Michael D. Moberly November 9, 2009
I have yet to find a company that does not want to survive this recession. While that statement is self-evident and may sound literally obsurd to most, similarly, I’ve come across countless companies and management teams who have yet to fully realize that perhaps the key, to sustaining, even strengthening their business in this recession, is to understand their cheese has been moved.
For those unfamiliar with this notion, a very brief, but reflective book by Spencer Johnson titled ‘Who Moved My Cheese’ may be worthy of the 30 minutes it requires to read.
The ‘cheese that’s been moved’ in this instance, are company’s tangible assets! That is, for a vast majority of company’s (their) tangible (physical) assets, i.e., property, buildings, equipment, inventory, etc., have been permanantly moved. Tangible assets no longer, as they did in previous decades, represent the dominant drivers or sources of most company’s value, revenue, and/or foundations (building blocks) for future growth, wealth creation, and sustainability.
Instead, for most company’s, their primary sources of value and revenue have irreversibly transitioned, in the increasingly ‘knowledge-based’ economy, to intangible assets. Intangible assets include such (intangible) things as brand, reputation, image, intellectual property, employee intellectual-human capital, and internal/external relationships, etc. (For a comprehensive list of intangible assets see http://kpstrat.com and ‘click on’ brochure and scroll to ‘what are intangible assets’.)
If you elect to read Johnson’s book, one suggestion to make the concept of ‘who moved my cheese’ more palatable and relevant to business decision makers and management teams, is to substitute the words ‘tangible’ or ‘intangible assets’ every time the word ‘cheese’ appears in the (book’s) narrative. This will help the reader identify with intangible assets and the importance of recognizing their (individual, collective) role and contribution to company value, revenue, and sustainability.
To bring further clarity to this point, I recently I attended a gathering of entrepreneurs. The keynote speaker was a well known and highly successful area restauranteer. For those listening carefully to the 30 minute presentation, at least 20 minutes included the speakers’ obviously heart felt and experienced sense of the internal culture that underpins the sustained success of this 35+ restaurant enterprise. Without exception, each of the factors the speaker addressed (including the internal culture) as contributing to building and maintaining this company’s success (even during the current recession, and the ever broadening competitive dine out market space) were, in fact, intangible assets!
Interestingly however, the words ‘intangible assets’ were never uttered during the presentation, nor in the Q&A that followed, to contexualize this restauranteer’s success. Clearly, another instance of c-suites’ genuinely needing to know how they and their company should best react ‘when their cheese is moved’. That is, its an economic fact – business reality that 65+% of most company’s value, sources of revenue, and foundations for future wealth creation today lie in – are directly related to their intangible assets, not their tangible assets. To be sure, that is the case for restaurants.
For those dedicated to elevating awareness, alertness, and accountability for intangible assets throughout the business and financial community, the process often starts with management teams literally acknowledging (verbalizing their) success and profitability is routinely attributed to, in large measure, by the effective and sustained utilization of intangible assets, i.e., development, execution, delivery, quality assurance, etc.