Tangibles or Intangibles: Where’s Your Value?

How can a CLO enhance corporate value through intangibles?

Most chief learning officers likely have known or encountered an inspiring leader. And although these individuals rarely fail to make an impression, pinpointing the essence of their leadership qualities presents challenges.

The lingering feelings that affect our perceptions about their leadership skills are usually the intangibles: trust, intelligence, loyalty, commitment, love and courage. Conversely, most seasoned leaders have learned to master the tangible skills of their work such as software skills and profit and loss reports, that is, the things we can see, review, discuss, evaluate, document and quantify.

Yet, as Jay Cross pointed out in his column in the June 2007 issue of Chief Learning Officer magazine, “Eighty percent of the value of the Fortune 500 is intangible. Take Google. On paper, Google’s net worth is about $5 billion. That’s what it paid for computers, buildings and stuff you can see, minus debts and the expense to wear and tear. Yes, stock market investors value Google at $135 billion. Where does the extra $130 billion come from? Intangibles.”

Where’s your value, tangibles or intangibles? This choice plays an important part in the learning executive’s role.
I have found Google is not the only company that knows how important intangibles are in modern enterprises. So, how can a CLO enhance corporate value through intangibles?

This type of leadership learning requires a different approach than the well-refined learning methods used to improve tangible job skills. One of the most effective ways to build value begins with an understanding of courage action skills (the intangible behaviors learning executives tend to eliminate from their annual calculations).

To understand the importance of courage action skills requires an understanding of courage. What is your definition of courage? Do you know the origin of the word?
Courage is neither Greek nor Latin. It’s Medieval French: “corage” (“heart and spirit”) or “cuer” (“heart”). One of the original seven virtues, courage has become the forgotten virtue because people fail to recognize the significant elements of courage in their everyday actions.

Awakening people to true “heart and spirit” courage allows them to recognize their innate courage, integrating and expressing that through courage action skills — the intangibles that build value and stability in the workplace. What does courage leadership at work look like?

Take a minute to look around, and you will observe courageous people: leaders who guide their team members to move from their strengths to embrace their “challenged” leadership areas, employees who are willing to speak the truth and then hold themselves accountable for the outcome. These people control their own destinies. This is courage leadership.

For more than 10 years as a learning consultant, I have researched courage, studied its significance to the human condition and defined the courage action skills that empower people to develop personal courage. In countless interviews, people from all work levels and situations have said, “Doing my job is easy — I have the skills. It’s dealing with the people (that is, people’s personalities and egos) I work with that’s hard.”

The human condition, with its ego-based perceptions and mental projections, shapes the reality within which all work must be accomplished, and these immeasurable intangibles make employees both valuable and flawed.
This directly points to the need for courage action skills, but as with all learning curves, a conscious effort is required to develop personal courage and insert courage action skills at work. Awakening courage can be as simple as reading an autobiography of a courageous person or watching films that portray true courage.

Learning executives can be a model in developing a courage leadership environment. They can demonstrate and initiate a contemplative practice that develops their abilities to reflect on who they are at work. They also can exhibit intangible decisions that apply courage action skills such as eliminating manipulation in favor of being direct.

Once you begin to recognize courage, the first step is mandatory: You must embrace the true “heart and spirit” definition of this forgotten virtue. In Latin, “virtue” means “energy,” so to realize the full potential of courage’s empowering energy, we must become alert to the facets of life that affect our expression of courage, such as swallowing your voice when witnessing an injustice.

How can intangibles be valued? CLOs can take the rest of their lives to split hairs over whether organizations should focus on training and development for tangible, hard skills or focus on the major market value reflected in a company like Google, that is, the intangibles.

If you choose the latter, you will begin to notice that the dominant issue hovers around the variety of people who come to work each morning with different integral levels of courage consciousness. These integral levels either lift the company’s spirit or keep it complacent. (Complacency is one of six courage killers, and conformity is another.)

If your organization’s goal is to improve productivity, retain valuable employees, diminish stress (e.g., number of “mental health” days) and increase team effectiveness, then it’s critical to stop and reflect on the organization’s “mood” and its level of dysfunction. For example, do the majority of your employees come to work saying they have the opportunity to do what they love and do it well and that their co-workers are great?

