From IC to IR: Why I’m expanding my focus


If you have talked to me for any length of time about what I do, chances are I’ve quoted the story about the Blind Men and the Elephant. It’s because it’s a clear way to explain the challenge of measuring and managing business today when all the critical pieces of a business are literally invisible and/or not included in traditional financial reporting.


Why am I trotting this out yet again? It’s because I want to go on the record saying that I feel like one of blind men in the poem. You see, I’ve been talking about helping people see the full picture but I’ve still only been talking about part of the elephant.


What’s changed? I’ve had more people from the sustainability movement approaching me to talk about intangibles. And I’ve been spending more time getting to know the ideas and people in the integrated reporting movement. Essentially, integrated reporting is trying to unite at least three perspectives: traditional accounting, sustainability and intangible capital.


For those of you who have shared my interest in intangible capital, you’ll see that this new uber framework largely includes the IC perspective.* But it adds natural capital and more explicitly includes traditional accounting. As it should. Maybe as we should have. That’s why I decided to bring up the elephant. As much as I talked in the past about seeing the whole elephant, I was still leaving out part of it.


So what does this mean for Smarter-Companies? Well, everything and nothing changes. 100% of what we have been doing is applicable in the integrated framework. We’ve already added natural capital to our open source value creation worksheet. We also included it in our ValueRabbit measurement platform.


But I am spending more time learning and sharing with a whole new group of people. I’m going to be on a panel at a Skytop Strategies program next week on Integrated Thinking. I’m going to the first ever Integrated Reporting Convention in London the week after that. And will probably spend time with the incredibly diverse group at Sustainatopia in Boston before Thanksgiving.


As always, I promise to share what I learn and look forward to conversations about how to use good ideas and good practice to build healthier companies and communities. Let me know what you think!

*For those of us from the IC world, I feel the need to acknowledge your confusion. For us, IC has always been human, relationship and organizational/structural capital. The IIRC uses the phrase “Intellectual Capital” to describe just the third capital in our traditional framework, owned knowledge in its many forms. But we have too much to contribute to the conversation to get hung up on this. Let’s get busy and share what we know to advance what is, after all, the right cause.

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Comment by William Miller on November 3, 2015 at 9:28am

Mary,

Good move - expanding scope to include IR. Next move - show how the even greater expanded scope of innovation connects to your framework containing IR and IC because the input/output model in IR is driven by a process for innovation that is part of innovation management that creates future free cash flow ( valuation). Businesses want to see the link between valuation, innovation management and IR/IC.

 I will look forward to your reporting on the IR conference.

Best,

Bill

 

Comment by Paul Hobcraft on November 3, 2015 at 6:19am

Mary, it makes 'complete' sense. Different people do have DISTINCTLY different perceptions of the same thing

The more you integrate the greater the chance we all move forward

Best wishes on the move

Paul

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