The ABCs of Intangibles Assessment

Assessment is a word that you are probably used to hearing in relationship with tools in the human resources area. Myers-Briggs and DiSC are two well-known tools that are used to assess the personality of people. Most people in business today can tell you the letters of their own Myers Briggs type. Another kind of assessment, 360° reviews, are used to get feedback on a manager from all sides, that is, those that work at a more senior level, as peers or as subordinates.

Over time, many of these tools have been refined and evaluated for statistical significance. The idea is to use a series of questions that indicate what’s going on inside a person’s head, how they work and interact with others. Because the output is delivered in the same way for each assessment, they become comparable across individuals and/or teams. The knowledge gained through an assessment like this helps create a starting point for change and improvement.

An assessment of your knowledge factory is more complex than the analysis of a single person but many of the same principles apply. Read more

Five Reasons Your Organization Should Assess Its Intangibles

In posts over the past weeks, I have already shown you some simple but powerful ways of generating concrete information about your intangibles. The first is generating an inventory of key knowledge assets. The second is building a graphic or model that serves as a shared visualization of how your company combines and monetizes those assets in your knowledge factory. And the third is to start tracking your annual intangible capital expenditure.

But is it enough to just know how much money has been spent? Isn’t it also important to know whether your investment is working as well as you expected? Is it ready to handle your future challenges? Is your knowledge factory working up to its capacity? How do you know if your knowledge factory is functioning the way it should? Are these not the important questions that need to be answered in your business?
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It’s Time for a Knowledge Economy Balance Sheet

The traditional balance sheet is one of the key financial statements produced by every business. It records all the physical assets owned by a company as of a certain date. It also records monetary liabilities and the equity of the corporation. Together, these two sides of a balance sheet served for centuries to demonstrate the health of an organization by reporting the amount of investment the organization makes in its productive capacity as well as the kind and mix of its assets and liabilities.

But today, the average balance sheet explains only 20% of the value of a company. This is due to the growing importance of knowledge assets which usually are not included on the traditional balance sheet. Read more

Shedding Light on the Value and Performance of Intangible Capital

The first thing that most people ask when discussing intangibles is value. My answer is, “how can you value something for which you have no data?”

I do not mean to imply that it is impossible to develop data on your intangible capital. It’s just that most companies have not taken the necessary steps to accomplish this. How can you create a sound data set on your intangibles? Read more

Intangibles Measurement IV: Indicators and Performance Management

Here’s the next post in my intangibles measurement series. The last two posts have provided details on investment and assessment. This time, I am going to talk about the third kind of data: indicators.

Indicators and performance management are the most widely used forms of intangibles management today. This approach arose in direct response to the limitations of financial data in understanding the knowledge era business. Common approaches build a dashboard to show key performance indicators (KPI’s) of the company’s operations. Sometimes the dashboard is associated with a balance scorecard as well.

The idea is to identify data points that are leading indicators of strategic success and track them closely. Read more

Intangibles Measurement III: Assessment

Here’s the next post in my intangibles measurement series. In my last post, I made the case for measuring your annual investment in intangibles. Tracking how much you are spending is the logical starting point for measuring intangibles.

Once you understand how much you have spent, of course the next step is to ask whether you are getting your money’s worth. Is your investment giving you the results you expected? If you try to do this on a purely financial basis, you are going to reach a dead end very quickly. As explained in my last post, intangibles get very limited attention in today’s accounting paradigm.

That’s why assessment in your best bet for getting at intangible performance quickly and accurately. Read more