The human resources department of one large company I worked for traveled to the various manufacturing sites leading management seminars. I can still remember one where they put up one of those consultant’s 2×2 matrices. They compared “feel for people” versus “intellectual control of emotions.” Good and Poor. Of course, the top right box was good in each category. 

That is something for which we can strive as leaders of organizations whether non-profit, or profit, or church, or wherever 3 or more are gathered for a task.

I thought of this when I read Axios (one of my two favorite news sources) Finish Line newsletter about the private equity firm KKR. If you don’t know KKR, think the Richard Gere character in Pretty Woman.

The big picture: KKR operates what it calls “Centers of Excellence,” including one focused on human capital. One of its goals is to learn how to identify great leaders, whether current CEOs or future CEOs, for the sake of driving outsized returns. The focus is more on psychological traits than on résumés. Behind the scenes: KKR has discovered that having a genuine sense of empathy might be the key identifier, according to Pete Stavros, KKR’s co-head of global private equity. For example, does the person exhibit a sense of responsibility not only for shareholders and top executives, but also for the most junior of employees? In other words, a North Star of: “My people, my problem.” Other signals could include a company’s safety record or employee engagement scores. The bottom line: This might sound squishy, particularly to spreadsheet obsessives. But private equity might be one of the last industries to recognize the importance of corporate culture — and how that culture can beget capital.

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