The Role of Resiliency in Creating Value
As you know by now, the Value Equation increases when the utility we provide to others goes up and when others perceive a decrease in the risk that we might not provide that utility. That covers two of the three factors on which we've focused so far in this book. The third factor has to do with the endurance of our ability to generate utility for those who transact with us; how we structure, or govern, our organizations will greatly affect this value.
Let's look again at the cleaning service that offered to clean your house each week for a year. You received a discount for paying up-front for that whole year. Part of your risk assessment in determining the fair value of that payment was consideration of whether the cleaning company would be around for the whole year to fulfill its obligation. If it went bankrupt six months into the term of your agreement, you would have vastly overpaid for the services you received.
When you invest in a government bond or corporate note, you are promised interest payments on a regular schedule and a return of your investment—which is really a loan—at the end of the agreed-upon time period. But, if that company or government goes away before it pays you back, you will realize substantial losses.
Now, assume that someone who is an external member of your network is considering whether to be a customer ...