Earning political capital: knowing when to save it, spend it, or share it
Your leadership bank account
Every leader has a kind of invisible bank account. Instead of dollars, it holds political capital. It holds the trust, goodwill, and influence that you accumulate over time
Like financial capital, it can be earned, saved, invested, and spent. Unlike financial capital, it’s not tracked on a balance sheet; although I would argue it’s the most important asset you have as a product and transformation leader. Political capital lives in the perceptions of your colleagues, in the memories of your stakeholders, and it is the credibility that you’ve built over time through your actions
Product and transformation leaders who understand how to earn and spend political capital wisely can move initiatives forward when others stall. Those who squander their political capital on low stakes battles however, often find themselves without leverage when it matters the most
Why political capital matters
Political capital is the currency of leadership. Without it, authority is brittle. With it, influence is strong. Political capital is:
your buffer in high stakes moments. When you need people to back you despite risk or discomfort
built over time. Done through consistent delivery, fairness, and reciprocity
perishable. Neglect your relationships and your balance erodes
transferable. Your reputation follows you across roles and organisations, even if your authority doesn’t
How to earn political capital
Think of every interaction as a deposit or withdrawal. Deposits build up your balance. Withdrawals reduced it
Key deposits include:
delivering on promises. Reliability builds trust faster than charisma
supporting others’ priorities. Help them win, and they’ll want you to win
acting with integrity. Even when it’s inconvenient you stand up for what’s important to you and you make the hard calls
giving credit generously. Publicly acknowledge others contributions
listening deeply. People trust those who make them feel heard
Just like money, over time these deposits of political capital compound. Small, consistent actions build a reputation that becomes your most valuable asset
Example 1: The long game
A Head of Transformation consistently championed her peers’ projects in leadership forums. When she saw merit in prioritising their projects over hers, she made the courageous but fair calls to deprioritise her own initiatives so that she served the best interest of the business. Equally, when she saw her projects would produce more value for the business than those prioritised ahead of hers, she would fight for priority and she would fight fairly
Over 18 months, she built a reputation for being a generous but fair collaborator. When she needed urgent support for one of her projects, multiple leaders volunteered people from their projects and teams without hesitation
Lesson: deposits made over time create reserves you can draw on when it matters
Example 2: The quick erosion
A Chief Product Officer used her influence to push through a pet project of his that wasn’t strategically aligned to the organisation’s goals. It failed, and his credibility took a hit. When he later needed backing for a critical initiative, his calls went unanswered
Lesson: spending capital on low stakes or self serving initiatives depletes your reserves
When to spend political capital
Earning political capital is only half the equation. In some ways, that’s the easy bit. The other half is knowing when to spend it. Wise ways to spend your political capital could include when:
the initiative is strategically critical. When it aligns with the long term goals of the business
timing is urgent. When delays would cause harm or missed opportunities
people are at risk. When protecting your team or stakeholders requires intervention
values are at stake. When silence would compromise your integrity
Managing your political capital
Just as you would manage your financial bank account to keep it healthy, you need to manage your political bank account to keep it prosperous. Helpful actions could include:
tracking your deposits. Keep a mental (or written) log of when you’ve built goodwill but be careful you don’t treat it as a competitive scorecard
assess your balance. Who trusts you? Who owes you a favour? Who have you supported recently?
plan your withdrawals. Choose the right moment and the right ask. You could spend the political capital to further your own agenda, but you could also share your political capital with someone you want to build goodwill with if it is a valuable investment in your eyes
spend deliberately. Don’t waste political capital on issues that don’t matter
replenish after you spend. Follow a big ask with visible contributions to others so they feel appreciated and not used
Once you’ve mastered these foundational techniques to managing your political capital, you could try translating these financial management concepts to how you manage your political capital:
compound interest. Consistently make small deposits over a period of time to deliver exponential returns
diversification. Build political capital across different stakeholder groups, not just within your immediate circle
timing. Spend your political capital when your credibility is at its highest (e.g. after a big win)
investing. Sponsoring someone else’s success often yields unexpected returns
Example 3: Spending wisely
A General Manager in Business Transformation had built strong credibility over several years, having reliably delivered time and again for the executive leadership team. When she asked the board to back a risky but transformative initiative, they agreed. Not because the numbers were perfect, but because her track record made her trustworthy and worth betting on
Lesson: Political capital is most valuable when spent on high stakes, high impact moves
Example 4: Hoarding for too long
A General Manager in Technology Transformation was so cautious about spending their political capital that he rarely made bold asks. Over time his colleagues, his executives, and the board saw him as risk adverse and uninspiring. His political capital eroded not through overspend, but through underuse
Lesson: Hoarding political capital can be as costly, if not more damaging, as wasting it
Common mistakes leaders make
Product and transformation leaders need to be well educated on how to manage political capital, but even the most well educated find the practical application of earning, saving, spending, and sharing it hard:
confusing it with popularity prevents you from efficiently earning and depositing. Being liked isn’t the same as being trusted
hoarding it means you miss out on opportunities and are perceived as being timid
spending it too often on low stakes issues drains your balance without advancing your strategy
sharing it to blindly support someone else’s initiative that you don’t agree with puts you at odds with your need to act with integrity
Practice strategic generosity
The secret to managing your political capital well is to strive for balance. Earn consistently, spend selectively. Be generous with your deposits, but disciplined with your withdrawals. The best product and transformation leader:
invest in others and build goodwill broadly
spend on what matters and aligns asks with strategy and values
replenish quickly by following big withdrawals with visible contributions
play the long game and see political capital as a career long asset, not a quarterly tactic
Your home work for this week
What’s your political capital balance right now? What’s your strategy around earning, saving, spending, and sharing it when you head into your next set of quarterly planning activities?
Things you could do to help you with this:
reflect on your recent deposits. Where have you built goodwill?
identify one initiative worth spending political capital on
plan your ask. Who, when, and how
after spending, make deliberate deposits to replenish
Why this matters
Political capital is the invisible currency of leadership. It determines whether your ideas gain traction, whether your team gets support, and whether you can lead change effectively
Product and transformation leaders who master the balance of earning, saving, spending, and sharing don’t just survive organisational politics, they shape them. They know when to hold, when to invest, and when to spend boldly
In the politics of leadership, your capital is your reputation and your credibility. Guard it, grow it, and spend it wisely
Want to set up your political capital bank account and create the most valuable asset of your career?
Let’s work on this together. Here are three ways:
Influencing for Impact: This practical 2-day workshop is for you if you want to influence a decision maker, influence a change in customer or colleague behaviour, or influence someone to buy something from you
Executive and Leadership Team Coaching: Work directly with Lai-Ling to problem solve for your specific situation in a confidential setting. This is for you if you want to develop and execute on a game plan that is 100% tailored to you
Leadership Development: Invest in the product and transformation leaders in your company with leadership development that is customised for their roles. This is for you if you want your people to learn about people and politics