Wednesday, May 12, 2010


In any business, the very fact that clients are being charged makes them naturally wonder if the company is simply feathering its own nest. This is especially true in areas where customers are unfamiliar with the terrain. A good example might be auto mechanics. I’m pretty confident I’m not the only one who has taken his car into the shop for an oil change only to be told dragons have destroyed his carburetor and the cost to realign the flux capacitor is $10,000. I’m sure there is an honest mechanic out there—maybe even most—but nobody can deny there are more than a fair share of mechanics in the world who aren’t on the up and up.

Assuming you are an honest mechanic—in whatever your actual chosen field—how do you assure your clients they are being treated fairly and see to it that they provide repeat business?

For starters, you rely on your intellectual capital. Intellectual capital is comprised of three very important elements, the first being human capital—a company’s employees and what they know. This is a commonly discussed topic. But there are two more pieces that are just as important and rarely examined: structural capital and social capital. Each of these deserves its own article: the focus of this article is on structural capital (hopefully you knew that from the title).

If a company is selling its strengths—what its employees know and are best at—the strengths cannot be delivered upon without the processes that have been put into place to help that knowledge be displayed and utilized. The processes are a company’s structural capital. Structural capital includes the office, the equipment, the systems used to make a company run like a well-oiled machine. They are all the physical components that go into gettin’ ‘er dun, as Larry the Cable Guy would say. If a company is going to rise above its competitors, it needs its own structural capital. Your structural capital is a direct reflection of your company and the first means by which customers will be able to form an opinion of you.

Let’s go back to the auto shop for a moment. My Lamborghini Reventon needed an oil change (it’s my article and I can dream if I want to). The first shop I took it to was a mess, even on a most basic level. When customers walked into the front office, papers were strewn everywhere. The mechanics looked sloppy (even more than what it is to be expected), the auto shop seemed more like a junkyard, and I was told they only accepted a certain kind of credit card. The first employee who started to help me was called to some other more important duty; I was handed off to another serviceman and had to explain my situation all over again. Maybe these guys were all a bunch of auto repair geniuses, but their business’s weak structural capital also weakened something in me: my confidence in them. When customer confidence is weakened, and you don’t work tirelessly to get it back, you might as well call it a day.

Not feeling comfortable leaving my precious car at this place, I took it to another shop on the recommendation of a friend. The office was clean and organized. A number of signs pointed out that the place had been accredited by AAA, letting me know that AAA would step in and investigate any concerns I might have. One point person handled my account: I didn’t have to retell my situation over and over. The work was completed on time and on budget. This auto shop’s presentation, professional workmanship, and system of communication guaranteed that next time my Lamborghini needed work, I would bring it back. (I actually drive a Ford Focus, but you get the point.)

A good way to tell if your structural capital is at the level it should be is by taking a close look at the structural capital in your personal life. In my bachelor days, I learned this the hard way. Whether you are going to be successful on a date relies heavily on your structural capital. Before I became the married stud muffin that I am today, I went on more than a few clumsy romantic outings. I didn’t clean my car (the discarded McDonald’s bags in the back were pretty revealing). I took a girl to an Italian restaurant and she was allergic to pasta (a little preliminary investigation would have uncovered this). I learned that dressing in flip-flops and a hoody is not the way to a girl’s heart. And that it is important to open doors for the ladies.

The onus isn’t always on the guy. (Hopefully this is the last time I use the word onus.) I have a friend who tells me of a young lady who invited him up for coffee. When he went into her apartment, there was nowhere to sit—not because there weren’t any chairs, but because the place was so cluttered, he literally had to push objects aside to find a place he could sort of sit. The place sounded like the trash compactor in Star Wars. Weak structural capital caused him to flee before he got buried under the debris field.

Maybe you are married now, and you do not have to worry about the dating world, thank heavens. You still have to worry about structural capital. In fact, you need to pay even more attention to structural capital. If you don’t have a successful system of communication in your relationship—if you are lacking basic necessities in the house and aren’t putting your underwear in the hamper—you will face growing problems. If anything, personal structural capital is even more essential in a marriage because you see your wife or husband more often than someone you are simply dating (hopefully).

Take a sheet of paper and think about your business or personal life. What physical elements and processes do you have and use to assist you in creating the impact your business has on its customers or you have in your personal life.

List them. What could be better?

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