Lapses of Courage

Hard skills do not determine business success. In fact, business failures almost always can be traced to lapses of courage by the company leadership. The empty shells of these once-vibrant companies clutter the corporate landscape like rusting hulks in a naval boneyard. Why? Far too many companies keep courage on a leash in the workplace, allowing corruption (another “courage opposite”) to run rampant.

How do businesses staffed with the “best and brightest” employees who all “did their jobs” end up as the latest example of corporate scandal and mismanagement?
The origin of corruption lies in a broad spectrum of organizational hypocrisies that can stem from intangibles such as dysfunctional management teams, interpersonal animosities or a core group of unconscious people whose questionable interpersonal skills interact to undermine an organization.

The money that corrupt organizations spend on lawyers, public relations campaigns and damage control is a huge waste of resources, dwarfing the negligible cost of developing value through intangibles such as a courage leadership business model.

Profiles in noncourage are rampant, so how can learning executives nurture individual courage growth? Several intangible insights are required to develop a leader’s courage and the organization’s cultural awareness into courage leadership. The following describes a problem and a solution that show how you can learn what a few of these intangibles look like, as well as how to insert courage awareness into the workplace, thereby allowing the intangibles’ value to shine through.

Problem: You aren’t trained to value (much less celebrate) intangibles

While preparing to conduct a courage leadership symposium for a large association, I received a call from an administrator for a state school board association. He wanted to attend the program but was having difficulty convincing his boss that the expense would be worthwhile. After all, the symposium dealt with soft skills that provide no demonstrable return on investment. Therefore, according to the man’s boss, the symposium offered nothing applicable to the work environment.

I responded with this thought: “If bosses like yours have hired all the best employees, then why is organizational depravity so pervasive at Enron, WorldCom, Tyco and so many other companies over the years?”

Surely, loads of people turned a blind eye to the myriad missteps. Unfortunately, they learned too late that denial is saying “No” to courage.

One solution: Recognize the “first red flag”

What if the CLO conducted a simple experiment with 10 to 20 managers? These managers would be required to poll their staff members with one simple question: What is the most exasperating or taxing part of your job?

Confirm with them that their responses are confidential. You will find the majority of responses will deal with the human condition — the “people stuff,” not the tangibles.
For example, a new employee feels excited about his or her position and opportunity, then right out of the gate, a threatened co-worker sabotages that person. Or perhaps the learning executive notices an employee shows up, giving only 80 percent to a project with a high learning curve (tangible skills) because he or she knows the “Type A” peer will pull the weight. These keen, intuitive observations signal a “first red flag” situation. What do you do?

The phrase “first red flag” carries well-known implications, but the crucial questions are “How do you recognize that first red flag?” and “How do you respond?”

A man I will call Jim has worked in finance and management for more than 30 years. One of the first red flags he notices “is when a staff member says, ‘But this is the way we’ve always done it.’ I have enough experience to know what that means: ‘I’m inflexible, not open to new ideas and not open to change.’ For me, that response means it’s going to be an uphill battle.”

Jim knows the battle can be won but not without enormous effort (“These people have drawn a line while I am trying to create a different approach”), and his philosophy requires that he insert the courage of his convictions and values and stay the course.

Noticing the first red flag presents a challenging situation because we want to believe the best: We can work with pretty much anyone.

“The steps from initial resistance to showing someone the door are many and vary with each situation,” Jim said. “Over the years, I have had to dismiss only a few employees while having many more resign rather than adjust to change.”

Where do you draw the line when you detect a red flag? Based on Jim’s assessment, should he coach the people to accept the changes or prepare them for their exit?
“When people show who they are, why not believe them the first time?” he said.

First red flag warnings are everywhere — people cannot stop showing you who they are.

How does courage leadership play a role? It’s not about ratting out co-workers but about one critical point most employees lose sight of: The focus of any organization or team must be to attain results ethically.

Power plays are out. Ego is out. Holding people 100 percent accountable for results is the ultimate endgame. Promoting courage leadership represents an intentional business strategy. What intentionality is represented in your organization?

Final Outcome

The keystone to long-term business success is the ability to design, implement and sustain a legacy that transcends generations. Once the CLO realizes there is a direct correlation between your success quotient and your courage quotient, all you have to do is to declare your courageous intentions and then act on them.

Are you willing to stop splitting hairs and unleash the courage in your workplace?

Sandra Ford Walston, principal, Sandra Ford Walston, can be reached at editor@CLOmedia.com.