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 

Open Letter to John Stankey of AT&T Entertainment Group

Dear John Stankey:

We have never met, so you don’t know a thing about me. You don’t know that as I write this, it is almost the one-year anniversary of my son’s death. Jonny died a month shy of his twenty-ninth birthday.

You don’t know that his mother, his sister, and I recently decided to convert his bedroom—the room in which he died—into a commemorative room where we could watch hockey, his favorite sport, as a family.

You cannot possibly know that Jonny’s hockey sticks and his diploma from Southwestern Law School hang on the wall, alongside his certificate admitting him to the California State Bar Association.

And you cannot know that my daughter, Katie, planned a surprise for me. While Chris and I were out of town, Katie decided to do all the heavy lifting. She bought a satellite dish and a 50” TV, which she lugged into my son’s room, so that come August, we can watch the Olympics as a family in Jonny’s room. Come winter, it will be a perfectly cozy place to watch the hockey season.

There is no reason that you would know that on Monday morning, I sat in that room and had a really great cry.

But here is what you do know: You know that your company’s internal structures have been carefully crafted to keep all of your employees from bearing responsibility for solving a customer’s problem. I know that you know this because my daughter, my assistant, and I have spent about twenty hours of our lives talking to your employees.

We spoke with Adam from Pennsylvania, Lee and Cameron from Mississippi, Keith from Oregon, and Peter from the Philippines. And as my case was handed from one person to the next, I asked quite a few questions about the structures you have in place for your so-called customer service.

You see, what you also do not know about me is that I, too, am the CEO of a company. In fact, I have been a CEO and named partner for forty years. My firm is not as big as yours. Not many people know the name Rose, Snyder & Jacobs, but our clients would tell you that our firm is damn committed to customer service.

I don’t think the same can be said about your company. Sure, AT&T looks like a corporate success story. You just bought DirecTV, and that seems to indicate that things are heading in the right direction.

But your internal structures are a mess, and your social capital is racing downhill—and fast. Watch out, Mr. Stankey: You have a train wreck headed your way.

You have already fielded similar complaints from thousands and thousands of other unhappy customers, so I won’t bore you with too many of the details of what happened. The short story is this: Twice, your representatives were supposed to arrive at my house for a DirecTV service call for the new television that sits in Jonny’s room. Twice, they didn’t show up during the four-hour window of time that we waited. In fact, both times, we waited the entire day!

And then, for a total of twenty hours, I tried to reach a resolution with your office.

Your employees were extremely pleasant and apologetic. They genuinely felt bad. They wanted to help. But they had no recourse other than to stick me in the back of the queue. Even though the AT&T/DirecTV technicians did not arrive during the two eight-hour windows they were supposed to arrive, my request for service was stuck at the end of the line. I was being told to start from square one and wait it out.

This happens all of the time with AT&T/DirecTV.

But this is where my story is a little different from the rest.

I am the author of a book about social, human, intellectual, and structural capital, so I knew what questions to ask about the structures that a company needs to adequately manage customer service complaints. In short, I wanted to know the answer to this: What does AT&T/DirecTV do when it screws up?

Here is what I learned: The employee on the end of the line who has the most power can credit an account for $50.

Let me repeat this: The most empowered customer-service representative can give a customer a $50 credit. He cannot prioritize a case. He cannot ask a technician to make an immediate service call. He does not have the ability to get a response from dispatch about why the screw-up. He does not even have any way of getting in touch with home office to ask for an exception. They do have an address in Dallas where I, your valued customer, can mail a complaint. (What are the chances it will be answered?)

The most-empowered employee on the end of the line has no ability to take any meaningful action.

Sure, the employees can keep transferring customer service calls from one person to another, so it appears as though customer service is a priority. But your process is not built to help your customers, and you and I both know it.

Mr. Stankey, I am not a corporate giant. My firm is modest, but here is where it outshines AT&T any day of the week: We know the importance of honoring clients.

