As the steady drone of “budget crisis” and “federal government shutdown” continues to pound every sensory receptor, I find myself thinking of that great accounting term “goodwill”. By nature I abhor the entire idea of politics, and to even slightly touch on the topic makes me feel, well dirty, but at the moment it is the topic de jour. And as is often the case when things are not going “well”, a quick look at things reveals some classic, fundamental truths.
It was one of the more interesting parts of accounting, and that is saying something. It is easy to take a shot at accounting classes. To my rather unsophisticated business mind during those early MBA years, the idea of goodwill made a great deal of sense. If the customers, industry and society believe in the firm, the product, the service, the team, the leadership, etc., well that is worth something. Name brand, product recognition, the benefit of the doubt, whatever it might be, it all falls under that umbrella of “goodwill”. It all has value and it is quantified, listed and quite literally accounted for on an annual basis. It was one of those things I knew intuitively, but to see it recognized and quantified, well that lesson stuck with me.
The concept of goodwill became one of those things that was never far from the surface. When in a direct leadership role, maintaining the goodwill of the team was always important. Caring about your people, helping them advance their careers, find work-life balance, grow professionally and personally, they were all deposits in the “goodwill account”. When times were tough, when the team needed to really dig deep, we had that “goodwill account” to draw upon. Same concept has applied to business in general – treat the clients well, go the extra mile, under promise over deliver, treat vendors and competitors well, and just generally do the right thing…it has paid dividends.
Good governance. Good leadership. Goodwill. It all goes hand-in-hand yet no one in our collective “ruling elite” seems to get it. The very idea that a business would act in its own self-interest with complete disregard for its customers, stakeholders, suppliers and shareholders is absurd. Every successful business realizes the value of goodwill. They have to list it and quantify it in their Annual Reports. It might be wise for “our leaders”, regardless of party, branch, or level, to take a moment and think about the idea of goodwill. Dare I say it would change their behavior…maybe.