Maybe it’s just a coincidence but I received two messages today. One from a contact here in the Boston area. And another from Europe. I thought I would share the questions and my answers as a way to start a conversation about intangibles, intangibles measurement and “hard” business results. I would love to hear your thoughts....
Question 1: Is there any evidence that evaluators consider seriously the findings of an intangibles assessment in acquisitions or buying of shares? Can a company expect to benefit from having an intangibles assessment when talking to investors?
My answer: The evidence comes from what moves markets. Changes in financials move markets. But so do changes in management, company partnerships, failures of process, performance problems, lack of innovation. If a company wants to be judged just on the basis of its financials, then it should let the financials speak for themselves.
If there is an interest in telling a richer story, then a team has two choices: talk about the company or provide data about how and why the financials turn out the way they do. Our ICounts products, for example, provide hard third-party data about the performance of the kinds of changes described above. It's about controlling the conversation.
Question 2: What are the best stats (and supporting source reference) to support the following:
Answer: We don't know the answers. But we also don't know that answer to questions like:
Companies are actually complex systems. Questions like this are hard to answer whether you are talking about any aspect of their operations. This is why I advocate an approach that starts with creating a map of the system the company has built to deliver on its value proposition and purpose. For me, the more important questions are:
Ultimately, the answers to these questions will explain the impact of intangibles on the overall system driving profitability.
What do you think? Did I do the subject justice? What's missing? What’s your answer?