The Five Capitals - A Cheat Sheet

In my book Five Eyes on the Fence, I propose a way to look at what businesses, families

and people really possess in terms of “capital.” The success or failure of a business lays in understanding the potential and actual consequences of more than financial capital. In fact, there are four other capitals that might be even more consequential than money. The interrelationship of these four capitals—sometimes coupled with financial capital—is what actually produces expansion or contraction of financial capital.

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 

Micro Promises

Most of us keep our big promises, but all too often, we make tons of tiny little “micro-promises” that we either never keep, or that we fulfill, but only with tremendous tardiness.

We say: “I will call you back in five minutes.” Then we call back the next day. We say: “Let’s have lunch soon,” but we never do. We say, “I’m happy to answer any questions that you have,” when we really don’t want to take the time to answer too many questions.

All of these tiny little promises are hard to keep track of. We make so many of them that we cannot possibly honor all of them. And we don’t take them seriously, do we?

We also break promises to ourselves. We say things like:

“I’m going to start going to bed earlier.”

“I’m going to wake up and go to the gym.”

“I’m going to call my mother.”

How many leaders, bosses, and educators make micro-promises that never come true? The answer is: too many! In fact, we take most people’s micro-promises with a grain of salt. When our long-lost friend that we run into at the store promises to call us the following week, we don’t really expect it to happen.

But all of these micro-promises, made to ourselves and to others, chip away at our social and human capital. What do other people think of us when we fail to keep our commitments? Remember that when you interact with other people, you are either building or destroying social capital. When these micro-promises are kept, the mortar that binds your relationships solidifies.

And when you keep the micro-promises that you make to yourself, you validate your own worthiness.

My friend and personal coach Michelle DeAngelis had a conversation about micro-promises, and here are my takeaways:

1. Be mindful about seemingly idle micro-promises. No promise is idle or casual. Someone might be holding you to it, so make the promise only if you can do it. Kathy Kolbe, my friend and creator of the Kolbe System, advises that people should commit, but to very few things. If you are overrun with promises, you cannot fulfill them all. So when you make a promise, big or little, be sure it is one that you can fulfill.

2. Once you commit, set up a mechanism so that you can schedule time to meet that commitment. Put it in your calendar or write it down, right then and there.

3. Finally, make sure that you do not create a culture whereby micro-promises are broken by other people (which may normalize it and/or erode your own emotional wellbeing). When someone makes a micro-promise to you, find out whether they are truly committing. Say something like: “I would love for that to really happen. What should we each do to make it so?”  

This blog also appears on Our Two Cents on rsjcpa.com 

Does Praising “At Level” Employees Lead to Mediocrity?

Most of us are doing employee reviews all wrong. You’ve got an employee who does his job well, so you tell him that he is exceeding your expectations.

But aren’t employees supposed to do their jobs well? Should they really be receiving accolades for doing what they are paid to do?

I think not. June is employee review month at Rose, Snyder & Jacobs. It is a month of reflection, recounting, and projection. One of the tasks of all managers is to evaluate the performance of each of their team members. We have a descriptive grading scale. The top end of the scale is “Outstanding” and then “Very Good.” The middle descriptor is “At Level.” At level is for people who are meeting the expectations for that position in all respects. Here is where some of our managers have a hard time: They want to reward their good employees with some sort of reward. “At Level” doesn’t seem like enough. Those of us who were in the helicopter-parenting era are used to rewarding any positive behavior and results with vocal reward. Even "mediocre" got some sort of ribbon or trophy. As employers, though, we never hire people in hopes that they are mediocre. We pay them to do their jobs well. This is what it is expected. “At level” means that you are far, far better than mediocre. Do you give your employees who are merely doing a good job—what is expected of them—a better review than you should? If so, here is a tip: Sleep on your evaluations and reflect. Does this person exceed the expectations you had when you hired him or her? If so, that upper scale is appropriate. But if they are merely doing the job you paid them to do, then they are At Level. And by the way, being At Level is a good thing! It means you are satisfied. It means that you have no problems with their performance, and that they will probably keep their jobs for their foreseeable future. But let’s be clear with your employees. You can’t earn an “At Level” standing unless you are doing a good job. Your mediocre employees are not performing “At Level.” They are doing worse than your expectations when you hired them. When you develop a common and mutual understanding with your team, you can begin having useful discussions about how your employees can be more productive. But if you reward what should be expected, mediocrity can become the status quo.

Leveling Up Your Business With Tony Rose

I am grateful to have been invited back on Smashing the Plateau with David Shriner-Cahn. 

Whether you’re an entrepreneur just starting out or have an existing business, this podcast is a great resource.

In my recent appearance on April 21, 2016, David and I discuss business coaching, which is something I find extremely valuable. Coincidentally, it was one of my coaching communities that connected me with David in the first place.

As always, thank you for listening and please share your feedback.

LISTEN NOW

Please, Oh Please: Let the Air Escape!

I have always been a loud talker. The employees who sit in cubicles outside my office can attest to this. Why, just this morning alone, they heard more than a few expletives that escaped from the walls of my office.

Many of them probably know personal details I have confessed only to a few close friends—albeit it very loudly.

In my defense, though, they also have likely benefited from a good number of jokes that I tell behind closed doors only.

 If given the choice between a loud talker and a quiet talker, though, I will take the booming loud and invasive voice every single time.

