# Business Competencies: What Employers Mean and What Each Looks Like at Work Canonical URL: https://headwayskills.com/knowledge/soft-skills-at-work/business-competencies/ Markdown URL: https://headwayskills.com/knowledge/soft-skills-at-work/business-competencies.md Entity type: Article Last updated: 2026-07-07 Language: en Primary audience: professionals improving influence at work Owner: Headway Skills Contact: https://headwayskills.com/contact/ ## Short answer Business competencies explained: functional vs. behavioral, 10 examples from business acumen to teamwork, and how to show them in interviews and reviews. ## Key facts - Title: Business Competencies: What Employers Mean and What Each Looks Like at Work - Category: Soft Skills at Work - Primary skill: Influence - Related skills: Working with Your Manager, Building Self-Awareness - Primary keyword: business competencies - Source page: https://headwayskills.com/knowledge/soft-skills-at-work/business-competencies/ ## What this page covers - Business competencies explained: functional vs. behavioral, 10 examples from business acumen to teamwork, and how to show them in interviews and reviews. - Practical guidance for business competencies - How this topic connects to Influence ## Detailed explanation Business competencies are the abilities an employer expects you to show at work, described as behavior you can observe rather than qualifications you hold. They come in two kinds: functional competencies that belong to one job, like SQL for a data analyst, and behavioral competencies that go with you into any role, like communication, teamwork and business acumen. When a job ad or a review form gives you a list like this, it can read like a description of a finished professional, someone you are not yet. That reading is understandable, but it is wrong. Every item on the list describes something people do, and anything people do can be practiced. The list also gets much easier to work with once you can picture what each item looks like on an ordinary workday. ## Two meanings of "business competencies" The phrase has two meanings, and they often turn up side by side. The older one is about companies. In their 1990 Harvard Business Review article, "The Core Competence of the Corporation," C.K. Prahalad and Gary Hamel described core competencies as an organization's distinctive strengths. In their account, a real core competency opens access to many markets, adds to what customers value, and is hard for competitors to copy. When a company's website talks about its competencies, this is usually what it means: what the business as a whole does best. The second meaning is about you. An individual competency combines knowledge, skills, attitudes and behavior, and it shows in how you actually do the work. That makes it broader than a single skill. A job description lists your duties. A competency describes what doing those duties well looks like. So when an employer names a competency, it is describing behavior it wants to see, not a box to tick on [your résumé](/knowledge/soft-skills-at-work/how-to-list-soft-skills-on-resume/). Individual competencies divide into two groups. **Functional competencies** belong to a specific role: HR policy administration for an HR professional, or SQL and data visualization for a data analyst. **Behavioral competencies** apply in any role: how you communicate, work with others, lead, and conduct yourself. Organizations usually combine both in one competency framework for each role. Your education mostly supplies the functional side. The behavioral side is mostly learned at work, which is why it can feel like the part nobody explained. A shared reference point for that behavioral side does exist. NACE, the National Association of Colleges and Employers, defines [career readiness](/knowledge/employability/career-readiness-skills/) as a foundation from which graduates show core competencies that prepare them for the workplace and for managing their careers. Its framework names eight competencies that carry across occupations and industries rather than belonging to one job. They include communication, teamwork, critical thinking, leadership and technology. NACE task forces drawn from universities and employers developed the list, and every competency is tied to behaviors you can observe. In practice, that makes it the nearest thing graduates have to a list that universities and employers agree on. ## 10 business competencies, and what each one looks like at work The entries below mix functional and behavioral competencies, because a real competency framework mixes them too. Each entry shows what the competency means in practice for someone early in their career, not only for a senior manager. ### 1. Business acumen Business acumen means [understanding how a business works](/knowledge/influence/how-to-develop-business-acumen/): how it makes money, what it spends money on, and how its competitors operate. It ties the other competencies together, because it lets you see how your own task fits into the whole. It is easy to assume it only matters for managers, but it applies just as much at the start of a career. A junior employee who understands why a deadline matters to a client, or why one product line gets more attention than another, makes better calls on small things every day. Those small calls are what colleagues notice long before anyone gives you a big decision to make. ### 2. Financial literacy Financial literacy is the part of business acumen that deals with numbers: reading a budget, following a forecast, understanding