What business skills do you think are essential to the success of your business?
As consumer needs have changed and markets have become increasingly competitive, it’s never been more vital for business owners, CEOs and modern financial directors to possess a wider variety of skills to ensure their business is operating at its peak performance.
This is exactly what our business improvement framework addresses; all the essential business skills necessary to run a business in the 21st century.
In this article, we’ll be looking at the eight core business skills, as well as how to improve business skills to maximise your businesses’ productivity, performance and profitability.
What are the Essential Business Skills?
Business skills can be defined simply as all the necessary skills needed to succeed in running a business. The main business skills break down into the following core categories that relate to running a business:
Without any of these eight core aspects and the correlating business skills addressed, you’ll struggle to maintain a productive workplace that grows long-term.
Why are Business Skills Important?
The importance of business skills should be apparent from the above statement, but we’ll elaborate.
Your business can benefit from business skills by allowing your company to:
- Continuously improve your operations, product and customer experience
- Maintain and improve quality
- Better manage risks and identify opportunities
- Build excellent relationships with customers, suppliers and other external stakeholders
- Create a strong and productive company culture
- Motivate and inspire employees to perform to the best of their ability
- Innovate and create to maintain a competitive advantage
- Increase operational performance and profitability through better planning and management
- Better align business strategy across the entire business to achieve long-term business goals
- Improve financial management to maximise business resilience
It’s worth pointing out, these are just the highlights of the potential benefits a wide array of strong business skills can have for your business.
Without further adieu, let’s dive into each category and examine the essential business skills involved in each.
Essential People Management Skills
It is people at the heart of every business, not machines. Currently the UK is in a business productivity crisis, at an average of 17% lower productivity than other leading G7 nations like France and the USA.
Much of this comes down to poor employee engagement. A Gallup survey reveals just 8% of UK employees are engaged at work.
Your employees are the key to unlocking business productivity and increasing performance and profitability in turn. This is why people skills are so vital for business owners.
The key people skills in business are:
- Management skills
- Leadership skills
- Emotional intelligence
- Team building skills
- Conflict resolution skills
- Networking skills
Management skills alone covers a whole host of skills in itself! This includes things like delegation skills, time and resource management, decision making skills, organisational skills, collaboration and coordination skills and so many more. These are what we’d call the hard skills involved in management, but the soft skills are just as important, if not more so.
Soft skills for people management include leadership skills, emotional intelligence, conflict resolution skills and team building skills. At points, they’re all intrinsically tied.
Leadership skills are a vital component of management. If employees don’t feel they have a manager who can lead and direct them, engagement will decrease and the team will be aimless.
A huge part of being able to lead a team stems from being able to understand them. This is where emotional intelligence comes in as a key business skill. Emotional intelligence helps us understand why people behave the way they do. This can help build better, more productive teams by understanding the intrinsic motivations that drive people.
Emotional intelligence can also help in conflict resolution. Conflicts in the workplace happen. People are, after all, incredibly different. Knowing how employees will react to a certain event, workload and so on can help reduce conflicts in the first place, but having the emotional intelligence to empathise with issues and come to more agreeable resolutions is an essential business skill for any manager, team leader or business owner.
All these skills above combined help create team building skills. Strong teams are the foundation of any productive workplace. But these don’t just magically appear (unless you’re very lucky!). Teams are tactically built through selective hiring, managed through excellent leadership and behaviour modelling and maintained through emotional intelligence to continuously inspire and motivate employees.
Last but by no means least, the employees in your workplace aren’t the only place where your people skills are vital. You’ll also need networking skills to connect with external stakeholders, suppliers and more.
Risk Management Skills
Understanding risk is a vital business skill. Entrepreneurs and business owners are certainly natural risk-takers, as otherwise they would never set up a business in the first place. But to navigate risks, as well as opportunities, successfully, these risks need to be calculated, not just done for the thrill of it.
Risk management involves several key skills, in main:
- Good understanding of data
- Analytical thinking
- Decision making skills
- Problem solving skills
The huge swathes of data available to businesses now means business owners must have a solid foundation of data comprehension within their skillset.
However, data alone does not navigate risks. Business owners must be able to take the insights revealed from data and apply analytical thinking and problem solving skills to figure out how to best utilise that data to aid decisions.
Ultimately, these aid stronger decision making skills. Decisions based on data as well as firm reasoning help businesses better navigate risks and opportunities and lead to better outcomes.
Quality Management Skills
Quality is so often defined as “fit for purpose”. This idea of quality suggests that the minimum standard is the quality standard that businesses can aim for.
It’s a dated idea and one of the reasons many businesses struggle with long-term growth; as they lack the vision to see beyond the current way things are.
Quality should instead be thought of as a process of continuous improvement. That is, businesses should always be aiming to improve quality. Whether that be the quality of their customer experience, the quality of their service or product or the quality of their operations.
Much of the research and talk around continuous improvement is thought only to apply to the manufacturing and automotive industries, for example lean six sigma. But it’s not the case.
Business owners can use their skills to create a culture of continuous improvement. They can achieve this by documenting business processes to allow them to be measured, analysed and reviewed for potential improvements. This involves both data and analytical skills as well as planning skills to successfully implement developments.
Your communications are how you connect with people, both internally and externally. Communication skills are therefore vital to running a successful business.
Of course, there are communication skills that business owners (and employees!) should possess on an individual level. This includes skills like active listening, questioning skills, verbal communication skills, written communication skills, public speaking skills and interpersonal skills.
