I strongly believe that many values can be created after measuring, monitoring and improving intangibles. But I think that there is a missing part in this chain. Before measuring the intangibles, it is important to identify and prioritize those intangibles that are relevant to the organization. Maybe, there would be some intangibles, that if the organization changes or adapts, would not create value or even could create negative value (passives). Moreover, if the organization changes those intangibles that are relevant, such as critical process, then the consequences could be a positive value creation. So, depending on the intangible to measure and change would be the creation/destruction of value.
Finally, it is important to identify which is the value created; that could be from the trivial and easy-way of money to other complex non-monetary such as brand reputation or agents networking.
All my best,
With intangibles becoming such a big part of a business's value it is imperative that systems be put in place for management to make improvements. There is no limit to the value that can be created by improving the value of Intangible assets.
Applying the old rule, "you can't manage improvements if you don't measure them", to intangibles should be a no-brainer as step 2. (Step 1 is to first identify and value the intangible assets of the business. More on that later.) That means whatever inputs we use to identify and value the various intangible assets, we should periodically measure and report changes for those inputs.
Let's put our heads together to develop a system of reporting changes in the inputs that measure Intangible assets. The approach for identifying and valuing intangibles found in Mary Adams' book, "Intangible Capital", is a good place to start.
Thanks for the plug Martin! One of the challenges I see is that each company has a different set of intangibles. That's why we take the approach of starting with an inventory. I hope that some day companies start measuring investments in all the items in the inventory. But assessments like the ICounts Graph are also very powerful and they are much easier to do.
Intangible capital is powered-up by what we call intellectual equity (IE) This is a very volatile resource and sometimes organisations over invest in it and at other times they under invest in it. Optimising the ideal intellectual equity (IE) resource capability between business environmental challenges and efficient and effective business internal capabiliies and capacities is the key to engendering higher levels of intangible capital. Good investors are skilled in identifying top managements ability to maintain this optimum dynamic condition and will invest in their company. There is article number 9 on the website at www.corporateuniversity.org.uk 'go to Bookshop' that illustrates these dynamics of the IE relationship. For interest - We have also recently completed a quantum performance management process that also helps to get the optimum condition in place. Hope you like it. Best regards, Richard. Chair at G-ACUA