Intangible Capital makes up 80% of the value of the average business today. This is a complete shift from a few decades ago. Yet few companies do anything about this. Why? Because there’s no one on the org chart that’s in charge of IC.
Who should be in charge? Well, that’s part of the problem. As you can guess from the 80% number, IC includes a lot of different elements (all different forms of knowledge) as varied as people, customers, partnerships, processes, data, intellectual property, brands, culture and your business model. It touches on every strategic asset except for the tangibles (equipment and buildings) that you can see.
So the truth is that everyone should be in charge of part of your IC. From every line person who needs to learn and improve how they do things every day up to the CEO who takes ultimate responsibility for the IC. It can be helpful to break it down and think about how different people and functions (inside and outside of your business) affect your intangible capital management (ICM):
As this graphic shows, there’s a lot of work to do with your intangibles and a lot of people on the job. Ultimately, the CEO quarterbacks all this. And every manager plays a role. But realizing this still doesn’t help the organization see the full picture for its ICM. That’s why we now advocate the training of an ICountant, someone who is charged with some of the basic tasks that we take for granted with tangible assets but fail to do for intangibles:
- Creating an inventory of the key intangibles that your company has
- Helping develop a shared vision of how these intangibles work together to drive growth, value and performance in your operations
- Measuring the health and effectiveness of key intangibles
If I were talking about a factory or a warehouse full of inventory, you wouldn’t think twice about having someone do these basic tasks. But with intangibles, most companies don’t even have an inventory. Everyone helps build and manage intangibles. But you probably need an ICountant to help you keep track of how it’s going.
We have an ICountant training program starting in a few weeks. Let us know if you are interested in participating.