Similarly, when a business leader assumes a new position, he or she has a “leadership account” of qualities such as credibility and respect - character traits that inspire others to trust and follow. Savvy leaders with long tenures know how to build their accounts and how to leverage leadership qualities for the good of the organizations they lead.
Business entities with plenty of capital - wealth useful for producing more wealth - are more likely to achieve their goals even in difficult circumstances. Similarly, a medical practice administrator or managing physician with adequate “leadership capital” has a better chance of effectively guiding his or her organization through troublesome times to succeed in its vision and mission. Sounds great - but what is leadership capital, and how can you build your account?
The concept behind the current buzzword “leadership capital” has been around for a very long time. Classical students of rhetoric since Aristotle have discussed the idea of “ethos,” the character traits of an orator or a leader that give him or her credibility in an audience’s eyes. It consists of three categories:
- Practical skills and wisdom;
- Virtue and goodness; and
- Goodwill toward the audience.
You bring a certain amount of capital to the job at the very beginning - your balance sheet consists of your résumé and references. But that won’t carry you very far. You must therefore begin immediately to build your leadership capital account. And here are five good ways to build your balance:
- Always be honest. A cynical belief that “everyone lies, it’s only a matter of degree” casts a shadow over the entire business world today. People in your organization will find your consistent truthfulness a breath of fresh air. You don’t have to tell them everything you know— it’s still truthful to say, “I can’t answer that question just yet.”
- Follow through. Thorough honesty goes beyond telling the truth—it includes doing what you said you were going to do. And when circumstances prevent you from keeping your word, deliver a timely apology. (And remember, an “apology” includes an explanation.)
- Establish attainable goals. Leaders without goals give the impression that they don’t know where they’re going. From the very beginning, set meaningful goals that raise the bar high enough to challenge, but not too high to discourage.
- Always own up. Another component of honesty, admitting your mistakes will make a greater impression on employees and colleagues than trying to appear perfect.
- Invest in your people. Demonstrate how you value the people you’re leading by making sure you compensate them fairly, encourage them with appropriate praise, and spend money on training and resources to ensure their success.