Values are created in the encounter between people

We often talk about results, margins, technology and strategies. We read about billionaires, top managers, investors and owners. We follow stock market developments, quarterly figures and growth curves. But in the middle of all this there is a reality that rarely gets the attention it deserves.

Watercolor illustration of people in professional conversations, reflection and collaboration around innovation and knowledge development

The people.

Those who meet customers. Those who answer the phone. Those who develop the services. Those who cook the food, drive the bus, build the systems, clean the stores, repair the machines, write the codes, help the patients, teach the children and make working life work – every single day.

These people are the invisible capital. For many years, we in business and the public sector have been concerned with efficiency, systems and technology. It is important. Technology can create enormous opportunities. But technology alone does not create value. Value arises in the encounter between people.

Values arise in the encounter between people.

Between the employee and the customer.
Between colleagues.
Between professional communities.
Between people who are given trust, responsibility and space to contribute.

Therefore, it is also interesting that so much of the public conversation about value creation is about capital, while far less is about the relationships that actually make value creation possible.

Because what is a business without people?

A store without employees who care about the customers.
A hospital without professionals.
A transport company without drivers.
A municipality without employees.
A technology company without developers.

We intuitively know this to be true, yet employees are often referred to primarily as costs in budgets and spreadsheets. Perhaps we should be talking more about employees as investments.

For many decades, research on leadership, organizational culture and service quality has shown how important people are for value creation.

The American researcher James Heskett and his colleagues behind the theory of *The Service-Profit Chain* documented the connection between employee satisfaction, customer satisfaction and profitability as early as the 1990s. When employees have good working conditions, trust and the opportunity to use their expertise, it creates better customer experiences. Better customer experiences create loyalty. And loyalty in turn creates long-term profitability.

Business leader and former SAS CEO Jan Carlzon described something of the same thing back in the 1980s at SAS. He highlighted that the company's most important moments occurred in the meeting between employee and customer – not in the boardroom.

We see the same thing again in modern research on innovation and organizational culture. Companies that succeed over time are often businesses where employees are allowed to contribute ideas, experiences and improvements. Innovation rarely happens only at the top of the organization. It often occurs closest to the customer.

Yet it seems that this part of value creation often ends up in the background.

We often praise great achievements, but less often the people who create them.

That doesn't mean that owners, management, or capital are unimportant. Quite the contrary. Good owners and good managers are essential. But the most long-term businesses often seem to understand something fundamental:

That people are not just a cost to be optimized. They are the very foundation of value creation. Perhaps that is why some businesses build strong cultures that last for decades, while others constantly have to fight for trust – both internally and externally.

Because customers notice the difference.

We notice it in the stores we return to.
We notice it in municipalities that function well.
We notice it when employees are given time to help.
We notice it when people are seen.

In an era where artificial intelligence, automation and digital solutions are rapidly changing society, this may become even more important.

Because the more technology we surround ourselves with, the more important the people who create security, understanding, trust and relationships become.

That's why this blog isn't primarily about technology.