Leadership Capital - Use it Wisely

This is fourteenth of several blogs delving into the origin and meaning of my sales leadership “Words of Wisdom”. You can access the complete list here  http://stm360.com/2019/06/words-of-wisdom-for-sales-leaders/

It’s important for sales leaders to understand the concept of “leadership capital” and how to use it.

I define leadership capital as influence - the ability get direct reports, peers, and your boss to act and/or behave in a certain way. Another component of leadership capital is respect.

So how does a leader acquire leadership capital?

When you first start in a position, you are granted a certain amount of leadership capital. Think of it as the benefit of the doubt. Over time leadership capital is built by supporting others, building relationships, treating people well and getting results.

Your actions and requests either build up or use up your balance of leadership capital. Let me provide a few examples…

Let’s say your CMO (Chief Marketing Officer) is not delivering leads and it’s impacting sales results. You impulsively march into the CEO’s office and demand  the CMO be fired.

Maybe the CMO deserves to get fired. But putting the problem on the CEO’s plate in that manner is a bad idea. Acting emotionally and not taking ownership of the problem and solution will cause a loss of leadership capital.

Another example -  you are trying to improve win rates and have set high standards for sales process execution. You demand 100% compliance on call prep and follow-up (important stuff) but are bit lax when it comes to keeping the CRM notes up to date. The lesson here is to hold the line on the important stuff - but don’t use up leadership capital on things that don’t matter.

How do you know if you are increasing or decreasing leadership capital in a given situation?

  • Keep your objectives noble (make the organization the beneficiary, not yourself)
  • Focus on what’s really important, not trivial matters
  • Act strategically, not impulsively (play the long game)
  • Take ownership of the problem and solution

Final thoughts - To be an effective sales leader, you must positively influence your team, peers and boss. Remember you have a limited amount of leadership capital - use it wisely.

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