These individual skills help aid the wider business skills needed for communications. These come in the form of:
- Marketing, advertising and sales skills
- Customer service skills
- IT skills
Marketing and advertising are a business’s main form of communication with their customers. The skills needed to successfully market your business are vast. There are hard skills such as digital media skills, commercial awareness and digital analytics skills as well as softer skills like storytelling skills, creativity and more. While business owners don’t need to possess all these skills themselves, the business as a whole needs to have individuals who can offer these skills and knowledge.
While sales is intrinsically linked to the marketing department, there are some unique business skills necessary. For starters, negotiation skills have to be top of the agenda for both individual sales employees, but also for those operating at a senior level. There is no one approach to negotiation that is guaranteed to work, instead negotiation skills often come down to reactivity and flexibility.
Customer service is another vital aspect of businesses. It is one of the few areas where businesses stand out from competitors in a market where price points and margins have become slimmer and slimmer. The individual skills mentioned above matter here, but what matters more is ensuring everyone in your team has them to ensure an excellent customer service experience every time.
Technology and communications are irrevocably interlinked in the 21st century. We use a huge range of communication tools for both internal and external communications. As such, a firm understanding of the best technologies available to aid your businesses communications is a vital business skill for long-term growth.
Workflow Management Skills
Workflow is the day-to-day operations of your business. These are the technical skills necessary to create high performance business operations.
Project management and planning is an essential business skill to ensure optimal workflow. Business owners in particular, as well as other senior leaders, are needed to be in more places than ever at any given time. Effective management of time, resources, money and employees will help operational performance.
Time management is a particular trap many business owners and leaders seem to fall into. This in turn, makes delegation a key business skill. Time is our most precious resource and leaders should spend theirs on the activities that generate the most revenue, not activities that they simply feel unable to delegate.
Though we’ve mentioned management skills above, it’s worth expanding on here as management skills are essential for a well-functioning workplace. Gallup research reveals that managers alone account for at least 70% of variance in employee engagement scores. As we’ve already highlighted, businesses with low employee engagement are businesses with low productivity. To improve operational performance therefore means having the right managerial skill set to ensure employees across the business are engaged daily.
Leadership Management Skills
Though leadership also takes many other skills which we’ve discussed throughout this article, it all starts with a business vision.
When people first start their business, they have a clear vision in mind. But as months and years go by, the day to day operations tend to get in the way and the original. vision can often fall into the background.
A business vision is what ties a business together. It gives employees a collective goal to work towards together and ultimately ties each department together with a clear destination.
The business skills involved in creating a cohesive business vision are:
- Conceptualisation and creative thinking
- Building mission statements
- Identifying objectives
- Critical thinking
- Strategic planning
Creating a business vision begins with creative thinking. After all, you need an idea. More importantly, you need an idea that solves a problem. Then you need to conceptualise that idea into a more coherent goal with a matching strategy.
Building your mission statements is a key element of your business vision. This is your purpose for being. This is the reason your employees come to work everyday. Mission statements allow employees to see beyond the end of their desk and instead focus on the larger goals, which can motivate and inspire them.
Once you have your mission statements, you can identify business objectives that will allow you to reach them. This will take a lot of critical thinking and strategic planning to create realistic, achievable goals that align with your overall business vision.
Financial Management Skills
Businesses need to make a profit, or at the very least break even in the first few years. To achieve this, business owners or financial directors need a range of financial skills to ensure business viability.
Financial business skills include:
- Accounting, banking and bookkeeping
- Financial reporting
- Business intelligence
- An understanding of economics
- Cash flow management
A basic understanding of economics is a valuable asset in business, particularly a more up to date understanding wherein businesses realise the value they can create externally for economies and societies.
Alongside this there are a range of fundamental financial skills necessary to run a business successfully. This includes accounting and bookkeeping to ensure good money management, as well as to aid transparent financial reporting. Ultimately, it ensures businesses are running a robust financial strategy without room for error.
Business intelligence combines business analytics, data and infrastructure to help businesses make better financial decisions. This could be identifying areas of the business where the most value could be created with additional funding or any number of other ways. Business owners and FDs must have a firm grasp of business intelligence data to maximise these opportunities and increase their competitive advantage.
For SMEs in particular, cash flow is the most common issue faced. Around 57% of small businesses in the UK have experienced issues with cash flow. This makes sense. Cash flow is the lifeblood of a growing business. If mismanaged, the consequences are dire. Knowing how to monitor, protect, control and utilise your cash flow is an essential business skill.
Core Beliefs and Values
Our beliefs are our core values. They’re why we do what we do. They’re why you started a business. They’re why your employees come to work.
Company cultures are the success or failure of a business and they are all based on the core values and beliefs we hold.
Research backs this up:
- 46% of job seekers say company culture is very important when choosing to apply to a company.
- 91% of managers say a candidate’s alignment with company culture is equal or more important than skills and experience.
- 47% of active job seekers say company culture is their driving reason for looking for work.
- 35% of workers say they’d pass up a job offer if the company culture wasn’t the right fit.
All this to say, a weak company culture is derived from a lack of shared beliefs and values. To create a successful company, everyone in the business must understand the value of the work they’re doing and how it is contributing not only to the business and the customer, but to wider society.
The core values and beliefs that drive your company, only you know. But in general, companies with a strong culture share the following core values and beliefs:
- A commitment to equality, fairness and inclusivity
- Flexible working practices
- A commitment to mental health and well-being
- A commitment to environmental responsibility
The Core Business Skills are Intrinsically Tied
As you can see, though our business improvement framework addresses all of the essential business skills necessary to run a successful business, there is much overlap between the areas.
This is because to survive in the 21st century, businesses need to take a more integrated approach. Departments can no longer be siloed with little purpose, employees can no longer exist within static job descriptions and businesses can no longer run using the same management practices as the 19th and 20th century.
Rethinking business means rethinking the business skills we need to make work better, which is exactly what The Awardaroo Way addresses.