The Most Powerful Force in Business


Albert Einstein is often credited with the comment, “The most powerful force in the universe is compounded interest.”  It reflects the result when even a small foundation continuously builds over time.  This works when assets are saved and payments are missed.  Very quickly, the final results become substantial.

A simple story shows conveys the impact of compounded growth.

A king wanted to reward a citizen for exceptional bravery.  The citizen noticed the king’s chess board and said, “Place a penny on the first black square.  Double it on the second black square.  Double that on the third black square and so forth.  My reward will be what’s placed on the last black square.”  Counting eight rows, each with four black squares, the king thought, “32 black squares. This is a small request.” And he granted it.

In the first row, the king placed eight cents on the last square.  Ending the second row, $1.28 was placed on the eighth square.  The ruler almost felt guilty cheating the citizen with such a paltry reward.  By the third row, the 12th square contained $20.48.  The fourth row ended with $327.68 and the fifth with $5,242.  That’s when the citizen began smiling.  The sixth row reached $83,886, the seventh $1,343,117, and the final square contained $21,474,836!  The ruler handed over the contents of the last square, relieved that the citizen had not asked him to use all 64 squares!

Building steadily and continuously achieves unexpected results.  In business, the real currency of growth is not financial, but it is more valuable and more rare.  It is the foundation of TRUST.  Implemented and reinforced, trust is the cornerstone for leadership, employee productivity and customer loyalty.  Those companies truly committed to its implications succeed beyond expectations.

It starts at the top

Leadership that truly “leads” strives to take a company, its employees and its customers to a higher level. They are not content with the status quo or with “good enough.”  If they want others to trust in their vision and leadership, they must show their commitment in three areas.

First, they must show they are serious about progress.  They have a vision of innovation, aspirational goals and a committed distain for mediocrity.  As such, secondly, they aggressively reward employees who contribute to growth.  New ideas are welcomed.  Change is encouraged.  Those who strive to “get by” are encouraged to step up and provided the tools and incentives to grow.  Every department becomes a potential competitive advantage. Finally, there is a very visible passion to understand and exceed the expectations of their customers.  There is a customer-first expectation in everything.

Trust in leadership demands continuous committed actions.  Empty talk is replaced with hard decisions, short-term sacrifice for long-term results and a deep culture of freedom to serve the customer and implement change and progress.

It demands performance from its employees

In return, employees must show that they are also worthy of trust. To have the privilege of working in a progressive, vibrant culture, great employees also convey three characteristics.  They must embrace a willingness to accept and actually desire change.  This mirrors the second attribute of being teachable.  While they may have pride in their initial skills, their ability to evolve as individuals and team players will establish their true value.  Finally, they will need to show that they are just as passionate about results and customer advocacy as the leadership.  They will be willing to put their own needs far below those of the customer and the company’s mission and vision.

It is accountable to its customers

The bottom line impact of trust is customer dependence and loyalty.  Effective marketing today exceeds simply differentiating features from benefits.  It creates the belief that a company and its products are indispensable to their customers’ success.   For the marketplace, a company earns trust when (again, a case of three factors) it is able to deliver confidence (that it puts the customers’ needs first), competence (that it is uniquely capable of delivering quality and performance) and uncompromising accountability (in ensuring customers understand how products and services can best be used for their success now and in the future as their needs change).  Too often, the last element is ignored through complicated websites, poor customer service and one-size-fits-all approaches to customer needs and application.

Like anything of value, trust requires discipline and commitment.  However, established by leadership, engaged by employees and delivered by the company, it results in a foundation for growth and success that compounds at an incredible and pre-emptive rate.  And what could create more “interest” than that?

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