The principle of capital

Bank-BookA young couple discovered that they had an uninvited and unwelcome visitor in their tiny apartment – a mouse. The wife was especially unfriendly to the guest. The couple succeeded in catching the mouse in a trap, but to their dismay they had succeeded in catching the mouse alive.

Now their dilemma became even more difficult. What were they to do with a live, albeit injured mouse? Not possessing the courage to simply murder the thing in cold blood, they devised a strategy. They filled an empty jar with water, dropped the mouse into it on their way out. They thought that while they were out for the evening the mouse would not be able to survive.

When they reentered their apartment, they learned that their nefarious plot had failed. The mouse had been able to survive by standing on one foot and stretching as far as he could so that his nose just barely cleared the water.

I know, this is a blog on leadership and management, so you are doubtless curious as to what a story about a mouse has to do with that subject. Quite a lot as it turns out.

This series is on motivation and manipulation. Called Flipping the Switch, I’ve been discussing the many principles and techniques on the subject. This article is one of a series within a series on how principles of finance correlate with relationships in the workplace. But now, I’ve brought a mouse into the picture?

I have used that story in encouraging young couples to live within their means. Unfortunately too many live like the mouse, almost drowning in debt and able to survive only by extreme effort hoping no one adds any water to the jar, as it were, and counting on their personal stamina to simply keep their noses above water.

On the job relationships can become strained. The stress and demands of the job, tight deadlines, rude customers, difficult co-workers, and/or ineffective leadership and management can push reserves to the drowning point.

In the first two articles in this mini-series (here and here) I equate motivational relationships to having a line of credit and reserves. But there are times when reserves are low and relationships become forced and functional, when a spirit of cooperation seems to have flagged. What is a leader or manager to do?

The principle of capitalization means you strive never to let conditions get that bad and when they do, you take immediate steps to restore a positive balance.

If there are unresolved issues, resolve them. Prevent problems from becoming bigger problems.

If there are unpaid obligations, pay them or find some way to clear the account. This works both ways. Sometimes differences problems can simply be overlooked. But if incompetence is being sanctioned or if the viability of the company is under threat, and if you thought you could overlook the problem but you find yourself still irritated or resentful, it’s time to fix it. Don’t simply let things fester. If you promised something, deliver on it. If someone promised something to you and did not deliver, deal with it.

If you’re too busy to attend to your producers, you’re too busy. Sharpen your management skills, tighten up on control methods, focus on the activities that bring the best results.

Build your capital balance a little at a time. At the bank I use they have an interesting benefit. If I use my debit card  to buy gasoline for my car at $35.62, the bank deducts $36 from my checking account, pays the gas station $35.62 and puts 38 cents into my savings account. The same works for any debit card transaction. 38 cents may not seem like much but over time it can add up to a significant amount. The same works here too. So-called casual remarks, remembering family matters, acknowledging and celebrating success all add up.

The next principle, Risk management, ties into this one. Talk to you on Monday.

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