17 May 2005

Building 4 Levels of Capital in our Lives

How do we track and capture value? This discussion keeps coming to the surface because people struggle with the limitation of just counting currency collected or paid out. We want to generate wealth for ourselves and for others. For those in business, we think that money is the driver. But...is it?

What really creates value for us in the different contexts of our lives? How can we create relevant measurement tools to track and capture the real value for our personal development, our relationships, our concepts and our financial portfolio.

Perhaps we need to define the criteria for evaluating the areas that build capital:
-- Human Capital - the value our personal development and growth...and our reputation
-- Social Capital - the value created through relationships with others
-- Creative Capital - the value we create through our ideas, products, and capturing our knowledge
-- Financial Capital - the value of the currency we use to affirm the application or cost of our personal, social and conceptual contributions

Each level feeds and builds on the other. As we evolve as individuals, we make greater contributions through growing our relationships and concepts. This way, we generate wealth on many levels.

People and business and government are all seeking the same thing - validation and wealth. We just have different definitions of these concepts and different tools for measuring them.

Money is not the only thing to count. What are you counting? And...how are you counting it?


Jochem Donkers said...

Think quite a few of the issues you rise here are covered by "Intelectual Capital Statements". With intelectual capital statements organizations try to identify the resources that an organization uses to great wealth in the future.

I think those statements could be used to identify, and measure the development, of human, social and creative capital. This information can be useful for reporting to external stakeholders (investors for example) but also valuable for internal purposes.

In the coming weeks I will have a look into this and probably write another comment.

Barry Flaherty said...

Hi Colby,

I couldn't have said it better myself. Some of the circle that I have come to know and love are indeed blinded on the road to Damascus by the lure of the financial only kind of capital that pervades our world. If only they could see the light....