Political Capital in Organizations

by Krishna on August 1, 2007

What is the most important factor that affects your ability to be an independent decision-maker within your organization? I believe that it is the political capital that you have earned through your performance, actions and attitude.

Let us define what political capital is. It is the amount of trust that your managers have in your capabilities, your good judgment and your intentions. It is the amount of risk that they are personally willing to take to support your actions. It is the amount of heat that they will take to protect you from their managers when things go badly.

When you join a company, usually you have already earned some political capital through your performance in the interviews. Someone thought you were good enough to be hired, unless, of course, there was a real labor shortage and you were the least worst they could get. Hopefully not, but in that case, you actually start out with zero or negative capital and you have to work to accumulate a positive balance.

The first few weeks of employment comprise a critical time period. During this time, your political capital is highly volatile. Your actions and words are subject to great scrutiny as people try to understand you better. Whatever impressions you make during this period last a long time. If someone forms a negative opinion of you, it will be much harder to change that.

In most situations, people manage to perform well and they earn the credibility and trust of others. They have earned good political capital. An organization must have a high percentage of such people to be stable and operate effectively. The reason is that the goodwill earned acts to protect the organization from falling apart when things go wrong.

For example, consider a person who has accidentally deleted some critical information. If she has not earned the trust, the organization will question her competence and perhaps her integrity, instead of realizing that it was a freak accident. An organization that cannot operate on trust must rely on more formal policies which, while effective in achieving the objectives, introduce more bureaucratic overhead and reduce agility.

Now for an individual employee, political capital acts like regular capital. They may decide never to use it, keeping it as insurance for the future. In the past, when lifelong employment was the norm, this was usual. Once confirmed, people would just do their jobs, take no risks and, as a matter of course, rise up the corporate ladder to a position where they would retire from.

Employees can also decide to invest their political capital in taking risks. The bigger the risk, the greater the political capital being gambled. This means that if you want to take greater risks, you should have earned more political capital, through past performance. Usually the more senior you are in a company, the greater capital you have and the greater risk you can take.

The greater the risk, the greater the potential reward as well as potential loss. If you succeed in a wild gamble, you will have earned a lot of new trust and be able to do more in the future too. However, if you fail, you are probably reduced to being an outcast within your organization, having destroyed your goodwill and betrayed those who support you.

You can strike a middle ground by taking calculated risks and slowly increasing your political capital inside the organization. Usually, the people who are confident about handling new challenges, but also careful about potential downsides and organizational concerns, find themselves preferred over the gamblers and the nay-sayers.

It is also possible to destroy political capital. For example, a technically competent person who is abusive. Compulsive carelessness by person who is otherwise intelligent. Blind disregard for existing organizational rules and processes.

The easiest way to throw away political capital is by not taking care to maintain a good working relationship with one’s immediate manager. An employee’s manager is their mouthpiece to the rest of the organization above their level. Managers can provide a growth environment with opportunities to the employee. But it is quid pro quo. So the employee has to offer performance and support for the manager in return for greater political support.

When a person leaves a company, they don’t exit with empty political capital. If they have done their job well, they would have created many good personal and professional relationships and those can last a lifetime.

{ 1 comment }

cOOL_aLIEN_fRM_mARS August 3, 2007 at 3:44 am

Hi
This was really informative…
thanks 🙂

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