For those of us trained to think financially, we tend to think of the word “value” as a financial concept. As in, what is something “worth?” This is still a valid concept for intangibles. In fact, there are already well-established approaches to determining how much intangibles are “worth” using traditional valuation techniques. They are based on financial models and historical transaction data (where available),
Yet the most common questions I get about intangibles usually have the word “value” in them. And they are not asking about valuation. I think it’s because despite the fact the valuation is a valid concept for intangibles, there’s something more going on that people sense even if they don’t fully understand it.
It’s this: intangibles include and are directly connected to your value proposition, your culture and your relationship with customers, partners and all kinds of stakeholders. Except for the occasional banker or transaction professional, none of your stakeholders care about the “value” of your intangibles in the sense of their financial worth.
What your stakeholders care about is how you create value for them. If you create value for them, then your intangibles are valuable. How do you create value? Through problems solved, learning a better way to do things, engendering trust. By creating knowledge and/or connections that represent future potential for creating value. By ensuring that your organization is responsive and growing and sustainable, in all senses of the word.
If you need a valuation, by all means get one done. But if you want to understand how to build a better business, how to create a strong reputation, how to ensure that your business is around next year, then get your stakeholders to “value” your intangibles.
Intrigued? Check out our ICounts Tools. Learn how to identify, model and measure the intangibles that create value for your stakeholders.