Part of this preference is based on the fact that I need hearing aids (thanks to the music I blasted in the sixties), and that I refuse to wear hearing aids because the ambient noise is so disruptive.

Yet, a larger part of this preference is based on the subtext of what I believe it means to be a loud talker versus what it means to speak very quietly.

Is what you are saying important enough to make sure that people hear you? If it is, then for the sake of all of hearing-impaired mankind, speak up! If you say it in a soft, docile voice, then I assume you are simply adding ambient noise and cluttering my peace and quiet with drivel.

I was in a meeting with several colleagues recently, and I spent the entirety of the sixty-minute meeting confused about what one of my colleagues was saying. I simply could not hear him, so I kept asking for clarification. This man happens to be brilliant. He has quite a lot to say, and at each interaction, I become a better-informed employer. But if I did not know him, I would assume that he was lacking confidence about his opinions. Otherwise, why wouldn’t he want to be heard?

As I was trying to listen to him, I began wondering about the ancient Greeks. What the hell did they do before electricity? Before microphones and speakers? They had a lot of theatre back then. Could only the first two rows of audience members hear them?

Was some seventy-year-old sitting in the back row turning to his neighbors and asking, “What? What did he just say?”

No. They used the power of their thoracic diaphragms so that even the hearing-impaired folks like me could hear them.

So I beg of you: Let the damn air escape from your mouth, and say it! 

I have always been a loud talker. The employees who sit in cubicles outside my office can attest to this. Why, just this morning alone, they heard more than a few expletives that escaped from the walls of my office.

Many of them probably know personal details I have confessed only to a few close friends—albeit it very loudly.  In my defense, though, they also have likely benefited from a good number of jokes that I tell behind closed doors only.

If given the choice between a loud talker and a quiet talker, though, I will take the booming loud and

invasive voice every single time.

Part of this preference is based on the fact that I need hearing aids (thanks to the music I blasted in the sixties), and that I refuse to wear hearing aids because the ambient noise is so disruptive.

Yet, a larger part of this preference is based on the subtext of what I believe it means to be a loud talker versus what it means to speak very quietly.

Is what you are saying important enough to make sure that people hear you? If it is, then for the sake of all of hearing-impaired mankind, speak up! If you say it in a soft, docile voice, then I assume you are simply adding ambient noise and cluttering my peace and quiet with drivel.

I was in a meeting with several colleagues recently, and I spent the entirety of the sixty-minute meeting confused about what one of my colleagues was saying. I simply could not hear him, so I kept asking for clarification. This man happens to be brilliant. He has quite a lot to say, and at each interaction, I become a better-informed employer. But if I did not know him, I would assume that he was lacking confidence about his opinions. Otherwise, why wouldn’t he want to be heard?

As I was trying to listen to him, I began wondering about the ancient Greeks. What the hell did they do before electricity? Before microphones and speakers? They had a lot of theatre back then. Could only the first two rows of audience members hear them?

Was some seventy-year-old sitting in the back row turning to his neighbors and asking, “What? What did he just say?”

No. They used the power of their thoracic diaphragms so that even the hearing-impaired folks like me could hear them.

So I beg of you: Let the damn air escape from your mouth, and say it!

The Importance of Nurturing Your Relationship with So-Called “Strangers”

I write in my second book, Five Eyes on the Fence, about the importance of protecting your

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social capital. My thesis is that financial capital is a byproduct of four other types of capitals. When human, social, intellectual, and structural capital are well-tended, financial capital flourishes.

Social capital can be summarized in two words: Relationships matter.

The strength of your relationship with clients, potential clients, vendors, employees, and colleagues determines the extent to which these relationships can be accessed as a resource. The stronger the social capital, the more likely your financial capital will benefit.

And the stronger your relationship with strangers, the better your social capital.

I know what you are thinking, “Wait a minute: How can a person have a relationship with a stranger? Isn’t not knowing the person the very definition of a stranger?”

And therein lies the problem. You don’t know what you don’t know. You don’t know whether someone else knows something about you. You don’t know if a so-called “stranger” has an eye on you.

When you walk through life, consider that you are often being observed. If you are being ungrateful, pessimistic, or otherwise unpleasant, “strangers” are noticing. When you post hostile messages on someone’s social media site, “strangers” are reading these messages. When you are rude to the barista, “strangers” are less inclined to engage your conversations.

Those strangers might be people who would have otherwise turned into important components of your social capital network.

This February, I spoke to the students at the University of Southern California’s Leventhal School of Accounting about my book, and how they can use the four other capitals to help their clients strengthen their financial capital.

During our discussion about nurturing relationships with social capital, a student brought this to my attention: The following Friday, a prestigious speaker was visiting their school.

I gave this advice: “Dress like you are going to a job interview.”

One of the students objected: “There are going to be thousands of people at the event. Why would he notice me?”

My response was this: “There are going to be thousands of people at the event. Someone will notice you, and that person might just be your next boss.”

This holds true in life. Of the billions of people out there, you never know who is noticing you. You never know who will be your next boss, your next client, your next employee, or your next vendor. So many relationships are born out of happenstance. Why not give these relationships the best chance at blossoming by going out into the world as the best version of yourself?

The title of this blog is, “What We Should Be Doing.” Let’s choose to do it right, all of the time.

Because you never know …

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