Intangible Capital Case Study: Beyond Intuition to Objective Measurement of Intangibles

June 24, 2011 by · Comments Off 

Most people assume that you cannot measure intangible capital (IC). But it is very possible and also very powerful.

The starting point that we recommend in Intangible Capital is a high-level inventory of your unique intangibles.

Once you have an inventory, there are lots of ways to pursue measurement. We like to start with an IC Value Drivers Assessment. This gives an overview of the unique IC of the organization as well as those that are common in all companies. The areas of examination fall into 10 categories: Read more

Delivering on Bernanke’s call to measure intangible capital

May 31, 2011 by · Comments Off 

In my last post, I shared Fed Chairman Ben Bernanke’s call for “better ways to measure innovation, R&D activity, and intangible capital.” What better way than this statement to kick off the next two half-day discussions at the New Building Blocks for Jobs and Economic Growth conference?

So, after the opening plenary, the group did get down to the work of identifying next steps for business and policy. On the Steering Committee, we spent a lot of time trying to design a conference that engaged and tapped into the amazing wisdom of the attendees—experts from all over the world in intangibles and innovation. We were helped by great facilitators (and artists) from Collective Next from Boston.

I introduced and helped moderate one of the four discussion areas: Emerging Measures. I introduced a paper by Ken Jarboe that I had contributed to. Here’s how we framed the discussion Read more

The New Accounting

November 2, 2010 by · 2 Comments 

The accepted wisdom inside the IC world is that we should ignore accounting and accountants—they will never “understand” what we are doing. I went along with that for a number of years, accepting the view of many that IC is special, it cannot be truly measured, that it must be appreciated.

Well, I am way beyond that now. And I feel that the only course of action is to talk very explicitly about the link between accounting and the group of knowledge assets known as intangible capital.

Once you have come to understand your business as a knowledge factory and understand the management implications of this new operating model, you are find yourself needing an intangibles information set. The information set you will need is not that different from the set you would use to operate a tangible factory. You just need to learn some new techniques for generating it. Read more

Case Study: Visualizing and Communicating Corporate Value Through Intangibles Management

March 29, 2010 by · 2 Comments 

Last week, I helped lead a full afternoon workshop organized by the Intangible Asset Finance Society at the Think Tank and Auction hosted last week by ICAP Ocean Tomo in San Francisco. (The auction was fun to watch–here are a few Tweets about the auction).

My co-presenters for the afternoon were Nir Kossovsky of Steel City Re and Andy Gibbs of CXO IP Advisory. We opened up by each making some comments about our perspectives on intangibles management and emerging intangibles markets. My slides are here–I will add links to Nir and Andy’s presentations if they are posted online.

Then we moved to a case study discussion. The discussion was very robust. Since we usually cannot share the contents of client work when we engage in this kind of exercise, it is a great opportunity to share with you how this kind of approach works in practice.

Here’s a summary of the case we gave the participants. Read more

Intangibles Measurement II: Investment

August 14, 2009 by · 6 Comments 

moneyHere’s the next installment in my intangibles measurement series. I always warn folks that this the most radical of the three types of intangible measurement, although it shouldn’t be.

Today, any money you spend on building intangibles gets expensed. Even if you are investing money to build something you expect your company to use for many years to come. This means that most of the money spent on developing internal knowledge systems, operational processes and even relationships with key partners is treated as a direct operating expense on the income statement in the year that you make the investment.

There are a lot of valid accounting reasons why this is the case. I’m not out to change accounting. But I  focus on helping companies make better decisions to grow and improve performance. And the secret to that, except when my clients are buying a new machine (which isn’t that common), is to invest in intangibles like process, IP, people and networks.

So here’s my radical proposal: keep track of how much you are investing in intangibles every year. Read more

The State of Intangibles Measurement – KPI’s Are An Imperfect Answer

June 19, 2009 by · 1 Comment 

control-panelIn the industrial economy, we had lots of ways of measuring our work. It was a mostly physical process so we could literally see what was going on. Our financial systems were built around this industrial model and we could also put dollar values on products as they progressed through factories and machines, converting raw materials into finished goods.

The shift to a knowledge economy has changed that. A lot of the value created today happens inside peoples’ heads or their computers. This is the case in service and technology businesses but even in manufacturing settings where it is the process, not the product, that creates so much of the value. Read more

2009 the Year of Measurement?

January 16, 2009 by · 1 Comment 

Jonathan Salem Baskin posted a report on a session he hosted at the Consumer Electronics Show. I met Jonathan at the Intangible Asset Finance Society (IAFS) and had some interesting conversations around branding and the value of brands (his area of expertise). The three main conclusions of the session Read more