measurement (3)

Three things that make a company smarter


We spend a lot of time in this community talking about how to make companies smarter and more successful. But a few weeks ago, I realized that we have never really defined what we mean by "smarter companies." The answers are complex and rich and something we all need to continue to define. 

But as I thought about it, I came down to three key characteristics that shine through:

Intangibles Focus – Knowledge intangibles are at the core of how value is created in today’s economy. This includes the knowledge in peoples’ heads and in re-usable forms (process, software, data, designs, etc.). Companies that recognize the growing importance of knowledge in these many forms have moved beyond industrial-era approaches to management and measurement so they can focus on the knowledge that can give them a competitive advantage.

Sense of Purpose – Access to and use of knowledge is a collaborative, collective effort. The amount of knowledge available to an organization—and the value it can create—is directly related to its ability to attract employees, partners and customers who share its mission. Purpose involves elements of both profit and prosperity. Companies that recognize the relationship between attraction and collaboration embed this purpose in what they do, how they do it, and how they tell their story. 

Social Measurement – Traditional financial and quantitative approaches fall short in measuring the strength and performance of knowledge, collaboration and innovation. The use of social, qualitative measures is on the rise. It’s already used commonly for knowledge products like books, services like hotels and restaurants, and even for employers. Companies that recognize the importance of intangibles, attraction and collaboration spend time listening from the outside-in, not just measuring from the inside-out. They are turning measurement into a collaborative, social process.

Does this list speak to you? I welcome your feedback!

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The Whole Story

The ICounts Graphs tell the story of a company in a succinct way. Here’s the story of what one company discovered through this assessment process (see note below).

Profile: Software and services company in the healthcare space

Why they undertook the assessment: The company had grown consistently over its ten-year history. But growth had stalled and they had just been turned down for a new credit line. They wanted to jumpstart growth in a way that would build long-term value. They also wanted to be able to tell their story to external financial players (banks, investors, acquirers)

ICounts Graphs assessment: The Graphs process started by identifying the core intangible capital with which the company creates value for its customers—and generates revenue and profits. Then each IC element was measured via interviews with stakeholders, including management, employees, customers, suppliers and external experts. The findings were delivered in a detailed report including rating data as well as stakeholder comments.


What the external view told them: The external view was really exciting for this team. There had been little staff turnover during the ten years since founding with the original team augmented by strategic hires over time. To have such high above-average scores validated a lot of their hard work. But how to leverage this going forward?

10468394464?profile=originalWhat the internal view told them: The internal view made it clear that their software was by far their greatest strength, a wonderful foundation for future growth. But the processes for marketing and selling the software were inconsistent and uneven, leading to a weak brand. They were also held back by weak external partnerships. In an industry where a hospital may have up to 50 software packages running from different vendors, inability of a software company to partner can be an issue.


What the action view told them: The action view led to several key initiatives: a new website, reorganization of the sales team, a new high-end service offering to co-innovate with key clients around their emerging challenges and the creation of a project management offering (enabling the company to charge for its improved project management processes).

Results: Over the next two years, using their internal resources and selective external help, the company grew by 27%. They also used the Graphs report to help them get multiple offers from banks for their first credit line. They continue to build the value and success of the company.

Using a tool like the Graphs helps tell the whole story of a company in a simple but integrated way--and to use the information as a focus for future action. It gives a holistic view that’s hard to get with other traditional management and measurement tools. What's the whole story of your company?

For more information, read the papers at Optimizing Intangibles or read about the ICounts Graphs.

Note: These are profiles and results of real companies. The names and certain characteristics have been changed to protect the identify of the company and to ensure that no confidential client information is revealed.

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