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Business Acumen - C8
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Business Acumen - C8
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BUSINESS ACUMEN - C8 QUESTIONSWITH COMPLETE SOLUTION
n Key Compentencies for Compensation Professionals - Financial Management, HR management,
Resource Management
Financial Management - broad understanding of finance, understands ROI of programs, assess
performance based on stated objectives,
HR management - assesses current and future staffing needs based on organizational goals and budget
realities, ensures staff are selected, rewarded and retains, takes corrective action, understand org design
principles
Resource Management - determines sources collects to ake fact based decisions, partners, uses efficent
and cost effective approaches to things
Business Acumen skills and behaviors - mission, vision, values, business strategy, org culture, HR strategy
Business Acumen for Comp Professionals - demonstrate influencing and negotation skills, be expert with
data, navigate regulatory challenges
Importance of business acumen - contributes to org success, engages with senior leaders, self
improvement and career development
BA: contributes to org success - develop framework for thinking strategically, be able to explain the ROI
of initiatives and the value to the business
BA: engaging with executive leadership - thinking as business leader, helps other to see you as a leader
BA: self-improvement and career development - be able to see the connections between your actions
and the greater organization, better able to plan, organize and guide activities, confidence building.
why are orgs in business - money! (mission, vision, values, strategy, profit model.
STRATEGY - broad framework of priniciples and approaches that guide day to day decisions affecting the
business. including how the company positions itself in the market
Competitive strategy - three primary strategizes: operational excellence, product/service leadership,
customer intimacy
operational excellence - price/cost based strategy that includes a combination of price, quality, and
dependablity. (good price, everywhere!
product/service leadership - innovation-basded strategy that focuses on product deveopment and
market exploration (APPLE)
customer intimacy - solutions based strategy that focuses on creating results for the carefully selected
customers by building bonds to meet/exceed customer needs
market position - STAR, QUESTION MARK, DOG, CASH COW
, STAR - high market share, high growth potential
Question market - low market share, high growth potential
DOG - low market share, low growth potential
CASH COW - high market share but low growth potential. solid steady money maker
business life cycle - start-up, growth, mature, decline
start up - little or no formal policies or procedures, focusing on gaining capital, initial sales
growth - focused on growing sales, increasing distribution capacity, starting to standardize things
mature - focus on maintaining market share, improving productivity. higher level of bureacracy and a
good amount of cash on hand
decline - revenues are declining, must decided to reinvest in current products or create new ones.
linking business strategy with Comp Strategy - investment in resources, fixed and variable compensation,
market competitive posture
investment in resources - may be willing to invest more if they see a high rate of return on that
investment
fixed and variable compensation - align variable compensation with the business goals
market competitive posture - decide what your company strategy is: lead, lag, lead-lag
alignment of compensation strategy - an org's comp strategy should be aligned with it's total rewards
and overall HR strategy,
qualitative data - the people side of the data - use this information to help frame successful appeals
quantitative data - the numbers data. get the facts straight
multiple perspectives - look at things from different viewpoints: operating departments, human
resources, legal, finance, investor
operating departments - look at the day to day
hr position - need to attract, retain, and reward people
legal - must be comply with local, regional and national laws and regulations
finance, - can we make more money doing this? spend wisely
investor position - how will this help the bottom line?
collaborate - contribute to the goals, identify key influencers and decision makers, consider how they
achieve their objectives, give special consideration to partnerships with finance
stay connected with the business units -
individual contributors - have the ME perspective
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