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"Leadership  Capital":  What  It  Is,  And  How  To  Leverage  It

2/1/2023

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​Ironically, leadership is all in the eye of the follower. Indeed, a “leader” is one who is perceived as such by those they have to lead, and their ability to do so depends in large part on this perception, which we might then call their “leadership capital”. Based on Weber’s analysis of legitimacy (Weber, 1922), this leadership capital can be said to have at least three different sources...

3  Sources  of  Leadership  Capital


  • Tradition - This is leadership based on perceived consistency with collective identity, such as a school’s mission. Here, a leader derives their “capital” from the fact that they are seen as a good representative of the community . This capital consists in high levels of identification, and is associated with memory.
 
  • Ability - This is leadership based on perceived competence, such as clarity and efficiency. Here, a leader derives their “capital” from the fact that they are seen as models of professionalism. This capital consists in high levels of respect, and is associated with reason.
 
  • Personality - This is leadership based on perceived aura, which might stem from charisma, vision, etc. Here, a leader derives their “capital” from the fact that they are seen as a unique individual. This capital consists in high levels of inspiration, and is associated with emotion and imagination.

Ideally, the perfect leader is perceived as being equally relatable, competent, and inspiring. However different strategies exist to leverage one's leadership capital.

Enrich  Your  Leadership  Capital

Both strategies start with identifying one’s sources of leadership capital. Adopting a strengths-based approach (Rath and Conchie, 2009), the first strategy consists in playing to one's strengths and cultivating a main source. To take the example of an important piece of communication, a “traditional” leader might want to highlight the connection between an announced change and a school’s mission and values, while a “competent” leader could take a more practical approach and focus on the clarity of the path forward. Likewise, a “charismatic” leader's best option could be to lay out the vision and promises underlying the innovation. Of course, effective communication requires all three things. Yet, the message can still have a dominant tone, in line with what makes a particular leader able to lead.

One issue with this strategy is that leadership perceptions exist in tension with each other, largely because of the human tendency to think in terms of exclusive categories. Being seen as a “relatable” leader can make it harder to be seen as authoritative, and vice versa. Likewise, one’s leadership capital can hardly stem from both tradition and innovation at the same time. In many people’s eyes, being a highly competent professional could also mean that a leader might not be the most inspiring. Conversely, the aura of charisma might suggest that one is not the most practical or detail-oriented. 

Diversify  Your  Leadership  Portfolio

Far from owning one's leadership profile, a second strategy consists in downplaying this main attribute and making a special effort to diversify one’s leadership capital by working on areas for growth. This can certainly be advantageous, as different people respond to different leadership profiles. Since leadership capital is largely based on personal traits and social perceptions that are hard to modify, individual diversification can be hard to achieve, however. While it is important not to be seen as having glaring weaknesses (e.g., being disconnected, ineffective, or uninspiring), one interesting option to leverage multiple sources of leadership capital is to do so at the group level, by surrounding oneself with a team that combines different profiles. This has important implications in terms of recruitment, which is often based on “overall liking”, and thus on similarity. To the contrary, a visionary head of school might want to hire a principal that is quite different from them, maybe more practically minded; and a highly likable vice-principal with great social skills.

Conclusion

Either way, it is important for leaders to keep in mind that their leadership capital is an account they have with the community they are serving that yields dividends but will only grow if those are constantly reinvested. Each and every one of their leadership actions can withdraw from and/or add to this account, either building or depleting their capital over time.

References

Rath and Conchie (2009) - Tom Rath and Barry Conchie, Strengths Based Leadership: Great Leaders, Teams, and Why People Follow, Gallup Press, 2009

Weber (1922) - Max Weber, Economy and Society, Harvard University Press, 2019
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