…Leveraging employees emotional capital for value advantage
Generating value is becoming a key factor for organizational concern when it comes to legitimizing activities in the eyes of its stakeholders. In tough times, there is a great deal for organizations to focus on building real wealth in the business in terms of high-quality workplace relationships and passionate cultures. Treating employees as investors, providing recognition and praise regularly; encouraging professional development for everyone, building and maintaining a well-planned and managed relationships lead to building emotional capital of the employees.
In context however, it is said that emotions are influential on rational decisions and behaviors. This is justified by the seemingly effects individuals’ emotions have on their behaviors and the rippling impacts it has on the organizations’ performance, satisfaction, innovativeness and value creation.
Although most organizations tend to prioritize its external issues (competitors, suppliers, customers, financial and legal aspects, institutional barriers), which significantly affect the survival of the organization, it’s particularly becoming concern in maximizing how its internal aspects can produce a competitive advantage from the heart of the organization.
As such, organizations are provoked into finding a successful means of adapting their structures and goals, develop and leverage on the emotional capital of its employees to achieve its value creation ambitions. The question however is, how are the collective employees’ behaviors impact value creation? Again, at what level of impacts is the emotional capital an influence on individual innovativeness and improvement for efficiency and better decision-making?
Let us see how leveraging on employees emotional capital impacts organizational value creation.
What is Emotional Capital?
To begin with what emotional capital is, the renowned researcher, Thomas D’Ansembourg admitted that, one has to understand what is happening inside in order to understand the person in front or involved. He intimated that, one has to identify and understand all of the emotions related to a given professional context. Be it frustrations, anger or fear, it is important for leaders to have empathy, or the ability to feel what others are feeling to enhance great corporate relationships. Empathy such as the ability to put oneself in the shoes of a supplier who is being paid late will help one regulate negative emotions and act with better coherence in terms of values and goals. This is essential to improve collaboration and co-innovation.
However, emotional capital is a level of loyalty built over time and experience. At its core, it is an emotional connection that develops respective value. It is the currency that employees and its stakeholders in a relationship hold for value creation. Emotional capital build up is the stock exchange for all participants within the organizational framework or setting.
By demonstration, people are rich in emotional capital if they are high in self-esteem, self-regulation, have emotional energy and attachment, show resilience, agreeableness, and optimism. That said, Emotional capital built over time ought to be sustained by consistency and positive experience. For example, leadership and trust issues which remain huge components of emotional capital equation for value creation can derail the organization’s effort for value creation if not handled well.
The Emotional Dimension of Value:
The increasing concern by most organizations to establish how their employee emotions impact its economic activities is being championed well now. Fortunately, lots of researchers have concluded on how emotions affect performance, satisfaction, innovativeness, intention and behavior of organizations. It concludes that, emotions are influential on rational decisions and behaviors.
That concern translates into a greater commitment to society on the part of organizations, through initiatives in the fields of corporate social responsibility and more recently, sustainability. Hence, leading organizations have committed to shifting toward more inclusive business models and incorporating the creation of value for all stakeholders into their business management now.
By this, improving soft skills and effective management of emotions are regarded helpful to pacify relationships and improve efficiency and trust at work. The concern however is, why should organization express the desire and need for identifying its value creation enablers? By identifying an emotion like what brings joy and satisfaction to its employees, leadership of such organizations can establish what causes joy in the company, re-iterate the experience and find the means necessary to make an emotional capital of this for its advantage.
Emotions identified will call for how they ought to be regulated in order to adjust a response according to a given reality and of set values. Arguably, the proper balance of response by individuals and the organization collectively to emotional drivers must determine how those emotions consolidate for the wealth development of such organizations. Typically, an unstoppable and unwavering team have learnt to build a cohesion of wealth of emotional connection and leadership influence because it understands the need to turn this (emotions) to its benefits.
Much more, leaders who are high in emotional capital create value and influence through their capacity to identify with the aspirations of their staff and build shared identities with them. They are able to establish trust because they understand people’s need to belong to a group. They create and communicate compelling visions, they develop blueprints for action and they lead through their ability to motivate people to act together. In short, emotional capitalists represent leaders with an advanced capacity to incentivize staff by engaging with their prime motivators, that is emotions.
Why Build and Leverage Employees Emotional Capital?
The wealth of emotional connection among employees inspire power for organizational transformation. To maintain a productive culture in the current business climate, the balance sheet ought to include not only financial and intellectual capital but emotional capital too. Emotional capital is viewed as a critical component to building influence and strong relationships within the organization. The critical issue is that, emotional capital if its well leverage on, develops to increase trust, leadership influence and the strength of employee’s relationships with the organization. This assumes that, the feelings and beliefs that help an organization’s employees to form successful relationships with each other inures to greater benefits for the organization if they are nurtured well. It could further be mentioned that:
Emotional capital inspires employees to invest in the organizations success.
