Category Archives: 100 Enterprising Words

The origins of business language.

D is for… debt

100 Enterprising Words

This summer, I started a new series on the shared language of Enterprise. Naively, I thought I could rattle off a few descriptions and interesting stories about the words of business. It is proving to be a bigger project than I expected. Bigger and more interesting as I dig and delve deeper. Ever the way with archaeologists, we pop in a ‘test trench’ just to get an idea of what’s going on and then before you know it we’re hooked. Just one more hole… 

When you look at business words, really look at their origins and meanings, you’d think we were speaking in ancient Greek, Roman Latin, Old English and Medieval French.  We are!  (Those Normans have a lot to answer…)

Choose a word…

Help me choose which enterprising words to include.   Send me one of your favourite business terms.  I’ll see if I can excavate its roots and let loose a story of trade, commerce and social exchange.

We’ve reached the D’s.

D is for… Debt

Origin – Middle English  dette; from Old English based on Latin debettum ‘something owed’, past particle of debere, ‘owe’.  

Definition – Something, typically money, that is owed or due.

Wikipedia says:

 In finance, debt is a means of using anticipated future purchasing power in the present before it has actually been earned. Some companies and corporations use debt as part of their overall corporate finance strategy.

Debt as a strategy.  At every strength’s core lies the seed of its weakness and in this definition of ‘debt’ the germ that has infected the global financial system is called a ‘bet’. The next stage in this contagion is the need to ‘hedge’ one’s bets and so by selling a debt, the disease is transmitted.

Heads or Tails?

If credit is the heads, the confidence and trust of a promise (see my previous blog in this series) then debt is the tails of this particular currency.  It invokes an obligation, a moral duty, a commitment.

Debt is part of an accounting equation.  It is the equal but opposite partner of credit.  They are two sides of a closed system.  They represent two parties in a balanced business relationship.  The exchange between the two is mutual and beneficial.  The transaction ebbs and flows.

If the promise of future power fails then the balance is lost.  The mutuality of the exchange is destabilised and the nature of the relationship turns to one based on broken promises, faded dreams and eventually waking nightmares.

The Latin debere (to owe) and credere (to entrust) describe two sides of a social exchange, not a financial one.  We have stripped both meanings down to debit and credit in a financial ledger.

Euro consternation

The Eurozone is an economic and monetary union of seventeen member states. They have adopted a common currency as sole legal tender.  They have agreed that their monetary policies be set by the European Central Bank, the principle task of which is to keep inflation under control.

Inflation, of course, reflects an erosion in the purchasing power of money.  That erosion generates a depreciation in the belief that a debt will be paid, in a trust that the future will be bountiful, in a confidence that the system knows what it is doing.

Credit is not usury.  Debt is not a sin.  Betting on an ill-defined, random future is.

Financial advisers tell us:

Never invest more than you can afford to lose.

They point us to all that fine print about markets going up as well as down. But who knows how much we can afford to lose when it is our pensions and our own future purchasing power we are betting on?

Social exchange for mutual benefit is what makes the economic world go round. We’ve tilted off our axis.  We’ve lost our equilibrium.  The rich get richer and the poor get poorer. Creditors and debtors are locked in an asymmetrical dance.

Leave a comment.  Tell a friend.

C is for… company

Origin – Middle English from Old English compaignie; related to compaignon.

Definition – The fact or condition of being with another or others, esp. in a way that provides friendship and enjoyment.

  • a person or people seen as a source of such friendship and enjoyment
  • a person or group of people whose society someone is currently sharing.

 

The company of a Company

The company of a Company is a rare thing these days, but it’s what turns the friendship and enjoyment of companionship into the ‘spirit’ of a brand.

Friendship and enjoyment are not usually high on the agenda of any company executive.  In fact they are often suspected as potential sources of conflict of interest.

The two oldest companies in the world, and still extant, are in Japan. One is a construction company, Kongo Gumi.  It was founded in 578 in Osaka, to build the Buddhist Shitennoji Temple.  The second is an inn, Hoshi Ryonkan.  The inn was founded in 718 in Komatsu, on the site of a hot spring.  The two companies are in their 46th and 40th generation of family owners.

Nowadays, families rarely survive in the business world.  The intensity of relationship and the potential for conflict has caused the ‘ideal’ company to become an impartial entity, clearly distinguishing between ‘work’ and ‘life’.  If the company ‘spirit’ is not to be extinguished too, then there still, somehow, needs to be a shared sense of society.

How to to extend a familiar (if not familial) friendship and a sense of enjoyment of the business, is a challenge too far for many Managing Directors.  It is hard to create and maintain the company of a Company.

Trust between colleagues, partners and executives enables leadership (and followership).  It is also essential for enjoyable friendship.

Sharing what is important is key.  Sharing a way of thinking and expressing that belief is a short cut on the long route to relationship building. Working towards a shared purpose creates company ‘spirit’. Generating and maintaining that spirit is a lifetime’s work for any company.

When these two Japanese companies were founded, Britain was in the middle of a power vacuum created when the last Roman legions were recalled and the Saxon warlords rushed in to fill it.

I don’t know whether these two Japanese families created a company of companions, but they have managed to sustain a degree of stability and integrity for over 40 generations.

Photo: copyright 2011; Stewart McFarland; Shitennoji Temple, Osaka, Japan.

C is for… credit

Origin – mid 16th cent. (originally in the senses [belief,] [credibility]: from French crédit, probably via Italian credito from Latin creditum, neuter past participle of credere, ‘believe’, ‘trust’.

Definition – The ability of a customer to obtain goods or services before payment, based on the trust that payment will be made in the future.

Hard-nosed or soft-headed?

Building on last week’s word, contract, this week’s credit is an enterprising word based on confidence and trust in a promise.

It’s odd, isn’t it, that we believe business is characterised as objective, hard-nosed and rational and yet, at its core, at its heart, are judgements based on intangible, subjective, intuitive, even emotional criteria such as trust and confidence?

In business, nobody knows anything.  Our global financial system is a system of credit, risks, balances, trades, trade-offs and write-offs.  It is based on understanding human virtues and frailties not the ‘hard facts’.

Credit comes down to opinion and the willingness to give and taken a token of trust.  “Can you credit it?” we ask when we are betrayed and a confidence is broken.

Offensive defense

“Please do not ask for credit for refusal may offend” is a familiar sign over the shoemaker’s bench, the fish and chip shop’s counter… and now the high street bank’s security glass screen.

The demon of poverty is not just the debt but the inability to demonstrate that you can / will pay it back.  A lack of collateral, steady employment and a verifiable credit history is what prevents many from meeting the most minimal qualifications to access traditional credit.  Credit and cash flow go hand in hand.  Managing the money out, money in and the time gap between is an essential, demonstrable skill of entrepreneurs.

Micro-credit is a financial innovation attributed to the Grameen Bank in Bangladesh.  Very small amounts of credit are given to extremely impoverished people – to employ themselves.  It relies on the assumption that small amounts lent equals small risks taken and the belief that people desperate to generate an income, to build wealth and exit poverty will be a pretty sure bet.

Being credit-worthy means being trusted, believed and worthy of another’s confidence.

Credit may not make the world go round, but it certainly oils the wheels of society and enterprise.

Photo: copyright 2011 The Secret Archaeologist; A Medieval Token.