Tiger Woods and Intangibles

Yesterday in the New York Times, Frank Rich called for making Tiger Woods, Person of the Year. Rich said

What’s striking instead is the Enron-sized gap between this golfer’s public image as a paragon of businesslike discipline and focus and the maniacally reckless life we now know he led. What’s equally striking, if not shocking, is that the American establishment and news media – all of it, not just golf writers or celebrity tabloids – fell for the Woods myth as hard as any fan and actively helped sustain and enhance it.

Enron and Tiger Woods. He got me there. I couldn’t resist despite all that has been written about Tiger, as we all had come to call him.

You see, in both cases, we saw success in one sphere and assumed success in all others.

Enron delivered amazing growth and returns. The true story was hidden off balance sheet but the assumption was made that the level of success they showed on the bottom line meant that they were doing everything else right.

With Tiger, we saw amazing self control, discipline and performance on the golf course and assumed that the rest of his life was equally admirable.

We make the same mistake with businesses of all kinds today.

The shift to a knowledge economy is so far along that investment, value and performance are already highly dependent on knowledge-based intangibles like people, systems and networks. Yet the financial information we use for investing and managing almost completely ignores intangibles. So a company can look great on the financials and still be dead or dying on the intangible capital side. The reverse also happens. A company can look bad on the financials because it is investing in intangibles that will ensure a strong future.

It’s time for this to end. We are going to do our darnest to make 2010 the year of intangibles. Watch for lots of activity in the new year and stay in touch to be part of it!