In my book Five Eyes on the Fence, I propose a way to look at what businesses, families
The financial consequences of a business owner’s decisions are driven by:
- Human capital—Who are the owners? What are their intelligences, instincts, and values? This is important because every decision is knowingly or unknowingly a manifestation of the value set of the business, family, or individual.
- Social capital—Who do the owners know and work with? When they are intentionally nurtured, these relationships can be leveraged for opportunity.
- Intellectual capital—What do the owners and other members of the company know? Are their gaps in knowledge that could be closed to strengthen the product or service?
- Structural capital—What processes do these people use to accomplish things?
In short, all the decisions surrounding these four capitals will either subtract from or enhance financial capital.
This blog also appears in Our Two Cents on rsjcpa.com