual reports and business blogs. Download business/industry/future-oriented articles
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