09-07-2025
3 Key Factors To Having A High Business IQ
Sherre DeMao is CEO of BizGrowth Inc., a strategy, training and IP development firm focused on growing entrepreneurial enterprise value.
Most businesses are started because the founder either has a high level of expertise, a track record of experience, competency to provide what is being offered or an idea. The problem is that these alone are not enough to be successful in growing a business—they are just the launching point.
Having a high business intelligence quotient (IQ) is much more than having an idea, competency, expertise or experience in your industry or field. It is about having the wherewithal to grow the business, sustain its growth and continue to effectively scale and compete. More than 30 years of validating entrepreneurial growth success have confirmed the essential business IQ factors for a business to realize greater success.
Working on the assumption that the founder has industry expertise, experience and competency at the launch of the business, let's look at areas that are imperative to achieving a high business IQ in more depth. These include understanding business complexities, positioning for differentiation and the ability to be strategic.
Understanding Business Complexities
Among the biggest downfalls of most small businesses failing to grow is their leadership's inability to analyze and effectively navigate business complexities. These complexities include regulatory/compliance, the impact of trends, data analytics and competitive insights.
For some businesses, government regulations and industry compliance or ethics standards create an entire facet of business management that is complex and ambiguous. Add in the continuous nature of tax reform, and a business may be blindsided if it doesn't fully understand its implications and repercussions.
Regulations can also be an opportunity, not a hindrance, when viewed through the right lens. For instance, in the construction industry, regulations around silica dust are impacting everything from jobsite protocol to new product accessories for drills and saws. Many businesses don't realize that OSHA also has regulatory guidelines specific to workplace violence due to the trend of active shootings.
This isn't about being a 'trendsetter' as much as it is about being a 'trend getter.' Organizations with high business IQ pay attention to trends that are occurring on all fronts for strategic insight and potential leveraging for differentiation and market share gain. I am not just talking about trends within your own industry. Companies possessing high business IQ are able to look at trends happening in other industries and see opportunities to adapt and apply to their businesses before competitors even have a clue.
Another key factor in trend-getting is being able to understand how consumer trends can impact a B2B company or how business trends can be an opportunity for a B2C business. Trends empower thinking outside the box.
Being able to mine your own data for powerful insights can be a game changer for your business. What information could you be capturing for strategic merit and insight? How could data inspire innovation or ingenuity within your company? Do you know truly what is profitable? Too many companies are not leveraging their own data about customers, suppliers or employees, which could offer immense opportunities.
For example, a client of ours that leaned into their data analytics became a market leader in the outdoor living space by correlating profitability with market segments and geographic opportunities.
Being able to clearly distinguish between direct and indirect competitors is an aspect many business leaders fail to fully understand. Companies that understand the difference possess a strategic advantage. A direct competitor is a company that has all the same offerings and focuses on the same market segments.
An indirect competitor is a company that may have similar offerings but is targeting a different market segment, or is targeting the same market segments but does not offer the full scope of offerings as your company. Companies that have a high business IQ in this area are better able to identify opportunities for strategic alliances or strategic acquisitions.
Positioning For Differentiation
How is your business unlike any other competitor? Is it a differentiation that is changing the way business is being done in your industry or marketplace? Are you creating a level of preference or loyalty from customers and employees that is downright enviable? If you can't answer yes to any of these questions, then you have some work to do. Sustainable growth dictates that your company is bringing something to the marketplace that is valued and valuable on an ongoing basis.
Taking your differentiation to a value-building level is where intellectual property and proprietary holdings come into play. It's one thing to proclaim you are different and another to document it. When you take it to the level of protecting these differentiating advantages, you are strategically building a foundation of tangible and intangible assets that will serve as a portfolio of value when it's time to sell your business.
Trademarks, copyrights, trade secrets and patents should be documented and secured. Licensing, certifications or franchising, dependent on your business model and offerings, may be strategically astute means of expanding reach, access and opportunities for diverse streams of income.
Ability To Be Strategic
Your ability to embrace all of these high business IQ indicators will enable you to be more strategic in the short term and visionary in the long term for your business. With a high business IQ, you can lay a strategic foundation for thriving and realizing year-over-year growth. Your strategy should include a short-term action plan (one to three years with quarterly monitoring and benchmarking) and long-term (10 years and beyond) visioning. Most importantly, your strategy should clearly delineate expectations, accountability, performance measures and contingencies across all aspects of the business.
According to the U.S. Bureau of Labor Statistics, 20% of businesses fail within the first year, and another 49% fail within five years. Only about 35% of businesses have made it past 10 years. These success rates put an exclamation point on the importance of a high business IQ. Those are the ones that have staying power.
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