26 Nov Corporate America’s hidden deficit
Deficits are growing and many people in government, business and academia are worried. The U.S. federal government deficit is now at an unprecedented level. Most economists including Federal Reserve Chairman Alan Greenspan and politicians on opposite sides of the political spectrum are concerned that it is simply unsustainable in the long term for our government to spend far more than it takes in.
Another deficit of great concern is our international trade imbalance. The United States is now spending about $50 billion per month more on imports than it generates in revenues from exports. Again, most economists and many politicians worry that this situation is simply not sustainable in the long run. They are worried about its impact on our country’s long term competitiveness and standard of living.
These financial deficits are serious problems that deserve lots of attention. There is another dangerous deficit that should concern us all, but it’s hardly noticed. The gap I’m talking about is the deficit in emotional capital that exists throughout corporate America today. It is largely invisible, but it is as real and scary as the national budget or international trade deficits.
What is emotional capital and why do most companies need more of it?
Kevin Thomson, author of the book Emotional Capital: Capturing Hearts and Minds to Create Lasting Business Success, defines emotional capital as the feelings and beliefs that motivate people to take positive action. The subtle truth is that employees are really paid volunteers in many ways. They will give as much or as little of their discretionary energy as is elicited from them.
Fear can drive employees into high gear in the short term but eventually it will demoralize and exhaust them. Only deep wells of positive emotions can sustain high levels of passion, energy and engagement in the workforce. Many companies neglect to build or replenish their reserve of emotional capital with employees. Indeed, too many of the policies and practices employed by corporate America today diminish rather than increase the supply of emotional capital.
The emotional capital deficit is overlooked because few HR departments try to measure or track it. Yes, most HR groups do employee satisfaction surveys but these efforts don’t get fully at the emotional drivers of performance. Satisfied employees can still be working on auto pilot – simply going through the motions and not giving any of their discretionary energy and passion to the pursuit of your business interests and goals. Satisfaction is not the same thing as engagement, commitment and passion, the prime ingredients of emotional capital.
How can you tell how much emotional capital your organization has with its staff? To get a rough idea, consider these questions:
Do staff join and stay at your company because of its mission, culture and values?
Do your employees feel like owners and that they have a real stake and say in their own career and financial destinies within your company?
Do workers give their all to their jobs because they feel inspired to not because they are compelled to?
Do work teams frequently socialize with each other during off hours?
Does your company have an active formal or informal group of alumni?
Do employees feel genuinely valued and that they really matter to your company?
Are your workers able to have both a successful career with your organization and a real life outside of work?
If you answered “yes” to many of these questions, you’ve accumulated a deep well of emotional capital among your employees. Nurture it and use it wisely. If you answered mostly in the negative, you’ve got some serious repair and renewal work to do. Start by making sure you understand the drivers of emotional capital in your workforce. Do an in-depth investigation – launch a focused employee survey, convene discussion groups, talk with key talent (not just your execs) one-on-one. Find out what policies and practices are missing that would increase emotional commitment and engagement. Take a hard look at those already in place and eliminate any that are sapping the energy, passion and zeal of your workers.
Like the federal government budget and the international trade deficits, corporate America’s emotional capital deficit can be significantly reduced, if not eliminated altogether by leaders with the vision and courage to invest in a better future.
Tony DiRomualdo is a business researcher, writer, and advisor with Next Generation Consulting. He works at the intersection of people, business strategy, and information technology to help companies create a committed and high performance workforce. Tony can be reached at firstname.lastname@example.org.
The opinions expressed herein or statements made in the above column are solely those of the author, & do not necessarily reflect the views of Wisconsin Technology Network, LLC. (WTN). WTN, LLC accepts no legal liability or responsibility for any claims made or opinions expressed herein.