Jan 14, 2019
Episode #27: Value Creation
Historically the market value of a company was often considered to be roughly twice its net asset value. Now the market value of a growing number of companies is, in some cases, forty or fifty times their net asset value. Why the change? It is because the market is beginning to understand and truly value the importance of the human capital within an organization.
There is a fundamental difference between knowing what to do and doing what we know. The former involves intellectual labor while the latter requires our emotional labor. Both types of work are important. The two processes working together are designed to create the greatest market value.
The education we received focused primarily on the intellectual labor of acquiring knowledge. This has left a huge gap in our development. The emotional intelligence that comes from doing emotional labor is essential to enable us to navigate through the challenges we face.
Increasingly, individuals are being passed over for promotion because of a lack of emotional intelligence. Emotional intelligence is developed from doing the emotional labor of doing what we think we know, from using the knowledge we have acquired.
Up until recently the main focus has been on doing intellectual labor within corporations. There was little awareness or focus on the need for emotional intelligence. As a result we see a much broader gap in the level of emotional intelligence among executives within organizations.
The authentic and emotionally intelligent among us have the potential to create the greatest value. While those that focus primarily on doing intellectual labor will find themselves beautifully equipped to deal with a world that no longer exists.
Thanks so much for listening! If you like the show please subscribe to Master of Business Leadership and rate and review it wherever you get your podcasts. It really does help new listeners discover the show.
Phil Johnson on LinkedIn