Business acumen: a critical concern of modern leadership development Global trends accelerate the move away from traditional approaches E. Ted Prince C orporations assess executives for just about every competency except business acumen – arguably the one most valued by shareholders and profit-making companies. But a sea change is taking place. Several new factors – involving the discipline of leadership development and external economic factors – are driving the realization that leadership development needs to focus specifically on business acumen. Shortcomings of traditional approaches Shortcomings in traditional leadership approaches, which rely on personality and competency assessments as the scientific core of their approach, are becoming increasingly obvious. These include: B mounting evidence that traditional assessments have no direct link with financial outcome; B shortcomings in financial-literacy and business-simulation approaches; and B the emergence of the disciplines of behavioral economics and finance. Traditional assessments have no direct link with financial outcome The business side of companies has long made the observation that traditional assessments have no direct link with financial outcome. This view now has academic respectability from a number of sources, including past editors of the respected journal Personnel Psychology . Their work shows that personality tests have little or no impact on job performance and outcome (Morgeson et al., 2007). Research by Peter Cappelli, at Wharton, has also cast strong doubt on the use of traditional personality and competency assessments (Cappelli, 2007). Shortcomings in financial-literacy and business-simulation approaches In response to the idea that traditional leadership approaches have serious flaws in the business and financial arenas, many corporations have turned to developmental approaches designed to help executives to gain training that is more relevant to their business needs. The two principal approaches used have been to target financial literacy, and to conduct business simulations. PAGE 6 j HUMAN RESOURCE MANAGEMENT INTERNATIONAL DIGEST j VOL. 16 NO. 6 2008, pp. 6-9, Q Emerald Group Publishing Limited, ISSN 0967-0734 DOI 10.1108/09670730810900811 E. Ted Prince is the founder and Chief Executive, Perth Leadership Institute, Gainesville, Florida, USA.