The Tool That Will Help You Boost Your Trust, Credibility and Influence This indispensable resource can transform team dynamics, reshape leadership styles and boost organizational success, but what are the key methods of nurturing it?
By Christopher Myers Edited by Matt Scanlon
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Too often undervalued and underestimated, leadership capital — defined by the Oxford Dictionary as "the currency a leader has to influence [a] group" — plays a critical role in organizational dynamics. Unlike financial capital, which can be counted in dollars and cents, it is tricky to measure precisely: intangible, elusive yet incredibly powerful — a dynamic force that evolves inside the leaders who possess it.
At its core, leadership capital represents a leader's accumulated reserve of trust, influence and credibility. It's a reflection of the ability to inspire, motivate and steer teams towards shared goals. Think of it as a bank account, in which every decision and action either deposits or withdraws from this reserve.
So, how can leaders increase their leadership capital, and which actions deplete it? The book Extreme Ownership: How U.S. Navy SEALs Lead and Win, by Jocko Willink and Leif Babin (St. Martin's Press, 2015) offers some valuable insights.
Deposits: How to boost your leadership capital
Take full responsibility: When things go awry, good leaders step up and own their mistakes. They don't play games or dodge accountability. Instead, they confess failures, which both demonstrates honesty and earns team trust.
Maintain passion: True leaders harbor a deep and unwavering belief in their mission. And this is not just surface-level enthusiasm, but a profound conviction that radiates from their core. Those who embody authentic passion and dedication ignite the same within teams.
Tame that ego: It's difficult to overestimate the value of humility. An unchecked ego can cloud judgment, spark conflicts and hinder progress. Keeping it in check fosters an environment of mutual respect and understanding.
Embrace teamwork: Success hinges on the collective efforts of a team. Strong leaders champion a culture of collaboration, inspiring members to support each other in pursuit of common goals.
Reduce complexity: Excess intricacy often acts as a stumbling block to execution. Those who excel at simplifying plans and effectively communicating them enhance a staff's understanding and effectiveness.
Prioritize and execute: Adeptness in prioritizing tasks and overseeing their completion will result in significant boosts in leadership capital. Focusing on the most crucial tasks ensures the judicious allocation of resources and consistent progress toward objectives.
Decentralize command: Leaders who empower their teams to make decisions and shoulder specific tasks foster a sense of ownership and trust.
Related: 6 Ways to Better Support Women in the Workplace
Withdrawals: Actions that erode leadership capital
Not recognizing errors: Leaders who dismiss mistakes without addressing them or learning from them risk damaging their credibility. Being proactive means acknowledging and learning from errors and implementing measures to prevent recurrence.
Lack of transparency: Operating in an opaque manner by withholding information or failing to be upfront about decisions and actions breeds distrust and ineffectiveness.
Inconsistent decision-making: Dependability and predictability are cornerstones of effective leadership. Those who lack them, whether in the decision-making process or their resulting decisions, risk confusing team members and undermining confidence.
Ignoring team contributions: Failing to recognize or reward the efforts and achievements of team members will quickly deplete their respect. Recognition plays a crucial role in boosting morale and motivation.
Neglecting personal development: Leadership is an ongoing journey of learning and growth: Those who become complacent and fail to evolve (whether through avoiding additional training and/or neglecting their overall well-being) will experience diminishing effectiveness and influence over time…guaranteed.
Poor communication: Those who are unclear or unresponsive in information-sharing sow confusion, misunderstandings and an overall sense among staff members of being undervalued.
Related: Stop Lying to Your Team — And Yourself. Try Radical Honesty Instead.
Leadership capital isn't handed out freely; it's earned through consistent actions that embrace and model credibility, integrity and genuine concern for both the team and its mission. In the end, it's the measure of a leader who others willingly follow, not out of obligation but because they are inspired. For entrepreneurs, CEOs or others in leadership roles, it can produce a seismic shift — transforming team dynamics and ultimately boosting the success of an organization.
In the words of Willink and Babin, "Leadership is the single greatest factor in any team's performance. Whether a team succeeds or fails depends entirely on [it]."
Is it time to raise your capital?
