Many Chief Executives find organisational wealth in the financial controller’s balance sheet. There are numbers against all these tangible assets, including buildings, machinery, cash in the bank, IP and even the pipeline of orders for the next financial year.
You have probably heard the famous mantra, “Turnover is vanity, profit is sanity, but cash is king”. For healthy business operations, this is great, and any CEO who disregards these essential elements could quite legitimately be called a fool, and to suggest otherwise would be remiss of me.
However, the true wealth of the organisation does not only sit with the physical assets because these depreciate over time and often can only be realised with divestment. Social capital, on the other hand, is generative and grows more valuable with time and experience. Without realising the value of social capital, taking full advantage of tangible assets is limited.
In almost all the business memoirs I have read of the great leader’s past and present, social capital, is named their greatest wealth. In addition, nearly all did not realise this at the outset of their careers. Instead, through experiential learning, they came to realise this most important lesson of all.
When Bill George, former Chairman and CEO of Medtronic, writes about authentic leadership, he almost only refers to the value in relationships in his organisation. For him, the best way to release that wealth is to be an authentic leader. The two go hand in hand.
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