The Three Cs, Part II

A good place to start discussing the three Cs is with the easiest of them to address: the owner’s Competence to grow their business. And while it’s the easiest of the three, it isn’t necessarily easy.

Don’t make the mistake of confusing an owner’s competence with his intellectual intelligence (IQ). We can all cite examples of people who were brilliant, with advanced degrees from prestigious universities, yet who struggled with managing people or growing a business. As a result, their businesses settled into a size that fit their individual competencies.

On the flip side, most of us are also familiar with owners who never completed high school, yet built significant companies employing hundreds of people while becoming respected business leaders. So, while an owner does have to be intelligent enough to grasp business concepts, their competence isn’t necessarily dependent on intellectual intelligence or formal education.

If we divide the competences needed to grow a successful business into two broad categories it might be easier to grasp. We’ll call these categories Emotional Competence and Technical Competence.

The Emotional Competence of the owner is related to his personal values, character, and emotional intelligence—a term that professionals in the neuroscience and business development arenas use to describe a person’s ability to recognize and manage his or her own behaviors.

Emotional Competence can be something as complex as an owner’s ability to identify how their behaviors affect the culture of their company, which then affects their ability to attract and keep top talent. This is visible in companies where the owner’s ego is out of control or he has an emotional need to be the smartest guy in the room.

But, Emotional Competence by itself isn’t enough. Someone with highly developed Emotional Competence can still cheat their employees, customers, or suppliers, or act in other socially unacceptable or illegal ways. The role strong character and values plays is to direct an owner’s Emotional Competence to do the right thing.

Another, more basic, example is recognizing how emotional outbursts or not following through on commitments can restrict a company’s growth by limiting the pool of potential workers and customers who will tolerate this behavior. In today’s business world, fewer workers and customers are willing to stick around and get yelled at.

The importance an owner’s Emotional Competence plays in the success of a company is visible when he shows amazement at his company’s slow growth, low profitability, or high turnover despite the company constantly recruiting.

A first step in developing Emotional Competence is to commit time to work on our soft skills—communication, empathy, relationship building, etc.—and to regularly take time for introspection—looking deeper within ourselves to rediscover the things that are truly important to us, while gaining a fresh perspective on how our behaviors might be viewed by others.

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