How do you measure leadership acumen? How is it measured as it gained? How is it measured as it is expended?  Is there a subjective scale or is there an objective scale? And if so, what would be the markings or gradations?

These are the questions that I am grappling with today as I contemplate a variation on a quote that I have come up with in the last few days.

“Leadership capital is earned in pennies and spent in pounds.”

OK, I am not British and I realize that our currency is dollars. However, the point of the quote is that leadership capital is “earned” in small increments and it is often expended in larger denominations.

But before we can really talk about how it is gained or how it is spent, we need to get a handle on just what is “leadership capital?”

What is Leadership Capital?

John Maxwell has defined leadership as “influence.” As much as I agree with that at a very fundamental level, there is so much more to it, and Maxwell agrees.

At the end of the day, “capital” is a financial term. It indicates a value. The value may be relative and it may fluctuate. But there is a quantifiable value.

There are not many out there trying to define or describe Leadership Capital. At best it is a combination of hard and soft skills. It can be about intelligence, skills, integrity, and your track record or reputation. By incorporating many of these ideas, thoughts, and descriptions I am seeking to develop a notion of leadership capital as a measure of the extent to which financial organizations or political figures can effectively attain and wield the power inherent in their leadership position.

What are the components of Leadership Capital?

Here are the components that establish the “value” of your leadership capital. There may be more. But these will determine how much leadership capital you have in your leadership account.

Aptitude — Aptitude is all about the various skills, abilities, and talents that you bring to the role of leader. There are certain skills that are frequently exhibited by great leaders. They are frequently natural abilities and somewhat innate to the leader. However, they can be learned or developed or honed. Examples of these natural skills may be discernment, self-discipline, self-confidence, assertiveness, bravery, boldness, humility, and patience. There may be many more. But these are some of the most common skills found in great leaders.

What skills, abilities, and talents do you possess that have a direct and positive bearing on leadership?

Alliance — Alliances are all about the relationships that you form as a leader. A leader must be able to get along with their followers. They must be able to get along with their leader. And they must be able to get along and form other alliances with other leaders and teams. Leadership is not a “solo gig.”

What relationships are you fostering to increase your leadership?

Attitude — Attitudes are all about the emotional nature of your leadership. Are you pleasant to be around? Do folks genuinely “like” you. It is easy to get a “Thumbs Up Like” on Facebook. It is harder for those “likes” to translate into real likability and for you to leverage that likability to become the kind of leader that folks are drawn to.

What emotions are you displaying and how do they influence your leadership?

Altitude — Altitude is all about your reputation. How highly are you viewed by your followers and your leader? Reputation is one of the most precarious of the four components. It only takes one misstep or miscue to have a damaging and long-term impact on your reputation. This one is the hardest to gain and the easiest to lose.

What is your reputation and is it a lofty one?

Conclusion

Our Leadership Capital is the accumulated value of the components above. It may vary as we achieve success or experience failures in each of the areas that I discussed above — Aptitude, Alliance, Attitude, and Altitude. One thing is certain. It is gained at a different pace than it is expended. That will be the subject of my next article.

In the meantime, remember that our leadership comes from our influence and not our title or position. Further, our influence is grounded in our personal character.