Good Will Equity

You may be asking yourself right now, “What is Good Will Equity?” The simple definition is that Good Will Equity is an imaginary account that everyone has internally that is either deposited into or withdrawn from when asked to do things by their employer.


A deposit is made when the company does something good. For example , giving you a raise, giving you a promotion, having a particularly good year in profit sharing distributions, etc.


A withdrawal is made when you ask an employee to do things that they don’t like. For example, asking them to work late or on the weekends, asking them to travel unexpectedly, etc.

Why the financial analogy?

I’ve always thought that this concept ties in well with the financial analogy as the parallels are numerous. Just like a bank account you can spend more than you put in. Eventually, you go negative and you have to change your habits like or not, or the bank may decide your not worth it and terminate your account. In a similar fashion a team-member may decide that what your asking is too much and decide to leave and go somewhere else.

You can also rack up debt on a credit card constantly making withdrawals and giving shallow deposits in the form of meaningless gestures, fluffy messages, etc. It may put off the inevitable for a while but do it long enough and eventually you don’t have the Good Will reserves to do the important things (ie. You can’t pay the mortgage).

Finally, in keeping with the financial analogy, the way you treat your team-members can have further reaching repercussions. Just like a bad credit score due to missed payments can keep you from being approved for a mortgage, similarly, burning out your team can cause you to not only lose them but to have the well poisoned for future candidates. You may suddenly find yourself in a position where it is difficult to hire because no one trusts you anymore.

Why is this important to me?

It is very important at that as leaders we never lose sight of this “Good Will Equity” bucket. It is easily to make decisions purely on the basis of monetary needs or gut-feeling but if we don’t take into account the “Good Will Equity” implications we can quickly lose our most talented individuals over things that honestly just don’t matter.

How can we know what a particular person’s “Good Will Equity” balance is? Unfortunately there isn’t a website we can visit or a phone number to call to check the current balance. You have to build a relationship with your team members and listen to them to find this out. This can be through one-on-ones, causal conversations or open discussing in things like team retros.

What Can I do with this information?

As you gain an understanding you have to stand up as be an advocate for your team and make sure that the company leadership understands the more intangible costs of a decision. You must ensure that when you ask a team-member to do something that you know costs “Good Will Equity” that you are doing it for the right reasons. You must also offset these withdrawals with deposits and insurer that you are showing your team the appreciation for the value that they provide in meaningful ways.

In summary, every decision that you make that affects your team doesn’t have only monetary costs but also has more personal intangible costs and as a strong leader you need to be cognizant of these costs and be an advocate for your team to make sure that when we are spending “Good Will Equity” it’s for the right reasons and that we are constantly paying back in.