Why Companies Buy IC Services

In preparation for the launch of our new on-line course, Building Smarter Companies we sent out a survey to community members.  This is the first of three posts this week to address your questions and concerns:

One of the messages that came through loud and clear is that you want to understand why companies buy intangible capital (IC) services. Here's what we heard:

How do we make the value of IC services easy for clients to see and buy?

You're right to ask this question. Because if no one buys, all our theories remain just that.

I have the answer that's worked for me. It may surprise you. Because the TRUTH is that most clients don’t buy intangible capital consulting services (at least not yet!). I believe that some day, the kind of intangibles reports our community prepares will be as common as financial statements. But that’s not the case today.

Sounds like I’m trying to talk you out of buying our training right? No, it’s really valuable and it absolutely will help you deliver the results your clients are looking for. What I’m trying to say to you is that most clients buy results. Your IC expertise can help you get a job. But clients don't pay for ideas. They pay for results.

When you set out to sell IC services, there are basically two kinds of results your clients will buy: building a better organization and telling better stories. Today, I want to illustrate these reasons using some real-life examples of companies that did buy the Smarter Companies Process (SCP):

Result Category 1: Building a Better Organization – The SCP provides visualizations and measures of the full intangible capital portfolio of an organization. The measures create actionable priorities about how to move forward to help the organization meet its goals. Here are examples of some clients who were buying a better future when they bought SCP:

To grow revenues – Ted and Jim are the founders of a tech firm. They had a period of high growth but revenues had stalled and they couldn’t put their finger on the causes. They used the SCP to identify the opportunities for and barriers to growth. The findings made it clear what needed to be done and they got down to work, generating 27% growth over the next 18 months.

To scale and build value - Kathy is the CEO of a healthcare staffing company. She had owned the company for a number of years and wanted to make sure she would be able to sell it at a good price when she was ready to retire. The SCP identified opportunities for making her company more scalable and to fuel growth. The report prompted a major upgrade of their processes to get everyone using the same steps and the same data. It made a huge difference in scalability and performance---their success or failure no longer depended on every employee showing up to work every day. She hasn’t sold yet but she has created a much more sustainable, scalable company that is less dependent on her as the CEO.

Reason 2: Telling a Better Story – The output of the SCP also helps an organization tell its story. Most of the intangibles are invisible so their value and strength ends up being interpreted differently by different people. The goal is to control the conversation and tell a more concrete, clear and powerful story to different kinds of stakeholders. Here are examples of some clients who were buying a more effective story when they bought SCP:

To a bank - Tom is the CFO of a maturing software company. They had been around for a decade and had good financial results. But when they applied for a bank line, they were turned down. The bankers just didn’t feel they understood the company well enough to ensure that the company was viable for the long term. He used his IC report to supplement his business plan and got the financing he sought.

To a board - Pat is the Director of one of the key divisions of a large family services non-profit. The organization had a new CEO who was launching a reorganization. Pat needed to have everyone aligned in order to ensure the success of the new strategy. The SCP identified areas of strength and weaknesses. She and her project team were thrilled to have concrete measures that validated to the organization’s board the need for additional investments in intangibles infrastructure.

To an acquirer – Bart was the founder of a software company that was positioning itself for sale. A lot of the value in the company hadn’t been realized yet so the financials didn’t tell the full story of the company’s potential. The SCP help provide specific data and metrics that made the intangibles more real and helped Bart get the price he was looking for.

In all these cases, IC tools and methodologies are a means to an end--driving results for your client.

Why Clients Will Buy From You?

Clients buy from you (or any consultant) because they believe that you will help deliver results--that there will be an ROI on your services. It’s the results that are primary in their thinking. Telling them you know about IC can help your case. But it’s not enough. You have to tell your own story about why and how you can deliver the results they are looking for

Every one of our current partner firms has a unique story. AKLOE in Chile has a strong process and engineering bent. i-innovate in South Africa focuses on KM and innovation. Innovation Places helps design high performing workplaces. TPA works in transfer pricing and valuation. Sense Consulting supports financial investments and economic development. OPL specializes in intellectual property and non-profits. Each of these firms sells the SCP in a different way. But they all use it as part of their consulting process because their clients all depend on intangibles to succeed.

You have your own unique skills and contacts, your own intangible capital. Your clients may be entrepreneurs or large companies or non-profits. You may be located just about anywhere around the globe. And your firm has its own unique story and offering. You’ll be able to use the stories and cases we share in the course and our on-line communities. But you’ll also create your own. And you’ll be able to build your business by delivering results for your clients.

In my next post, I'll explain how to lead your clients on a journey of self-discovery to identify and measure intangibles. It's actually a pretty simple process you can do in a few weeks. Stay tuned for that post and in the meantime, I’d really appreciate hearing any feedback or questions in the box below. Thanks, Mary Adams

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  • Innovation capacity or as I suggest Innovation Capital. Build that into the powerful story of what all the combined IC's can deliver by giving them a real focused attention.

    Here is my definition of Innovation Capital by the way and come and visit the site dedicted to building this innovation capital, recently overhauled and relating better to the need to get the message out there.


  • I like Vedran's point as well. Innovation capacity, strategic capacity - both are good. 

  • Really interesting point Vedran - I'll open a discussion stream about this issue....

  • Great stuff! I would also like to propose complementary approach to creating appetite for IC. In case of EU, some countries (such as Hungary) have included measures of Innovation Capacities as one of criteria when evaluating projects for EU and national grants and other co-financing programs. In other words, if we would be able to push this for IC, it would tremendously increase companies' appetite for use of IC measurement tools such as iCounts. This is a tough and risky approach, but it would bring high results. Do we have any experience or examples of similar approaches in the world?

  • Thanks for the thoughtful feedback Verna, Nick and Akeem. Great to hear from you!

  • I LOVE reason 2, telling a better story. This is especially valuable to companies that are seeking funding or partners. Although people know that building an ecosystem and viable value network is the key to business success, they have no idea how to really show the strength of their ecosystem - or to work a strategy for improvement. With IC they can demonstrate the foundation of both tangible and intangible value exchanges that get people engaged with the enterprise, from partners to customers and suppliers. Telling a better story about your company can bring solid results in the form of not only investment money but in building those all important relationships! Great post, Mary.

  • I think this is a great way of explaining the importance on intangibles in particular I like the emphasis on organizational value - especially for the business owner who may be considering either bringing in a new partner or retiring. These will help!

  • Thank you Mary for the insightful post, look forward to read more.We are finalising the assessment of a client's business model and judging by the result categories above the aim is to scale and build value for the business!

  • Thanks Paul! Would love to have your voice in our class discussions!

  • Ok Mary, you are really beginning to ramp up my curiosity, making me think for myself even more!

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