You see, I remember what happened to AT&T back in 1982. Back then, people had to wait two or three weeks before they could establish phone service in a new residence. It was frustrating, but they had no choice. AT&T had acquired Bell Operating Companies, so customers had no other option but to stand in line. They had no recourse. AT&T could take its customers money, but it could not provide an adequate customer service structure.

Then the government stepped in and forced AT&T to relinquish control of Bell. They wanted customers to have a choice. When customers have a choice, they tend to take their business to the companies who will help them.

I have such a company—a company that helps people. As a result, I am rich in social capital. My clients, my friends, and my colleagues want to help me. So in the end, I spent some of my social capital to get your company’s attention. I called a friend, who called a friend, who called a friend who is a higher-up at DirecTV. This friend-of-a-friend-of-a-friend assured me that someone will be at my home tomorrow to install my service.

Here is the truth: Even if I didn’t have connections, I wouldn’t have walked away from DirecTV. I would have waited it out because my daughter wants to watch the Olympics in her brother’s room.

But a lot of your other customers are walking away. They might not have connections like I have, but they do have choices, like Netflix and Hulu. And you can only lose so many pebbles before you have no beach left.

Rest up now, Mr. Stankey. Unless you make some changes, and fast, you have a rough road ahead of you.

Sincerely,

Tony A. Rose, CPA

Rose, Snyder & Jacobs

P.S. I have strong social capital, and I am certain that there are other people in my circle who are fed up with your so-called customer service, so I’m sharing my story on twitter as #DirecTVService so that other people can join the conversation.

Katie's Perspective

In the past months, so many of you have shared in my family’s sadness of losing our beloved Jon. While a huge tragedy for us, it has also been an incredible learning and growing experience. We have seen how the concepts of human and social capital come into play in good times and especially in bad. In a strange way, we have become rich even in our loss.

Many of you know my daughter, Katie. This is from a piece she composed for one of her friends. I thought I would share it with you.

By Katie Rose

I have always been trapped in my head—trapped by fears and social anxiety. I felt so trapped that
there came a point in which I boxed myself in and withdrew. Being around other people became so torturous for me that I began hiding in my room.

It wasn’t that I failed to recognize that I had these issues. I was well aware, which made them even more frustrating. My mind was telling me one thing, but it always lost to fear and anxiety.

Then I suddenly and unexpectedly lost my brother. Jonny’s death made me question everything I ever knew, and though I would give just about anything to rewind to July 26, 2015, so I could save his life, I have experienced more personal growth within the last year than I have ever had.

After Jonny died, I began asking myself questions like: If I died tomorrow would I be satisfied with my life? Did I want to live in my pain and misery? Am I living the life I want to live? Do I know what it means to be truly happy?

The answer to every single one of these questions was no. In a terrible yet beautiful way, my brother’s death lit a fire under my belly. His death has given me a whole new perspective on life and the way I live. The lessons I have learned in the past year could fill an entire book. Here are few of my favorites:  

1. When one story ends, another begins—and that story always has a silver lining. The silver lining in the new story of my life is that I have learned to never take any days for granted. I took my brother’s death as a point of reflection: Did I want to live in pain everyday, or did I want to love life, and have it love me back?
2. I do not hide from my emotions anymore. If I am scared, I acknowledge that I am fearful and move on. If I am sad, I let myself cry and keep going. I now invite myself to feel every emotion I can (fear, happiness, anger, sadness). These are the emotions that force the most personal growth. They give us insight into where our minds are. They tell us that something is missing in our lives, and they call for us to find a way to resolve these needs.
3. Being vulnerable with one another is the most beautiful thing we can experience as humans. In a society with so much competition, vulnerability equalizes us. Vulnerability allows us to show our imperfections without shame. 

When tragedy happens, you can either let it overcome you, or you can sit with the pain that you feel long enough to harness it and turn it into power. I’ve chosen to harness my pain.