It has been said that intangibles are those invisible assets that can’t be measured. Yet the components of S&P 500 Market Value have shifted from 17% in 1975 to 81% in 2009 so one would assume someone is measuring something.
Digital technology has raised the bar on such things as reputation, brand awareness, communications, employee as well as customer relations along with many other intangibles that influence economies, society and organizational results.
What was once invisible is now visible because of the advancement of digital technology and whatever is visible becomes measurable. Much of what measures concerning intangible assets has been relevant to the influence the market perceptions of value created by those assets. What has been missing are tools for individual organizations to measure the influence of their own intangible assets on operating performance.
Mary Adams, CEO of Smarter Companies, has developed a three step ICounts Graphs process aimed at capturing relevant intangible data that enables measurement of subsequent organizational results influenced by the intangibles. ICounts are accounts designed to capture data to reflect the influence of intangible capital on organizational performance. The three step process includes:
1-Identify: The first step in the ICounts process is the identification of the key drivers of performance and growth in a company using the canvas below (these examples are adapted from a case study from a software and services company):
2. Measure: ICounts Graphs – Each of the items in the ICounts Canvas is measured via stakeholder interviews that address how the company compares with its peers. The data is distilled via the following views. These high level results are accompanied by a detailed analysis that shows data by question and by stakeholder group. The follow-on work from this report generally leads to strategic initiatives that drive growth, improve performance, increase corporate valuation and improve the company’s reputation.
3 – Optimize : These high level results are accompanied by a detailed analysis that shows data by question and by stakeholder group. The report makes it clear what the priorities need to be going forward to both mitigate risks and to capitalize on growth opportunities.
Smarter Companies will be offering case studies of different type organizations using this methodology and providing a series of different types of reports for anyone to study.
As digital technologies continue to have a greater influence over global economies, social developments and organizational change. As individual choices become more and more influenced by the intangibles their value will continue to grow. It is time we begin to measure the intangibles so business can think of them as tangible assets.
Get a free sample report here