What PR pros mean when they say ‘business acumen’

Much has been made of financial literacy and business prowess, but what specific skills are industry leaders talking about? A study picked Page Society members’ brains for a consensus.

“Business acumen” is well on its way to becoming industry jargon, but do PR pros all mean the same thing when they use the phrase?

Turn to any number of industry publications, and you will find a writer opining on the lack of business skills among the communications cohort. Many communicators will guiltily concede that they don’t like numbers—and some will angrily push back on language that they feel lumps them in with marketers.

However, business acumen is quickly becoming a key differentiator for PR pros looking to progress in their careers. As the industry has changed and business leaders have turned to communications experts to help guide policy and business strategy, it has become essential for PR pros to know more than the nuts and bolts of communications tactics.

But what does the industry as a whole mean when it discusses “business acumen”? 

Frustrated junior PR pros might be justified in throwing up their hands at the vague assertion that there is a vast amount of knowledge they lack—and no clear definition for how to go about filling in the gaps.

A study in the Institute of Public Relations’ Public Relations Journal attempts to define the term once and for all.

The study—which applies a series of surveys to home in on consensus definitions—turned to Arthur Page Society members, many of whom are top communicators at their organizations. It asked them a key question: “In the consensus view of the senior corporate communications leaders, what specific knowledge areas fall under the domain of business acumen?”

The answer boiled down to an understanding of how your organization brings in money (or offers value).

It states:

Many respondents said that, at its most basic level, business acumen is about understanding “how a company makes money” and how it creates value for its stakeholders (i.e., the business model).

… Professionals should have “finance understanding—although not as deeply as a finance professional” and “financial analysis—ability to read and interpret financial statements.” As one respondent said: “Using my corporate experience, it is the ability for my PR/comms team to understand how our company generates revenue, makes a profit and serves our customers. This includes being able to read and understand our basic financial reports and the attributes of our publicly traded stock.”

Does business acumen include financial literacy? Math-phobic PR pros will be relieved to know that PR pros needn’t have a deep understanding of algebraic formulas or even long division. 

The study continues:

On a related note, respondents indicated that professionals must know at least the basic language of finance and business. For example, a panelist shared that professionals need to be able to “understand key business terms and be able to discuss those terms with your own subordinates or senior management.” Another leader said that professionals should have “command of investor terminology and language.” 

One key way that communicators can add to their business acumen is to research their particular market and vertical to understand how their organization or client competes.

The study adds:

Turning to markets, professionals should understand “the marketplace and the economy, and how they affect the business.” Professionals should “understand the sector/industry in which the company operates” including “knowledge of trends, market and geopolitical forces and potential drivers and detractors of the business.” This includes tracking peers and competitors within industries and markets. One panelist argued that public relations and communications professionals should strive to “always [be] the most informed person in the room about external trends, challenges and opportunities.”

The study summarizes the many facets of “business acumen” into a list that includes:

  • Knowledge of business model, stakeholders, markets, stock assets, etc.
  • Ability to synthesize business concerns through a “communications lens”
  • Commitment to ongoing learning

Some areas that a PR pro should become familiar with:

  • Finance, stock markets, quarterly reporting terms, etc.
  • Operations and strategy, including supply chain, organizational structure, brand position
  • Human resources, employee comms, culture, diversity and inclusion, etc.
  • Technology, cata and analytics, measurement, ROI
  • Marketing and sales, consumer journey, sales funnel, etc.
  • Legal, public policy, regulatory compliance, corporate governance, social responsibility

The best communicators will then use that knowledge to give finely tuned and expertly timed advice to top leaders in their organizations. 

To work on your business acumen and become a highly valued and financially rewarded PR expert, join us for our upcoming Business and Finance Boot camp for Communicators in Washington, D.C.

COMMENT

One Response to “What PR pros mean when they say ‘business acumen’”

    Ronald N. Levy says:

    PR business acumen–exceptional skill in recognizing and responding to PR opportunities and perils–is leading managements to value five profit-enhancing supports a PR firm can provide for management.

    .1. MARKETING SUPPORT. Our increasingly educated public and the growth in information available online are both increasing public demand for products that do more than the obvious—foods that not only delight but nourish, products bought not only for utility but to help a good cause, and sometimes increased consumer attention to not just “should I get one” but “which one should I get”—which have appealing features, durability or other reasons to buy.

