Goodwill is bankable

Founder's Mentality - Goodwill is bankableWhile in Delhi recently, I had the great opportunity to meet with Krishan Kumar Modi, the chairman of K.K. Modi Group and son of the company’s founder. We were talking about some of the founding principles of his highly successful diversified group of global companies and he said that one of the most important was the idea that “goodwill is bankable.”

“The company is built on the trust the leaders have for each other and the trust our customers have in us,” Modi explained. “To bring this to life we introduced the notion that ‘goodwill is bankable.’ Internally, this means that the actions you take today to support your peers, your subordinates and your bosses represent an investment you are making in your future.” He elaborated: “You can—and are expected to—draw down from this investment to get the support you need. Externally, this means that the actions you take to support our customers are an investment you are making on behalf of the company in our future. And we can draw down that investment when we ask our customers to trust us as we offer new products and services.”

I love the simplicity of this idea, particularly as it relates to the internal social contract. We have mentioned that one of the most important things an insurgent can scale is learning. If a company accumulates more experiences and learns from them, it can stay ahead of its competition (see the example of Leon Restaurants in this post). To accumulate experience requires peer-to-peer learning systems. K.K. Modi’s principle that “goodwill is bankable” is, for me, the cultural accelerant that increases the velocity of peer-to-peer learning. Your support of your peers is an investment you are making in your future.

Simple.

 

This entry was posted in The paths to Great Repeatable Models by James Allen. Bookmark the permalink.

About James Allen

James Allen is a senior partner in Bain & Company's London office and recognized as a leading expert in developing global corporate and business unit strategy. He is co-head of Bain’s Global Strategy practice and a member of Bain & Company's European Consumer Products practice. He is co-author, with Chris Zook, of Repeatability (HBR Press, March 2012) and Profit from the Core (HBR Press, 2001 and 2010).

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