The Business Value of Good Will
Ask an MBA student to define “good will,” and you’ll likely hear a drawn-out answer like “Goodwill refers to the intangible value the business has created above the value of its 
tangible assets such as manufacturing plants, cash on hand or equipment.” Wikipedia adds that “the term was originally used in accounting to express the intangible but quantifiable "prudent value" of an ongoing business beyond its assets, resulting perhaps from the reputation the firm enjoyed with its clients.”
But what does this really mean, in layman terms? It takes many shapes and forms, but specifically in the SharePoint world it could mean giving away free software, giving away swag and funny t-shirts, speaking at conferences and sharing expertise (generally without a sales pitch), helping connect partners and customers (whether or not it leads to your own sales), creating or supporting various channels (online and offline) where the goal is to help others to connect, engage, and to be successful.
The end result of good will is typically a stronger brand, a loyal customer base, and a positive reputation. All good things that we all want for our companies.
The hard part of good will is convincing those driven by the numbers and key performance indicator-mindsets to expand their thinking. As I discussed in a previous article on the role of evangelism (which is what I do), not every good will activity automatically translates into a customer call to action, or a trackable / measurable / clear-cut activity. How do you recognize the role of strong company reputation in winning a competitive situation? It’s pretty hard to do.
Another concern for those anxiously engaged in building good will are those naysayers and cynics who believe that nothing is the world is truly free – all of these freebies and experts and helpful content conceal something more sinister: sales. Well guess what….they’re right. Those of us who spend our corporate lives trying to generate good will for our companies are doing it with the sole purpose of generating more business for our companies. And so what? Is this really surprising? And does it really change the value of what we are providing? Does Coca Cola spend millions of dollars to be more involved with local communities and in giving to charities out of the goodness of their hearts, or, in the big picture are they trying to maintain (or build) name recognition, stay relevant, and get people to buy more soda pop? But I digress…
Most people recognize that good will is a necessary reality in today’s competitive landscape, and that it’s just the right thing to do. Being good community-citizens and trying to build your business are not mutually exclusive activities. Do we need to get better at how we measure and manage good will? Maybe, but does it matter?
What are your thoughts?
A man can fail many times, but he isn’t a failure until he begins to blame somebody else.
I think, when we turn good will the layman’s term into goodwill the business strategy, we are adding quantitative characteristics to a qualitative concept. Because, at the end of the day, a business’ goodwill efforts are driven, at their core, by the bottom line. A big part of my job is raising awareness of our company and its products through sharing knowledge, giveaways, and community events. We do this because we value the community, the ecosystem and our niche in it–but these aren’t random acts of kindness; they’re (hopefully) strategic, and absolutely measurable ones. Affixing dollar signs to these measurements can get rather dicey, but I do track engagement levels, site and social media traffic, sentiment etc…
@Richard Very interested to hear what Allin’s methods are, should you be able to share any of them!
Excellent point. I completely agree on the hiring front.
It is difficult but I think there are good examples in the marketplace (some public ones). Especially if you look at other sectors and other marketing activities.
I really like ‘the trusted advisor’ (both the book and the blog content) which gives some interesting and good ideas on some of the measurable impact (for professional services). Charles Green and I actually had a good conversation about the ‘trust’ industry. We should maybe see if we can get together for a phone call sometime or even a webinar on the topic.
We have a number of ways (at Allin) we are currently measuring the impact of employee contributions and ‘good will’. These methods are used by the organization to evaluate and estimate funding/budgeting for support and hiring. As a result these methods are probably the intellectual property of my organization and I shouldn’t disclose any without checking with them.
The good thing is that I have a number which I already had before coming here that I can share (since they are mine/based off of other experts opinions/models).
Let me hold off for a little bit and figure out how to best share this (probably in a blog post/article) and whether my organization is okay with sharing some of our methods as well (further enriching the content). I am pretty sure they will be, but the timing might be a bit delayed as a result.
P.S – Are you guys interested in sharing your methods? It might also be a cool idea to share a bit more in depth (behind closed doors sometime) too since both of our organizations are partners. Perhaps we can even provide a more in depth article or article series as a result! 🙂
Richard, some great points.
While I agree that you can’t “buy” good will, per se, you can – as you point out – support and encourage your people to do the things which foster good will, and in turn the company can receive benefits from that. However, you CAN hire people who bring with them a strong reputation and who can help develop and sustain organizational/corporate good will.
I don’t believe this is equal to “buying” good will, and here’s why: if the actions of those you hire are contrary to the nature of the organization (historically, or if the company doesn’t change to reflect the new direction), either the company will reject the new people, or the new people will leave the company.
This is an interesting discussion, but still doesn’t address the measurement question…..which is a really hard nut to crack. Thoughts?
You indirectly touch upon (or introduce) a concept similar to organizations “buying” goodwill at the end of your article.
I think that is the tricky part.
The reason it’s tricky is that ‘buying’ something infers that there is a transfer of ownership.
Goodwill can’t ever transfer ownership. It can be inferred, but I honestly don’t think it’s possible to transfer goodwill.
Some organizations understand and realize (both from an experience and a financial perspective) the value of paying support for that inference of good will. (Axceler is definitely a great example of one.) I would argue though that even organizations that make large donations are doing it at the lead and encouragement of an individual (or individuals) that truly care and are guiding and putting forth effort on the basis of personal goodwill.
Organizations don’t provide good will. Businesses don’t provide good will. The passionate and human people within those organizations are what provides good will.
I think there is a very real danger in business of organizations not fostering and encouraging their ‘human pipeline’ instead of their ‘sales pipeline’. In the services industry especially there is an extremely strong correlation between the quality of the individual and their contributions and the financial success of the business.
Perhaps it’s not true for every business. But at least in the services industry I think it’s less effective to think of it as ‘buying good will’ and to accept that as an organization you can’t own it and can only encourage and support it. If you think of it like that, then the measurements (at least that we use) tend to be effective (unless personal interests and business activities don’t align).
My quick thoughts on the topic. Hope it makes sense and helps add to your great points above. 🙂