    .2. FINANCIAL PR. It used to be that a financial PR firm was retained because “they have contacts with the right people” but increasingly “the right people” may include your own management and mid-level executives. This is because charges of inside trading or “pumping” the stock price may be made against almost anyone and be damning no matter how untrue. And sometimes it IS true so financial PR increasingly includes internal communications on cautions to avoid breaches of the law. It’s not only what not to do because it’s wrong but what not to do because it could LOOK wrong.

    .3. WASHINGTON PR. “What profiteth a man,” it is written, “though he gaineth the whole world if he loseth his own soul?” The first part of that—“what profiteth. . .” catches management’s attention because corporately and individually, the potential earnings for a whole year or several years can be
    sharply increased–or wiped out with reputational damage for years to come—if a company gaineth sales and earnings but “loseth in Washington” to face crippling, unduly restrictive regulation. The skill of great Washington PR teams is not just winning fights but sometimes avoiding them. Less blood, less suspicion of the company, more profit and actually it’s sometimes much easier than it looks.

    .4. PROTECTIVE PR. It used to be that if a top manager was credibly accused of harassment or saying something nasty about gays or an ethnic minority, a quiet settlement could make the complainant and lawyer go away happy. But these days word of a “big bucks” settlement can attract dozens or even scores of additional claimants! Some may not even have been in town on the days of claimed injury. In some ways a tougher charge against management—tougher because it’s often true, is that “they KNEW” of the danger—product failure or something else.

    They did know! The internal report on every major new drug includes reference to “AEs,” Adverse Events, side effects. Even non-pharmaceutical products are KNOWN to be possibly harmful especially if misused. So you protect management if every time you make a product introduction, you have not only the usual rah-rah about how good it is but also consumer information on “read the label” plus information for doctors on when NOT to prescribe or recommend the product. This is not alarmist. The manufacturer of a pain reliever that has saved millions of patients from agony—agony!—that manufacturer faces actual bankruptcy because of the credible claim “they KNEW” the pain reliever could be addictive (especially if improperly used).

    5. INTERNAL COMMUNICATIONS. Why pay perhaps three times as much per hour to have internal communications overseen by a great PR firm when an inside editor might do the work just as well or even better? It’s because an internal editor can be pushed around and manipulated by managers and co-workers far more easily than a Senior VP or Managing Director of a great PR firm. So internal communications managed externally are more likely to be free of obvious baloney, perhaps unlawful, no matter how much someone influential would like to see it used.

    If you suggest to management the appeal of having a PR firm—or several of them—to work on these five profit-building PR achievements, avoid seeming to favor one PR firm over others. What profiteth a in-house PR person, though he gaineth gratitude and respect from management for the helpful suggestion, if he loseth credibility for seeming possibly biased? Better to suggest retaining an impartial team like knowledgeable and neutral Ragan–with savvy PR veterans plus top-of-the-class kids who can be brilliant and blunt–to help select a great PR firm, help management decide on the assignment and budget, then help judge the quality of performance.

    The objective could be called Bottom-Line PR, PR guided by business acumen.

    An advantage of bringing in an expert PR matchmaker like the Ragan team is their ability to match up management’s needs with the special advantages of individual PR firms.

    . A huge PR firm my have so many offices that almost anywhere you have a PR opportunity or PR peril, the PR firm has an office with skilled PR people nearby.

    . A small PR firm may point out that you’ll deal directly with PR people who do the work rather than with senior smilers and handshakers who don’t.

    . A top financial PR firm may promise you correctly that it has ready access and trust from the world’s top financial media where some of the firm’s senior PR executives used to work.

    . A specialized PR firm in health, technology, travel or food may offer you both ready access to top media in that field—a big advantage if media trust of your PR message may be enhanced by trust in the messenger—and your technical people get specialized communicators who understand the language of your trade, not just general PR people.

    . “We’re senior PR experts working for very little money because we are trying to get our new firm started,” a new firm may point out.

    . “For the PR work you need,” a veteran firm may say, “we’ve been there and done that,” and “with us you don’t have to wonder whether formerly great PR people will consider that the work is way beneath them. The mistakes that can be made with your situation, we learned them long ago so you are protected.”

    It goes on and on—truthful advantages cited by different PR firms—and a team like Ragan can help your management choose the package of advantages likely to be best for what management needs. It’s like getting not just good medicine but exactly the right medicine for your situation, not just a good computer system or telephone system but one that expertly matches what’s available with what you need.

    PR business acumen covers a wealth of PR knowledge and skills, so when management chooses one PR firm or more than one, a well-advised management can bring in all kinds of abilities that add to Bottom-Line PR success.

PR Daily News Feed

Sign up to receive the latest articles from PR Daily directly in your inbox.