Published on 03.05.2010
Across a wide range of industry sectors, it is companies that are adept at developing and managing brand and intangible asset value that reap sustainable and superior rewards. Contrary to conventional orthodoxies, these potent business assets exert their economic influence not only in traditional packaged goods companies but also in the case of IT, consumer durables, cement and steel, luxury hotels and banking sectors.
Over the years, there has been a dramatic shift in the source of value creation — from tangible assets (such as property, plant, equipment and inventory) to intangible assets (such as brands, stakeholder relationships, IP, skilled employees, corporate culture, etc) that don’t show up on the balance sheets.
Consequently, brands and related intangible assets make up a large part of the value of many successful companies. Yet, barring a few honourable exceptions, managing these precious assets remains more a dark art based on guesswork and hunches, deficient of a disciplined framework which the board or senior management can access and debate in an objective way. Most senior executive team members realise this, although many still do not appreciate the financial significance of getting it right. It is hardly surprising that many senior leaders grappling with brand and customer value issues have found the experience frustrating.