Company Culture Valuable Intangible Asset

Michael D. Moberly May 20, 2016 ‘A blog where attention span really matters’!

A company’s culture, and its management, are two of many ‘intangibles’ that play increasingly pivotal roles in – contributions to (company) performance, retention, and sustainability, among other things. The credibility-validity of this perspective lie in the findings of numerous studies/surveys commissioned-undertaken by professional associations and academia not unlike a Society for Human Resource Management (SHRM), survey, circa 2012, which asked HR (human resource) leaders to identify significant ‘workforce management and staffing challenges’, which 770 respondents identified…

• employee engagement
• employee retention
• effective performance management
• employee recruitment, and
• company culture management

To some, this survey example, may appear dated, especially if considered in the context of today’s increasingly entrepreneurial and go fast, go hard, go global business environment. To be sure, the commonality of findings, replicated – validated through numerous other studies/surveys and, whether taken individually or collectively, are indeed instructive. Preferably, they have and will continue to influence business leaders and management teams to conclude that devoting time, energy, and yes, some resources to developing and sustaining a relevant-intelligent (company) culture will deliver measurable positive returns. So, no rocket science here, a company (sector relevant) culture is a prized and measurable achievement and powerful contributor to performance, competitiveness, value, and, of course, brand.

A company culture…whereby employees, management teams, c-suites, and boards alike, are collectively committed to sustaining a principled base of intellectual, structural, relationship, and competitive capital ala IA’s (intangible assets).

This reality manifests in the economic fact that 80+% of most company’s value, sources of revenue, and ‘building blocks’ for growth, profitability, and sustainability today lie in – evolve directly from IA’s, of which company culture is a potent example. It’s certainly not a stretch then for experienced business leaders to also conclude that a principled and consistent company culture can, and frequently does, serve as a catalyst for internalizing and enhancing other IA’s among them being, employee engagement, retention, performance, as well as attracting – recruiting new employees.

What is a company culture…?
Based on the fine work of Dr. Edgar Schein, a company culture consists of progressive stages that observably emerge, that is, if one looks for them, i.e.,

• employees (collectively) recognize and begin to act on a shared system of values, norms, beliefs, and attitudes that defines and clarifies what is important.

• employees at all levels recognize they learn as they’re solving problems and, if the problem solving methodologies work well enough, employees will consider them valid and worthy of being taught and passed along to new employees, because…

• they represent the correct way to perceive, think, and feel in relation to addressing (internal, external) problems that their company routinely face, which, in turn, leads to efficiencies, competitive advantages, and reputational value, etc. (Adapted by Michael D. Moberly from the work of Dr. Edgar Shein)

For most companies, the initial step in developing a principled company culture involves…

• determining what attitudes and beliefs need to (should) be established, and

• having a clear understanding how those attitudes and beliefs can translate (become operational) as sector-business relevant behaviors on an enterprise-wide basis.

Transferability of company culture…
As aptly pointed out by Dr. Kenan Jarboe in his Athena Alliance monograph appropriately titled ‘Intangible Asset Monetization: The Promise and the Reality’, there are six factors considered by financial markets (i.e., asset buyers, sellers, and investors) with respect to determining the ‘suitability’ of an (intangible) asset. Of those six factors, one is an assets’ transferability. In other words, is a ‘company’s culture transferrable? Or is it so (company, business unit) specific that would make its replication and/or sustainability challenging should any base changes occur?

Unfortunately, the contributory value of a company culture seldom, if ever, appears on management teams’ conventional mba oriented dashboards, in part, I believe, because those dashboards remain largely focused on tangible (physical) assets vs. intangible (non-physical) assets, i.e., company culture.

Too, for some management teams, c-suites, and boards, a principled company culture, remains somewhat of a managerial, financial, and competitive advantage mystery in terms of understanding how best to utilize – exploit this increasingly influential and catalystic asset.

A much desired objective of course, is to build a resilient, self-perpetuating, and principled company culture that is readily scalable and supports development-acquisition of intellectual structural, relationship, and creative capital to consistently deliver measurable performance and returns.

Of course, building a principled company culture today, is seldom something which evolves exclusively in a top-down fashion and as such, it is seldom a characteristic wholly owned and executed by a management team or c-suite. Instead, a well-grounded and principled company culture provides permanence, depth, and confidence among employees and their abilities. (Jennifer King, Software Advice Blog)


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