A medium sized business has been in business for over 30 years. It has over 200 employees and operates on very thin margins. Small errors can cost lots of money and even the loss of lives.
The owner works long hours and deals with stressful situations on a daily basis. The owner is a man of character, dedicated to people and carries everyone’s mistakes on his own shoulders. He has an operations manager who has been loyal yet lacks formal management education. The operations manager constantly creates internal conflicts and makes poor decisions that end up costing lots of money. The operations manage has been with the company for over 10 years.
The people that work at the company have lots of experience in their field and a wealth of knowledge in their particular disciplines. Many of the people have observed the foolish decisions made by the operations manage and wonder why he remains and how he continues in his position. Yet many of the same people know they would lose if they questioned his authority or suggested he wasn’t capable of managing. So the people come to work and try to do their jobs even when constrained by foolish decisions and poor management practices.
The finances of this company have been on shaking ground for nearly ten years and continue to worsen over time. Yet banks, investors, customers, owners and employees continue to stay engaged. Why? Because no one has access to the whole story.
The Untold Story
The untold story about any company is the always the other half of the story.
Companies create narratives designed to put themselves in positions that serve their purpose. The narratives are crafted for different audiences. Banks and investors get a financial narrative; employees rarely get a narrative and customer get whatever narrative creates the most satisfaction whether true or not. In each of these narratives there are usually untold stories.
Much of the narrative for any audience during the 20th century has been kept in silos, managed with an agenda aimed at keeping the audience engaged regardless of whether or not they ought to have known the total story. The accounting games learned in the 20th century taught businesses how to set up subsidiaries, move expenses, revenues, capitalize losses and investments and the shuffle game continues in the 21st century. They used to call it cooking the books but that sounded criminal so now it’s called “creative accounting”.
The 21st Century is ushering in a 360 degree transparent view into any organization’s operations. No matter what the tangible financial picture is the market can now get a balanced view of any business simply by “listening to its stakeholders” and the intangible attributes.
Simply by listening anyone can determine how much intangible capital an organization has by hearing noises from the market of conversations. Conversations indicate levels of relationship capital, exhibit the depth of human capital, speak to the value created from strategic capital and witness the reach and scale of structural capital.
Intangible capital is the untold story that brings balance to any business story because it is in the narrative of human voices.