Why businesses should prioritise long-term focus while building capital
Companies that prioritise laying down fundamentals of durability and nurturing valuable skills and know-how can persevere for longer periods of time.
Tuesday November 23, 2021,
5 min Read
In corporate speak, the term 'capital' has always been strictly financial in nature. A business with good capital usually means having strong funds and high valuation.
However, when business capital is measured only by factors such as monetary wealth, market capitalisation, and sales, we tend to eventually lose sight of other larger, longer-term goals in the process. Numbers are important, yes, but they are not the most valuable aspect of capital that will sustain a business over the long term.
The true definition of capital takes a much broader perspective than just a financial attribute
Business capital, apart from financial wealth creation, is building capabilities and deep know-how, putting down roots and developing a shared culture, enriching individual and community livelihoods, and creating impact that echoes across local, regional, and national levels.
For a business to stay its course and solve real-world problems at scale with long-standing impact, knowledge capital has to take precedence over speed-to-market expediency.
A good chunk of your funds and revenue should go towards constantly diversifying, broadening, and deepening your field expertise.
This also means that budgets for marketing and other auxiliary functions are usually sparse or even zero in the initial years. If your first set of customers see value in what you are doing, word will eventually get out.
Moreover, trust and brand credibility is a given when businesses are willing to immerse themselves in the overall process of building future-ready capabilities. The show of commitment forges stronger connections with customers.
Building this strong knowledge base goes hand-in-hand with talent nurturing. But when looking for talent, most businesses still restrict themselves to a highly selective talent pool based on paper credentials and fancy qualifications.
Unfortunately, credentials are simply rewards that celebrate an individual's test-taking capabilities and memory skills. They do not attest to a person's true potential and capabilities. Remove formal education from the equation and you have access to a huge pool of untapped talent that's waiting for an opportunity to be trained and developed.
Your R&D breakthroughs and skill-building initiatives are central to keeping the business steady through all growth stages. They will additionally determine how well you evolve your core competencies and have ready the required know-how/capabilities when the time comes to innovate or pivot.
All humans have an innate need to belong. This sense of belongingness stems from a place of both material and spiritual well-being. In a business context, this means a holistic work experience that always puts people above processes and addresses the full spectrum of what makes for a good life.
Material aspects like good pay, perks, promotions, and in-office recreation centres are needed but they will lack meaning if there is no space for spiritual qualities like freedom, trust, patience, and acceptance.
For individuals to be the best version of themselves, be it at work, home or overall in life, there has to be room to identify and hone their potential, bravely make mistakes and learn from them without the fear of being penalised. This spiritual growth and material safety are essential for individuals to belong at a workplace, find their contribution meaningful and voluntarily stay for longer periods.
Most businesses, however, approach this idea of building an empowered human capital backwards. They start with the goal of maintaining a low attrition rate and then try to analyse why employees leave.
Rather, it's necessary for businesses to ask themselves "what have we done to deserve the loyalty and commitment of our employees?" This reverses the focus from "why do people leave us?" to "why should they stay with us?", and urges companies to be grateful and appreciative of employees who choose to stick with them over the years.
A company's culture is its unique personality, which manifests in the form of strongly-held values, business ethics, and a common sense of purpose. Culture adds meaning to why businesses do what they do and also guides how they do it.
Culture gives a clear, collective goal for teams to work towards, spiritedly. This cannot be achieved by maximising profits or developing quick win strategies; they seldom motivate people or encourage them to bond.
Cultivating this value and purpose through culture requires realigning oneself with the awareness that no business is larger than life, and thinking more from the angle of how a business fits into the bigger picture.
A deeper understanding of the role that every business plays in society and how it creates a positive impact in others’ lives becomes the bedrock of a sustainable culture—which, in turn, becomes a business' moral compass that encourages responsible choices, makes it a community asset, and helps scale impact along with growth.
Redefining capital to include long-term focus
Hyper-growth and near-instant ROI look glamorous in the short term but they lead to vicious debt traps; the very model is short-lived and untenable in the face of adversity.
On the flip side, companies that prioritise laying down fundamentals of durability and nurturing valuable skills and know-how can persevere for longer periods, and contribute better to community growth and overall socio-economic upliftment.
The article is authored by Mr. Praval Singh, VP of Marketing and Customer Experience at Zoho.
Edited by Kanishk Singh
(Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the views of YourStory.)