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 

When “Doing the Right Thing” Becomes Inconvenient

What do you do when your core values go against the grain of ethics?

Here’s an example: Imagine that your mother calls. You chat for a while, and then your mother asks to speak to your spouse. You know that these conversations never go well. They end with your spouse venting in frustration about your mother’s antics. 

“Tell her I’m not here,” your spouse whispers.

You value your spouse. You certainly value peace and harmony.

But the ethics of it require you to lie. You are challenged to either violate your own values or violate the code of ethics.

Azamat Tazhayakov, Dias Kadyrbayev and Robel Phillipos found themselves in a values-versus-ethics situation when they removed and disposed of a backpack from Dzhokhar Tsarnaev’s dorm room.

Dzhokhar Tsarnaev was the suspected Boston Marathon bombing suspect who was killed during the search for the perpetrators. His roommates were later sent to jail for destroying evidence in Tsarnaev’s backpack.

They certainly mistook the value of friendship as more important than the ethics of honesty and reality. At the time, though, they probably thought they were doing the right thing.

Their situation is obviously more severe than the hypothetical mother-versus-spouse situation I asked you to consider.

But does the severity of an ethical violation matter? Is it okay to abandon ethics when we are talking about little things, so long as you stay ethical when it truly counts?

I argue that the little things define you. If you are willing to abandon your ethics when the consequences are minor, imagine what you will do when the consequences are major!

This is a common theme in my work as a CPA. Accountants value their clients. They want to serve them well. And every day, accountants are given an opportunity to cheat a little here and a little there. 

But cheating a little bit is a slippery slope. It makes cheating easier and easier, until one day, cheating becomes the norm. What do these folks do when they are presented with a major ethical decision, one that could either result in a major boom or a major consequence?

Why they cheat, of course!

Your ethics are a code by which you decide to live. They define what type of person you are. If you decide that you are going to be honest, except when it is inconvenient to do so, you have decided that you are comfortable being a dishonest person.

A true test of your commitment to living an ethical life is when you behave ethically when it is inconvenient to do so.

What do you think? Is it this black-and-white, or is there some gray area here?

On Grieving During the Holidays - The First Thanksgiving Without My Son

My 28-year-old son died in July.

Writing these words stops me. I sit in my seat, staring at them.

How can they be true?

It is hard to move past these words today, in particular. It is one day before Thanksgiving, and I am wondering how I will make it through tomorrow—the first big holiday without my son.

Jonny would have turned 29 in August. My wife, my daughter, and I survived his birthday with tears and memories and laughter, and then with more tears. Yet, there were fewer expectations on his birthday, fewer customs, and fewer traditions to uphold.

Whereas his birthdays have morphed throughout the years, and we have spent many without him, Thanksgiving is supposed to be a certain way. There is supposed to be turkey and wine and football. We are supposed to be loud and boisterous. We are supposed to be surrounded by family.

We are supposed to be thankful—thankful for the blessing of our children.

And Jonny is supposed to be there.

My wife, my daughter, and I will have Thanksgiving at my house, along with a handful of friends and family.

I wonder: Who will sit in Jonny’s chair? Will anyone sit in his chair, or will it sit empty—a loud vacancy reminding us that things are not as they are supposed to be?

We are certainly not the first family to face the fear of that first Thanksgiving. So many others have survived the holidays after a divorce, the first Thanksgiving after the collapse of a business, or the first Thanksgiving after the death of a spouse.

Today, it feels impossible to simultaneously grieve and celebrate—and yet, that is what so many of us are being called to do tomorrow.

A couple of weeks ago, I had lunch with a friend. We spoke of Jonny, and I told her that I was worried about the holidays.

Felice said something that has stayed with me.

“Remember that Jonny doesn’t die again on Thanksgiving,” she said.

Jonny died on July 27, 2015. On that day, we began to grieve. We began processing the fact that we would never again hug him or laugh with him or share a joke with him. He died on a hot day in July.

It happened once. It will never happen again.

It already happened, and it will not happen tomorrow.

I remind myself of this over and over because I want to give myself permission to move forward. And I want this for all of Jonny’s friends and family members: my wife, my daughter, Jonny’s girlfriend, and his many, many friends.

I do not want us to feel compelled to relive all of our grief, afraid to create new moments because we are so tragically lost in the past. I want us to make new memories, discarding this notion of what is supposed to be, and mindful that although we are grieving, we are also recovering.

Jonny does not die again tomorrow, and we are recovering.

Kolbe Wisdom™ Changes the Game for Rose, Snyder & Jacobs

At Rose, Snyder & Jacobs, we use the Kolbe System to build our team and create our company culture.   This month’s Kolbe Connection highlights our success story – and features yours truly.

When Tony Rose learned about his M.O. it really helped him understand himself. “It permitted me to be me,” he said. At the time, his executive team was struggling to work together. The company was managing alright, growing and making money, but it just wasn’t easy.  Like many other companies, they promoted people to managerial roles without understanding that just because people are great at their job doesn’t mean they would be great managing people who do that job.

Read more >>

Be sure to visit Kolbe.com and follow @Kolbe_Corp on Twitter to learn more about how the Kolbe System may benefit your company.

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Five Eyes on the Fence
What's YOUR Pixie Dust?
Deep Thoughts on Thoughtful Disagreement