what a cost or a saving means for the business. You do not need to be an accountant. You need to know enough to see whether a proposal is affordable and what it would replace. Budgets are often where a newcomer first meets this competency, usually when an idea runs into one. > In my student job, I often think: why don't we just do this, and this — it could be so great. And they say, yes, but we also have to think about the budget, and we have to bring the others in and agree on what should happen. And I'm like, can't we just do something revolutionary? > > That's something I need to teach myself: you might have to be here for two or three years before you get to do the exciting things. That was one of the young people we interviewed about starting work. She is describing the moment this competency starts to form: realizing that an idea has to fit a budget and win agreement before it can happen. Building cost and agreement into a suggestion from the start is something you can practice, and it changes how your ideas are received. ### 3. Strategic thinking Strategic thinking means turning information into a view about where the work, or the business, should go next. One example is a sales manager who studies market data and finds a new group of customers worth targeting. The same habit works at entry level: noticing a pattern in the requests that come in, or in where projects tend to stall, and saying what it means for the plan. You exercise this competency through analysis and judgment on ordinary tasks. You do not need a title for it. ### 4. Customer focus Customer focus means keeping the end user in view while you deal with internal demands. Think of a procurement employee who understands the business. They do not simply buy the cheapest goods to please the finance department. They weigh cost against quality, because poor goods let customers down. The skill is holding several interests at once and finding the option that serves the business as a whole. Early in a career, it often shows up as asking who a piece of work is really for before deciding how to do it. ### 5. Communication Communication is behavioral, and it appears in almost every competency framework. At work, it is concrete: stating your main point first, keeping messages brief, listening to understand before you answer, and choosing whether a conversation or an email suits the message. It is also one of the easiest competencies to show, because almost every piece of work you hand over is either clear or unclear to the person who receives it. ### 6. Teamwork Teamwork as a competency is not the same as being easy to get along with. In practice, it means putting the shared goal ahead of your own agenda, doing whatever work the team needs, sharing what you know, and following through on what you commit to. It also covers disagreement: raising concerns before a decision is made, then backing the decision once it is. A competency framework judges teamwork by these behaviors, not by how many group projects you list. ### 7. Leadership Leadership appears on many competency lists, sometimes as managerial effectiveness. Early in a career, it rarely means managing anyone. It means taking ownership of a piece of work, moving it forward without being chased, and helping others move theirs. In competency terms, leadership is a pattern of behavior. Treat it as something you can show in a project long before you have a title that says "lead." ### 8. Values, ethics and commitment Many frameworks list values and ethics and commitment as behavioral competencies. They describe how you conduct yourself: handling confidential information properly, being honest when something has gone wrong, keeping commitments, and treating colleagues with the same respect whatever their role. None of these behaviors stands out on a good day. Over months, they add up to whether people trust you with more responsibility. ### 9. Technology Using digital tools well is a named competency in its own right. NACE includes technology in its eight. In practice, it means picking up new systems quickly, using the right tool for the task, and using it in a way that makes work easier for the people around you. It applies in every function, not just technical roles. ### 10. Role-specific (functional) competencies The last group is the technical knowledge your particular job needs: HR policy administration for an HR professional, SQL and data visualization for a data analyst, and their equivalents in every field. This is usually the part your education has prepared you for, and the part a job ad lists most explicitly. Employers combine it with the behavioral competencies above in one framework for each role, so strong technical knowledge counts for most when the behavioral side is there too. ## How business competencies are assessed, and how to show yours Competency lists are written for a reason. Organizations use them to set performance expectations, plan training and development, and decide who to hire. A single list lets them hire, evaluate and develop people against the same standard. In practice, that means the competencies in a job ad are likely to come back as interview questions and, once you are hired, as headings in your [performance review](/knowledge/working-with-your-manager/performance-review-preparation/). The way they are tested matters more than the list itself. Competencies are assessed through examples of past behavior, not through self-description. In the Lominger competency model, business acumen means knowing how businesses work and how competitors