In today’s data-driven environment it’s important not to confuse analytics with acumen. Analytics may help facilitate or enhance business acumen or astuteness, but it certainly doesn’t replace it. The Oxford English Dictionary defines acumen as “the ability to make good judgments and quick decisions.”
Analytics, on the other hand, is logical analysis derived by applying some type of algorithms or mathematics to data. In 2007, Davenport and Harris described analytics as a set of technologies and processes that use information and data to understand and analyze business performance. Certainly well-thought out logical analysis can be very useful in understanding and addressing business situations and making quick decisions that will produce a desired outcome. But there’s more to business acumen than logical analysis. A McKinsey article I once read framed this well, “good analysis in the hands of managers who have good judgment won’t naturally yield good decisions.”
Research by the Perth Leadership Institute, the Conference Executive Board (CEB) and others offer a variety of recommendations for how we can improve our business acumen. One of the key competencies cited is strong, quantitative skills. Why? Because being able to see the big picture requires an understanding of your market and how your organization operates in that market, and what drives profitability and cash flow for your organization. This is where analytics come into play.