Book Review: Intangible Capital

Intangible Capital is a book that seeks to create a new way of thinking about our businesses and how we operate them. Traditionally our businesses and how we organize them, even how we measure and report on them, have been based on labor and tangible capital (property, plant and equipment). That’s because traditionally these were the motive forces behind how firms differentiated and made money. Firms that managed their tangible assets and labor effectively made more money than those that didn’t.

But what if the situation changed and tangible capital wasn’t as important as intangibles. Those intangibles might reflect the accumulated knowledge in the business, its strategies and recipes, its intellectual property and ideas. What happens to how we structure an organization and how we value an organization if intangible capital becomes as important, or more important, than physical capital?


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By Jeffrey Phillips

Intangible Capital is a book that seeks to create a new way of thinking about our businesses and how we operate them.  Traditionally our businesses and how we organize them, even how we measure and report on them, have been based on labor and tangible capital (property, plant and equipment).  That’s because traditionally these were the motive forces behind how firms differentiated and made money.  Firms that managed their tangible assets and labor effectively made more money than those that didn’t.

But what if the situation changed and tangible capital wasn’t as important as intangibles.  Those intangibles might reflect the accumulated knowledge in the business, its strategies and recipes, its intellectual property and ideas.  What happens to how we structure an organization and how we value an organization if intangible capital becomes as important, or more important, than physical capital? Leer más “Book Review: Intangible Capital”

Strategic Results

All this planning stuff is just a waste of time if you don’t execute. I’ll be glad to give you a lovely binder with your corporate logo that you can put on your shelf and voila, you have your strategic plan!

Maybe not. What is the real strategic goal? Most likely, increasing the market value of your company – regardless of whether you are private or public. And what makes up market value these days? Well, in the ‘old days’ (20yrs ago?), a company’s value was based on tangibles – stuff it made – things you could touch, taste, smell, hear, see. Not so today – today’s companies’ market valuation includes a sizeable intangible component. Is Google worth $186B because of its servers and software? Apple worth $193B because of its hardware and technology? I posit their market valuation is based on these assets but more on their intangible assets – their culture, people, design, knowledge, experience, social/human network and capital.


All this planning stuff is just a waste of time if you don’t execute. I’ll be glad to give you a lovely binder with your corporate logo that you can put on your shelf and voila, you have your strategic plan!

Maybe not. What is the real strategic goal? Most likely, increasing the market value of your company – regardless of whether you are private or public. And what makes up market value these days? Well, in the ‘old days’ (20yrs ago?), a company’s value was based on tangibles – stuff it made – things you could touch, taste, smell, hear, see. Not so today – today’s companies’ market valuation includes a sizeable intangible component. Is Google worth $186B because of its servers and software? Apple worth $193B because of its hardware and technology? I posit their market valuation is based on these assets but more on their intangible assets – their culture, people, design, knowledge, experience, social/human network and capital. Leer más “Strategic Results”