kungdesign’s posterous

Close your eyes.
 
Imagine that three-quarters of your company's value is intangible. You know, the things that accountants don’t count, like knowledge, culture, brand recognition, trade dress, customer service, research, reputation. The things that consumers really connect with (not the steak, the sizzle).
 
Open your eyes. It's true.
 
So, if intangible assets - human talent, trademarks and brand equity, innovation capabilities, institutional knowledge and skills, databases and information systems, reputation, goodwill, proprietary knowledge - account for over 75% of a company's value….
 
And, wealth creation in the 21st century is driven by talented people converting intangibles into tangible goods and services that have financial value….
 
Then, why are the core sources of intangible asset development - design, marketing, advertising, R&D, talent development and training - often the first 'expenses' cut in an economic downturn?
 
The question has several possible answers. One is a fault in the way assets are counted and valued: if intangibles can't be counted, are not reflected on a company's balance sheet and can’t be valued, there is a perception that they have no value.
 
The other is that there truly is a lack of understanding in business about the value of intangibles, and by extension, those who produce them and convert them to tangible outcomes.
 
But the real value of intangibles isn’t a new idea: a 2001 report from the Brookings Institute notes "It is widely accepted that intangible (knowledge or intellectual) assets are the major drivers of corporate value and growth in most economic sectors…"
 
And Kaplan and Norton based their 2004 book Strategy Maps on the fact that "intangible assets - those not measured by a company's financial system - account for more than 75% of a company's value."
 
The British Design Council's 'Value of Design' report found that:
- Shares in design-led businesses outperform key stock market indices by 200%
- every $100 spent on design increases revenue by $225 and profit by $83
- companies that maximize return-on-talent realize a 5-fold increase in average profits (compared to a one-third increase in return-on-capital)
 
So there is overwhelming evidence of the measurable value of design and creativity to a company's bottom line.
 
We're in the intangibles business and we wanted to get the word out.
 
To thrive in a downturn and beyond, hire back your designers, get your researchers and scientists back in the lab and stoke the marketing department's engines.
 
And don’t just take our word for it…pass these along to the unbelievers you meet:
 
Reporting Intangibles
http://www.athenaalliance.org/apapers/ReportingIntangibles.htm
 
The Value of Design Factfinder report
http://195.157.47.227:8080/design-council/pdf/TheValueOfDesignFactfinder.pdf
 
Intangibles: Management, Measuerment and Reporting
http://www.brookings.edu/press/Books/2001/intangibles_book.aspx

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