Featuring insights from Elizabeth Mower, President, Creative Solutions Director of entreVector LLC
Business owners are facing greater complexity, increased distractions, and faster change than ever before. And in this environment, one critical element of business value consistently rises to the top: Social Capital, which is defined by the people, culture, and leadership practices inside the organization.
In a recent conversation with the Exit Planning Institute® (EPI), business leadership expert Elizabeth Mower explored why employee engagement has become a foundational driver of business performance and future readiness, and how advisors can help their clients address it thoughtfully and effectively.
Social Capital Starts on the Inside
Within the Value Acceleration Methodology™, Social Capital is one of the four key Intangible Capitals and covers the internal people systems of a business, including its culture, leadership behaviors, and day-to-day alignment with company values.
Traditionally, advisors focused heavily on developing leaders and key employees. But as Elizabeth explains, that approach is no longer enough.
“What we're finding now is that it's just completely insufficient,” Elizabeth says. “We were leaving those leaders and managers out to dry by telling them, ‘These are our expectations. These are our company values. And this is the performance that we need from you. Good luck.’”
Today, disengagement carries real risk. Turnover, minimal initiative, internal resistance, or misalignment can slow performance and drain value across the entire business. Alternatively, engaged employees strengthen culture, reinforce standards, and directly contribute to stronger profitability, brand reputation, and long-term enterprise value.
“A business that has engaged employees, all else being equal, is going to perform better. It's going to have higher profits, and it's going to succeed in the marketplace in terms of its brand reputation,” according to Elizabeth.
How Advisors Can Start the Right Conversations
Instead of instructing owners on what they should do, Elizabeth encourages advisors to help owners uncover their own insight through high-quality, open-ended questions.
Some questions she recommends:
- “Do you believe that you have a high or moderate or a low level of engagement among the employees in your business?”
- “What is the consequence for you of having disengaged or disconnected employees?”
- “Can you tell me about a time when you felt like your people were all working at their best and highest level? What was driving that culture of performance?”
- “Have you ever been in a situation where you realized that you had a team or a team member that was working against your company's mission or your strategy? How did you handle it?”
These questions bring real memories and real examples to the surface, which is often far more effective than statistics or generic advice. And importantly, advisors don’t need to be engagement experts. For this, they can connect to the right person or resource to help.
“Even if it’s not their specific area of expertise, every advisor can ask questions about a business owner’s experience with engaged and disengaged employees, then partner with experts as needed. I think advisors have a responsibility to go find those resources when they’re needed,” Elizabeth says.
From Comprehensive to Directional
Elizabeth’s “Let’s Rethink Business Planning” series argues that traditional planning structures are outdated. Only a tiny percentage of owners can or will commit to long, comprehensive planning processes.
Two forces are driving the shift:
- Owners are too busy for massive planning undertakings.
- Change is happening too fast for long-term plans to remain relevant.
Elizabeth proposes directional planning, which she defines as “constant movement forward with incremental course corrections all along the way.”
The Rise of the “Comp Stack”
Employee engagement is closely tied to modern compensation expectations. Traditional, financially focused incentive plans for key employees no longer match the priorities of today’s workforce.
Millennials and Gen Z workers and leaders value flexibility, development, purpose, and non-financial rewards as much as monetary incentives. Elizabeth advocates for building a comp stack, which is a clear, customized combination of financial and non-financial compensation elements tailored to the business’s workforce and performance expectations.
Every employee does not need an incentive plan. But every employee does need:
- A clear compensation structure
- Transparency around expectations
- A meaningful future path within the company
- The real condition of their workforce
- Risks related to engagement, talent gaps, continuity, and alignment
- Where DIY efforts are sufficient, and where outside advisory support is needed
This is what strengthens long-term Social Capital. Advisors can’t worry about how compensation and incentives worked when they first started their career. Instead, they serve their clients best in building social capital by helping each client identify what motivates and energizes their particular employees.
The Employee Risk Assessment Tool
A major challenge is knowing where to begin. To support owners without overwhelming them, Elizabeth created the Employee Risk Assessment Tool. This self-guided set of questions for leadership teams, aims to help leaders dig deeper on:
“When the questions are of high quality, the conversation that the leadership team is going to have is also going to be of high quality,” according to Elizabeth. “Advisors can provide the framework for a leadership team to have powerful conversations about how best to manage talent.”
Elizabeth has also provided a free Teams & Talent Readiness Check for the EPI blog readers, which is available here.
Soft Skill to Strategic Driver
Employee engagement is no longer a “soft issue.” It has become a measurable, strategic driver of enterprise value. For owners striving to grow strong, resilient, and transferable companies, social capital must be intentionally developed, supported, and aligned.
And for advisors, the path forward starts with great questions that will help owners uncover what matters most. This, then, can guide them toward the right resources to achieve this Value Acceleration imperative.
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