When antimatter collides with matter the mass is converted into pure energy and so does the intangible when it collides with the substance. Everything in the universe is a substance. When intangible collides with the substance it turns it to Pure Energy. They are the results of collision between inert matter and dynamic Action   Accountability, Governance, Good Intentions, Confidence Measures, Responsibility, all are Intangible. They are not  'seen', just like running, sleeping, walking, idling etc. that are intangible elements. In fact a sentence cannot be formed without the intangible as this is the rudimentary verbal element that develops to form a stem and to the stem is added a personal ending so as to form a complete verb. 'Running' is intangible that one does not 'see', nevertheless when we say triple Olympic champion Usain Bolt set a new world record as he stormed to a stunning victory in the 100m at the World Championships in Berlin in 9.58 seconds, millions could 'see' it happening.

The Earth's atmosphere is thick enough that virtually no X-rays are able to penetrate from outer space all the way to the Earth's surface. Neither the atmosphere nor the x-ray one is able to 'see'. When the same x-ray is passed through a machine the result is not only seen but is also captured for verification. That is the power of intangible which is going to be seen, captured and made use of immensely in interpreting the dynamics of Governance.

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I like the anti-matter colliding with matter = pure energy analogy. I hope you don't mind if I use it (has it been published somewhere?). So I agree and reinforce intangibles need tangibles to create value. One and not the other cannot produce energy or value: or else the equation doesn't work. So why do we feel others ignore IC? Maybe we have become too highbrow about IC with our efforts to measure and account IC? Who knows?

I feel we, the IC community, continue debating the same arguments we started two decades ago while businesses have moved, changed, imploded, exploded, folded, boomed, disappeared and mushroomed. Yet we still wonder how to get IC on the Balance Sheet. Are we asking the wrong question? Maybe we should further examine the simple equation: Intangibles + Tangibles = Value. So the question then becomes how do we mobilize intangibles to interact with tangibles to create value? Trying to measure the output before we understand the input seems not the correct order.

Herein then lies the question: If we continue to work on old problems are we likely to find new answers?
Thanks. Please do visit my blog noted at the end of my reply. I have published the book that goes into detail about the intangible and its place in relation to the tangible field. The difference between what it was 20 years back and now is the good opportunity to exchange views on this matter and relentless attempts by Mary Adams to discuss the subject highlighting the importance of IC at the same time bringing out the lacunae in the system. So we should all be grateful to her. I give below my views that I sent to Mary [she was kind enough to send me a note encouraging the exchange] that should give a perspective and urgency of the questions you have raised:

Dear Mary,

My comments on "Process-driven reputation risk in supply chains"

This is in reference to the conference on "Process-driven reputation risk in supply chains" that you chaired and Scott Childers of Walt Disney Company and Robert P. Rittereiser of Zhi Verden were the main speakers. I had the pleasure of listening to the conference file that IAFS has made available as a complimentary sample. Whether that gives me any right to write my observation and comments I shall leave it to you and please do let me know.

My observation

I am strictly looking at the discussion on Intangible - quite an interesting discussion and at the same time difficult to co-relate with intangible. The difficulty arises on account of operating efficiency which is intangible, to operation per se which is not, as Scott has rightly observed in his theme "Making the connection between reputational resilience and supply chain processes." Bob also refers to the reputation being the primary aspect of operational efficiency that companies like Johnson & Johnson takes less of a hit during the time of crisis wondering at the same time whether one could have avoided the reputational risk that comes back and hurts. You have brought out the same analogy quoting a need for a reputation bank like a savings bank.

Both have pinpointed the need for enterprise reputation management and go beyond the firewall with a clear cut objective to look into all resources with 100% control of all issues. From fusing data and information an improved control system it is contented could pave way for significant cost reductions. Elimination of inefficiencies and mitigation of risks were the objective noted in the process of integration of information over the next 5 years.

My comments:

Today I tweeted this message:

Intangible like Sun has 2 planets revolving - Ethical & Fiscal Responsibility. ER doesn't have a moon whereas FR has 4 moons.

Planet ER is d exclusive domain of People. 4 moons of Planet FR are: Tech, Man.Force, Op. Force and Finance. Finance has 1 moon of its own.

The 1 moon of Finance is the Balance Sheet. That Balance Sheet tries to tell that Intangible the Sun is contained in it.

This is my mission of intangible to release it from being bottled up in a vacuum inside a Balance Sheet. A supply chain process could be identical between two organizations but yet one could have a better operating efficiency than the other which becomes the basis of building reputation that grows day-by-day. Supply chain process can be replicated by another but operating efficiency is difficult to be replicated. It shall not be replicated as each has its own independence of owning and executing the operating efficiency, but comparability between one and the other would provide a good basis of measuring intangible practices between many. Comparability is the result of engaging in measurement of intangible.

In order to maximize the operating efficiency, first and foremost is to remove intangible asset from the Balance Sheet. IAS 38 had done a great damage in bringing Intangible Asset as part of the Balance Sheet making IAS 9 redundant. I am a Chartered Accountant, yet am keen on pulling out the IAS 38 without any other tinkered standards to its original avatar IAS 9. This will open up the recognition of intangible in its pure form that otherwise would find impossible to enter into the Balance Sheet, e.g. reputation.

In order to eliminate the inefficiencies each and every process system of corporate should ever take into consideration the two planets ER & FR simultaneously. BP or Lehman brothers lost their reputation having ignored ER. If a goal is set, then the goal should have both the planets taken into consideration. You will notice the moon of Finance, Balance Sheet is relegated to a non-entity as it is only an output of the financial operations. The output of Intangible is entirely different document which is Accountability. If there is a goal set with any one of the 5 entities absent then it is not worth setting a goal, as Accountability by each of the 5 entities revolving the Intangible is significant. Intangible is the nucleus of the entire gamut of Governance.

The Prism project [1] report contends that at the firm level, a holistic business reporting model is required that unifies and integrates the fragmented array of models currently promoted by the different stakeholder interest groups. Attention is needed to tackle the long-overdue reform of the measurement protocols for R&D investment in services. Bob also indicates that in the next 5 years there would be a significant progress be made in this direction. I feel it is imminent as to the change to be effected on Intangible and need to be implemented without further delay. I have no hesitation to inform you of my book that addresses all the issues deliberated in your conference as well my suggestions herein. You are welcome to get in touch with me.

1Report of Research Findings and Policy Recommendations, Clark Eustace: [prism-project-report-of-research-findings-andpolicy-recommendations.pdf] May 2003

Jayaraman Rajah Iyer
Kodaikanal, India
5th November 2010

+919487390439
skype: jayaramankodai
Twitter: @jayaribcm
Author of Inactivity Based Cost Management: Measurement of Intangible: Governance, Ethical & Fiscal responsibility and Accountability.
http://jayaribcm.wordpress.com/

PS I am happy to tell you KPMG LLP USA tweeted that they follow me. It is an opportune moment to collectively bring about a. Prism Report's view of a holistic reporting model and b. establish IESB - International Ethical Standards Board. I request you and this forum to look into this and would appreciate linking to any good university in US who is ready to go with me on this project.

Jaya- The What Works in IC is now a formal academic study. We would love to have your stories in the study.

To do this, just go the What Works in IC and click START SURVEY at the end of the text box.

Thanks!  Mary

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