Take for instance, loyalty builds a following and it starts with the emotional connection. Business leaders and for that matter organizations become a source of inspiration with a connection which begins from a built emotional capital received.
A personal emotional connection will roll up to the team level. The more one invest in each, the more cohesive the team will be overall. If overall team-level emotional capital is cheap, it is advised that, such individuals be identified and be managed to turn their emotional contribution for a better investment. Perception is the reality, understand and manage perceptions.
Emotional capital encourages employees and teams to take more risk
It is an admission that, one cannot be an extraordinary leader by doing ordinary things. Extraordinary requires taking a risk and a leadership following that benefits from and absorbs some of that risk. Emotional connection builds the trust and foundation that brings both confidence and desire for others to take that risk with the leader or the organization.
This is demonstrated when teams develop the feeling of ‘indebtedness’ that drives them to desire more risk as long as someone they trust or emotionally connected to is leading it. Guess what? The leader develops a mutual indebtedness for their willingness, regardless of the outcome. This typically is seen where there is a natural balance of emotional capital developed for the leader and or for the organization. Empowering people to take risk is where the most power is.
Emotional capital lets employees forgive their leaders more easily and with fewer consequences
Forgiving is huge part of leadership and team orientation practices and this cannot be understated if the organization wants to maintain a better cohesion of bonding. The initiative for taking enough risk to be extraordinary could bring about some mistakes, misjudgments and sometimes an encountered failures. If leaders do not, then they are not taking enough risk either. Emotional capital built by the leaders with the team can make him or her take comfort from the leadership following and be guided by the enormous success which will compensate for the mistakes and failures because of the stronger emotional connection he or she has with the team.
The Effect of Emotional Capital on Corporate value:
There are lots of factors that influence corporate performance and individual innovativeness is considered paramount. Predominantly, emotion-related factors that impact performance are inherently built emotions of individuals within the organization overtime. How these emotions of individuals are managed for corporate impact and performance remain critical. Value creation from employee emotional intelligence drives the ability to be good at managing relationships and establishing greater creativity for innovation.
Individual innovations are seen as important dimension of learning which comprises rational, intuitional, affective and social processes to produce new things. Through effective emotional capital build up, individuals or organizations get aligned, get interconnected mutually to spur creativity and innovations, thus affecting the organization with good quality outcome and efficiency.
In business however, the loyalty one builds especially in leadership is a critical component for sustainable success. In other words, leadership and businesses cannot reach real potential without investing in and nurturing relationships or better still emotional capital to see real growth and impacts. How organizations invest in and leverages on its employee emotional capital is critical to its success and fortunes.
That mentioned, leaders need to build enough emotional capital to remain successful and continue to influence their team as well. The power of emotional capital in building a leadership following is that, so much loyalty is developed that the leadership following has a fear of disappointing the leader and that’s powerful way of building influence for leadership success.
Mastering Value Creation through Employee Emotional Capital Buildup:
The value embedded in the ‘stock of emotions, feelings, beliefs, and values that are held in and around an organization which motivate employees to positive action is critical. Constructively, a focus on organizational emotional capital should recognize the importance and role of emotion in work contexts in supporting and facilitating learning and innovation and achieving organizational goals, seeking to foster a positive emotional climate and a commitment to ensuring the emotional wellbeing of employees.
According to Robert K. Cooper, Ph.d, emotional intelligence is the ability to sense, understand, and effectively apply the power and acumen of emotions as a source of energy, information, connection and influence defines the employees’ intelligence emotionally. He emphasized that, emotional capital, however, is the make-up of all the skills and abilities that allow you to understand your own emotions, to recognize them in others, and to function with other people in a perceptive and rewarding manner. Organizational environments which are social environments with highly complex beings have their emotions impacting each other.
In conclusion, the capacity for value creation through the mastery and consolidation of employees emotional capital calls for developing effective communication platform to develop and enhance strong and effective relationships with organizations. Meanwhile, the adherence to building cultural systems to understand and promote the emotional play and the motivation for professional and organizational development aimed at building stakeholder cohesion for economic and social return inure to the organization value and consequential advantage.
Discovery….Thinking solutions, shaping visions.
Frank is the CEO and Strategic Partner of AQUABEV Investment and Discovery Consulting Group. He is an Executive Director and the Lead Coach in Leadership Development and best Business Management practices for Discovery Leadership Masterclass.
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