Wednesday, February 15, 2006

Gordon - Value Relationships

We love to think of economies in terms of 19th Century Industrial Models. It is just not on any more.

Tucked away in the ZDNet report on the re-valuation of the contribution of IT to the UK GDP is a comment from Roche. They believes that by underestimating the value of the software sector to the economy, the Government also underestimates the value of the "knowledge economy" as a whole.

Well, I agree but that takes me a step further to the value of relationship management. In the Relationship Value Model there is a contribution made by organisations to the economy when their relationship management investment pays of in enhanced relationships that generate added value through better understanding of values inherent in our culture.

It is a lesson that needs learning fast. British soldiers beating up kids diminishes the the value of our GDP because it reduces the value of our relationships. In other words it makes it harder to create wealth.

Underestimating the value contributed by, for example, Tesco is also a mistake and knowing the value of Tesco's relationship values would be helpful for Tesco and for policy makers such as the Chancellor of the Exchequer.

As we reduce the values that contribute to relationships we undermine reputation and that is very costly to restore.