Let's Create Value....it's the time of the INTANGIBLES

"The intangible represents the real power of the universe.  It is the seed of the tangible."  --Bruce Lee

Another year and another perspective of effective leadership.  Value creation, the leadership optic for 2018.  How do you add value: what value does your brand represent, how are your talents creating a valuable contribution, where do you create the most value in your organization?  These are some of the questions being asked of today’s talent.

Back in 2011 in an HBR article, "What is the theory of your firm" by Todd Zenger, the term value creation was defined as a process where “leaders must draw from available knowledge and prior experience to develop a cognitive, theoretical model of the landscape and then make an educated guess about where to find valuable configurations of capabilities, activities, and resources.”  In 2018, this would be considered a mouthful of words that would have little meaning to most leaders.  In the last 7 years, business transformed.  We have now simplified leadership to its basic core: What sets you aside from others in terms of the value you create [for your company]?

 To be effective in creating value, you must have a strategy. Most of us discuss strategies in terms of tangible effects.  Let’s talk intangible strategy.   Do you know what your highest performing talents are and do you know how to best apply those talents to get the greatest output?  While these may seem like simple questions, often this is where strategy conversations fail to go.  Let’s redefine the norm and discuss strategies in terms of intangible value versus tangible value. 

Generally, today’s professional environment has become more knowledge and service based. Consequently, it is becoming harder to measure, or to know what to measure and understanding what is actually driving up value. In a study done in 1998, 80 percent of corporate value was associated with intangibles and only 20 percent with tangibles (Sullivan, 2000).  There continues to be a shift toward measuring intangibles.

What are intangibles?  Innovation, quality, customer relations, management capabilities, alliances, technology, brand value, employee relations, environmental and community issues are examples of intangibles that some are currently measuring. Cap Gemini Ernst & Young (CGEY)’s studies have found that the one critically important dimension to gauge the promise and success of new business ventures is the underlying base of a company’s intangible assets.

Service was once a term used for companies that perform a service to the public.  Today, we measure service at every level in our organizations despite whether a person ever has interaction with the public.  Every level and every position in every company performs a service that impacts someone or something or that position would fail to exist.  With this mindset, it is easy to understand how important the intangibles could be to an organization’s health.

Each year my team and I measure all kinds of data.  How fast do we complete projects, how fast do we return phone calls, how flexible are we with redirecting energy to the newest thing of importance, what do our business partners think of our service, etc. The last one, what do our business partners think of our service is key.  The other points of data help us stay on track to deliver the highest level of intangible service,  however, it all comes down to how well are we interconnected to others and do those others believe we are delivering exceptional intangible service.  

Sending out a survey is easy, yet getting the results you desire on that survey is not.  Surveys on service level satisfaction should be used to obtain results that measure meaningful service satisfaction and, yes, it requires subjective input.  Subjectivity can be scary because we never really know how someone feels unless you ask them.  The scariest part is you might get a response that is not expected or in alignment with your own view of yourself. 

As a society are getting back into the soft skills.  Measuring intangibles consist of many variables that we cannot control. And this brings up a whole new emphasis on leadership vernacular.  Paradigms, trust, reputation, consistency, energy, integrity and humility are some of the terms that now factor into the equation for successful strategy outcomes and these intangibles are used to measure how well you are doing.

The old system where the person who is overly confident and gets things done through tangible measures wins out over the others is a fading model.  Sure, doing a lot is good….but remember the intangibles are what will sustain your success.  Balancing competence and humility will win out every time.  How do you add value?  

Next time you want to race your colleagues to the finish line….remember this quote…

"If you want to go fast, go along.  If you want to go far, go together." --African proverb