Wednesday, 23 July 2008

Leadership pulse findings on Relational Capital


Relational capital


Theresa Welbourne at eepulse (see also Energize Engage) reports finding that relational capital (here defined as relationships with all stakeholders not just employees) is more important than human capital for building long-term competitive advantage in an organisation.

Small firms appear to have already got this message - placing more value on relational capital than human capital in contrast to larger firms.  And within both firm sizes, eepulse found it was relational capital that differentiated high from low performers.

The graphic presents the overall level of relationships that firms support with different stakeholders (from 5 = devotes significant time / resources through to -5 = ignores these people).

Welbourne notes that

"You contract with humans: you constantly negotiate and renegotiate relationships.  Relationships take more time to develop, and you must nurture then to keep them positive."

Updating her question for the employee stakeholder group:

"What does it mean for us as leaders?  What would you do differently tomorrow if you were measuring relational capital with employees and other people working for the organisation, and if you were accountable for improving all of those relationships. Which ones would you have to work on first?"

ie do we need to treat high potential employees more like key customers, temporary employees more like other employees etc?

What do you think?