Replying to LO31093 --
I think you need to draw yourself a picture of everything of value
that an organisation's exchange could revolve round
One the on side there is physical (lifeless) stuff, especially money
On the other side there is learning as its systemised both so that
people develop careers and so that the organisation's context spins
competences to deliver offers that no other organisation could- so
what is it that most makes or breaks each stakeholder's goodwill in
terms of what they see that organisation as unique value on; however
the system when you think of it has tense elasticities; if serving one
stakeholder's greatest trust is positively related to serving another
that spins virtuously whereas if one stakeholder's trust can only be
achieved by taking from the other , that's vicious ; all that is a
first view of the external pulls on goodwill, then internally there
are emotional issues like how much do employees trust each other to
share knowhow, is there courage to pass bad news up the line when a
competitor does something innovative in the market, or on the negative
side: are people hiding things or has someone left who was
indispensable as a knowledge or innovation connector across many
people?
So now we have a picture of relationships of service productivities
and demands where crucially value multiplies according to quality of
relationship connections all around serving the value exchange
(trust-flows, goodwill); that's good if all the connections around
the system are strong, but very risky if you lose even just one
coordinate of goodwill; so Andersen zeroised the trust of society and
however many billions its value or goodwill was among its other
stakeholder, the multipliers of the system mean that the outcome would
be billions times 0 = 0, not billions +0= billions which tangible
accounting assumes because lifeless things add up separably; equally
one person's lack of courage, if that person has been put centre of a
company's value exchange without any co-worker checking, can zeroise a
company as Leeson did to Barings
So why do companies take these risks? Because accountants do not in
their record keeping use multiply, they only add. Oddly intangibles
was a word coined to represent this second side; meaning so intimately
interconnected that we cannot use + and separable assumptions to
measure it. But then in the late 1980s as service and knowledge
economies became more and more of the value being exchanged global
accountants blinked. They did not like the idea that some other group
would have to do a second and opposite audit to themselves; they
didn't want to share measurement gateways to the boardroom. So they
did what I regard mathematically as wicked bordering on evil; they
started trying to separate components of goodwill like brand asking
for valuation algorithm to fill the hole in their books as if it was
made of separable parts that they could then add up
Of course there is one other problem as we reflect on the wrong
globalisation crossroads this led boardrooms down. If we'd had true
goodwill maps being audited at the same cycles as cashflow, then
remembering that even by accountants static projections goodwill is
now the larger part in any company involved in global markets, we
wouldnt have had all this nonsense that a boardroom being legally
responsible to shareholders has to maximise numbers each quarter,
because the goodwill maps would have shown that was the most
disastrous way of snapping the whole organisation apart. The biggest
loser of shareholder value analysis dictated by numbers absent of
goodwill is the investor in pensions to be as well as society! So we
are losing democracy as you read this.
Instead we are left with the world's largest organisations measurable
only to how much can we take from the world each quarter, and compound
quarter after quarter. This isn't a value exchange that will make
anyone other than speculators wealthy. Its not sustainable. In fact it
is the root cause of most terrifying decisions and distrust
circulating in the world at every level. Addiction to addition has
spun a most vicious form of globalisation on our world - the opposite
of a goodwill moderated one - and like any system that spins faster
and faster unless we halt the badwill madness soon , most people I
know believe we are entering an age at least as dark as the 1930s.
That's what badwill compounding through all the world's most powerful
organisations- corporations, governments, media, is systemically
certain to lead to. As far as our maps can see.
As an open source movement, we give away goodwill mapping to anyone
serious enough to picture it in industry contexts etc where this
conversation can go more granular than the generally depressing
picture I have painted. I don't why it is but the one country that has
adopted this so far with huge energy is India. In the West, we could
be enjoying a globalisation that multiplied value for all way above
zero sum, instead if anything we are going below zero sum in our world
trades.
Chris macrae
www.valuetrue.com
wcbn007@easynet.co.uk
MAP! the new book on value exchange theory of firm , value
multiplication of intangibles and open governance of trust-flow out
later in the year
http://www.amazon.com/exec/obidos/tg/detail/-/0470857390/qid=1084178350/
sr=1-1/ref=sr_1_1/103-9320818-2798227?v=glance&s=books
>Chris, what do you see as the relationship between goodwill and
>trust, or are they pretty much synonymous? While we're at it, how
>does "trust flow", which you've written about before, fit in to the
>picture?
--"chris macrae" <wcbn007@easynet.co.uk>
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