As we move into a new year and prepare businesses plans and budgets for 2016, many are finding it hard to get inspired about the next few years. Deciding where and how to focus resources isn’t much fun in this environment. The words speak for themselves, who likes to freeze or cut, ouch! Gardener’s out there know, you can only do so much freezing and cutting before you lose the plant.
Talk today is about the struggle to acquire capital, the difficulty of finding critical talent, and survival tactics vs future growth. Like many of you, I’ve personally heard enough about the doom and gloom future.
So here is some good news. Business already owns the key to improved efficiencies, productivity, costs of poor quality, higher sales and ultimately future growth and profitability. And there is no better time to put that key into the lock and open the door. It’s time to unlock the true value of your intangible assets. Why? So you can maximize the hard tangibles you’ve already invested in.
When asked “What assets does your business have?” Most would easily answer; buildings, equipment, inventory, etc. However, many leaders forget about the assets that don’t show up on the balance sheet, their intangible assets. In all cases these forgotten assets can account for as much as 75% of a company’s market capitalization. This is why the most successful senior leadership teams put as much focus on managing their intangible assets, as their tangible ones.
Investing in intangibles like strategy, organizational design and human resources, is based on the same principle as investing in tangible assets. It means you are investing in the future value of your company.
The similarities continue when it comes to approach. When looking at Intangibles, focus initially on the current situation. What’s happening today in respect to effectiveness and utilization? When you’ve got a handle on that, the organization must then ask itself. Will what we do today, serve us in the future 3-8 years from now?
One objection many people have when it comes to investing in intangible assets, is intangibles don’t, at face value, appear to be secure investments. There is nothing tangible like a new piece of equipment or building to point to. You can’t show shareholders and board members a picture of your new performance management and coaching system, or your new leadership alignment and feedback process. But it is these very things that will show them increased dividends. And who doesn’t like the look of that picture?
It is new or improved processes and new behaviors that will make those tangibles you’ve already invested in and can point to – work better. Although you can’t see hot air, it is really critical to making the hot air balloon experience so much better.
What’s next? The first step to get the most out of your intangibles is straightforward. Design Key Performance Indicators for each of the four Intangible assets. Then lead, measure and reward the behaviors needed to achieve desired results. To make the most of this downturn and ensure strength in years to come, remember, you’ve got the key.