#96 - Mind your own business!
4 Feb 26
Leadership does not operate in a vacuum. Every decision a leader makes; about people, priorities or performance has commercial consequences. Leaders who lack a working understanding of how their organisation creates value, manages costs, and generates profit are at risk of making well-intentioned but damaging decisions. Drawing on insights from The Personal MBA by Josh Kaufman, this Springboard Spotlight! explores why business literacy is no longer optional for effective leadership.
What?
Being an effective leader today requires more than people skills, emotional intelligence, and technical competence. It requires business literacy.
Josh Kaufman’s The Personal MBA makes a simple but powerful point: you don’t need an MBA to understand how businesses work but you do need to understand the fundamentals. Value creation, cash flow, pricing, incentives, constraints, and trade-offs sit behind almost every strategic and operational decision.
When leaders understand these mechanics, they can:
-
Align team activity with commercial reality,
-
Make decisions that stand up beyond their function,
-
Translate strategy into action without unintended consequences.
Why?
Many leaders rise through the ranks by being excellent specialists. Over time, however, decisions become less technical and more systemic.
Without business awareness:
-
Leaders optimise locally while damaging the wider system,
-
Well-meaning initiatives quietly erode margin or capacity,
-
Decisions feel 'right' but produce poor second and third-order effects.
Business-savvy leaders, on the other hand, understand impact. They recognise that:
-
Every decision has a cost, even if it’s hidden,
-
Trade-offs are unavoidable, so they must be intentional,
-
Resources are finite, and priorities must reflect that.
This awareness doesn’t make leaders less human, it makes them more responsible.
How?
Leaders don’t need finance degrees. They need fluency.
Practical steps include:
-
Learning the basic building blocks of how value is created and captured,
-
Understanding how money flows through the organisation,
-
Appreciating how incentives shape behaviour,
-
Asking better questions about cost, risk and return before acting.
The Personal MBA is a useful reference point because it strips business back to its essentials making it accessible, practical, and immediately applicable to leadership decisions.
The goal isn’t to turn leaders into accountants. It’s to ensure their judgement is grounded in commercial reality.
In Summary
Leadership effectiveness depends on context. And the dominant context in most organisations is business.
Leaders who understand how the business works make better decisions, protect long-term value and lead with credibility. Those who don’t may still have good intentions...but good intentions alone rarely produce good outcomes!
Business literacy is no longer a 'nice to have.'
It’s a core leadership capability!
Whenever you're ready, here's how I can help you:
- Resources - Reading is an essential component to developing your own authentic leadership style. Check out my resources page for really inspiring books which I have found invaluable within my own leadership journey,
- Springboard Store - Check out my store where you will find a mixture of FREE and paid products.
- Leadership Skills Evaluator - If you are an experienced leader, how do you assess if your current skillset is up to date, or if you have any gaps? Or understand if it is developed enough to equip you for the next two roles? This is where the Leadership Skills Evaluator comes in. Answer 30 questions spread across 10 key leadership areas to assess your current capability. It's absolutely FREE to take the assessment, and you will receive a personalised report delivered immediately into your Inbox on completion! Here's the link.
Responses