operate. A matching interview question asks you to describe a time you combined financial, organizational and industry information into a plan or initiative. Saying "I have strong business acumen" answers nothing. A specific situation, what you did and what came of it answers the question. So the useful preparation is to collect evidence, not adjectives. For each competency in a role you want, find one real example: a part-time job, a project, a volunteer role, a group assignment. Note what you did and what changed because of it. Your functional competencies are probably already documented by your education. The behavioral ones are the half no transcript certifies, so it helps to [check which behaviors you can already show](https://assessment.headwayskills.com/) before an interview asks you to prove them. If some come up empty, that is not a verdict on you. They are behaviors, and they can be built. ## What makes these competencies easier to build Look back over the ten and a pattern appears. The competencies that feel hardest to pin down rest on a few things you do with other people: understanding what the organization needs, agreeing with your manager on what good work looks like, and seeing your own strengths and gaps clearly. **Influence** is where business acumen and customer focus turn into results. Taking responsibility for the bigger picture means thinking beyond your own task to the team's and the organization's goals. When you want to change something, it means preparing first: working out what is in it for the people who decide, and how the decision actually gets made. A newcomer whose suggestion already accounts for the budget and the people who need to agree is far more likely to be heard. Over time, delivering on that kind of suggestion builds the reputation that gets you into bigger conversations. **Working with Your Manager** is where a competency list becomes concrete. Your manager is usually the person who will rate you against the framework, so the most useful conversation you can have is about which competencies matter most in your role and what doing them well looks like here. Regular one-on-ones, a habit of making your results visible, and a review prepared with specific examples turn an abstract list into shared expectations you can actually meet. **Building Self-Awareness** decides where your effort should go. A list of ten competencies is only useful once you know which ones play to your natural strengths and where your blind spots are. Asking for specific, future-focused feedback ("what would make my next report more useful to you?") shows you what others see that you cannot. The point is not to fix everything. It is to know what you are building on and what to build next. The **free Job Skills Test** [scores you on these three skills](https://assessment.headwayskills.com/) and shows which one to work on first. It also covers nine more, because competence at work rests on **twelve skills in all**. A lower score names a behavior you can start practicing next week. It does not set a ceiling. You may already do a few of these things without having a name for them. If a part-time job ever left you wondering why the manager worried so much about waste, or about the items that sat on the shelf, you were already asking the question business acumen starts from. The competencies you have not built yet develop the same way, through practice and in your own style, without becoming someone else. They also weigh more each time your work starts to touch budgets, customers or other people's decisions, so knowing your starting point early helps. The natural next step is to see what that starting point is. ## See which business competencies you can already back up All that is left is to put your own starting point on paper. The Job Skills Test is a **free** self-assessment of your work skills. It scores you across all twelve skills behind competencies like these and shows which ones would make the biggest difference to your next application, interview or review. It takes about 7 minutes. **[Get my skills profile](https://assessment.headwayskills.com/)** *Free, takes 7 minutes, results shown instantly.* ## Who this is for - Professionals building practical workplace skills - Readers looking for specific, usable work advice - Managers, educators, and coaches supporting career readiness ## Common questions ### What is this guide about? Business competencies explained: functional vs. behavioral, 10 examples from business acumen to teamwork, and how to show them in interviews and reviews. ### Which Headway skill does this connect to? This guide connects primarily to Influence. It also relates to Working with Your Manager, Building Self-Awareness. ### What is the recommended next step? Use the free Work Skills Test to reflect on which work skill to improve next. ## Related pages - https://headwayskills.com/knowledge.md - https://headwayskills.com/knowledge/soft-skills-at-work.md - https://headwayskills.com/knowledge/influence.md - https://headwayskills.com/knowledge/working-with-your-manager.md - https://headwayskills.com/knowledge/self-awareness.md - https://headwayskills.com/work-skills-test.md ## Citation guidance Use the canonical page when citing this content: https://headwayskills.com/knowledge/soft-skills-at-work/business-competencies/ Preferred summary: "Business competencies explained: functional vs. behavioral, 10 examples from business acumen to teamwork, and how to show them in interviews and reviews." ## Change log - 2026-07-07: Content collection version published.