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Reputation is the

New Bottom Line

Mary AdamsI-Capital Advisors

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3 steps to a lasting reputation

1. Do things right

2. Be proactive

3. Be transparentCommunications

Operations

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Operations driven by intangibles

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The intangible info gap

• These invisible assets make your business seem like a “black box”

• Earnings are visible but not the drivers of earnings

What’s inside?

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Knowledge assets

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Make it real….

• Toyota’s stories about empowered employees, satisfied customers, quality production built up reputation “bank” balances

• Google’s stories about engineers spending 1 day/week on new ideas add to its reputation as an innovator

• An engineering firm doubled their rates by turning an 18-inch manual into a wall chart—making their expertise visible

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To make it real for your org

1. How do we create value for customers? 2. What are the key intangibles driving this

revenue? • Processes• Competencies

• Relationships

3. Measure and communicate….

<5 each

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3 ways to measure/communicate

1. Narrative and stories� not the whole solution

2. Financials� investment is easiest but ignored

3. Nonfinancial indicators� quantitative – KPI’s popular but dangerous� qualitative – assessments create quantitative

data about hard-to-measure but critical data

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Coloplast analyst experiment

PwC provided different reports to two groups of analysts:

1. Financial statements, narrative, a few key metrics and extensive quantified nonfinancial data [full Coloplast annual report]

2. Stripped out quantified nonfinancial data [resulting report still similar to/better than market norm]

Very different results:

1. 60% of analysts recommended “buy” with the data� earnings estimate lower but more consistent

2. 80% recommended “sell” without the data� earnings estimate higher

Source: http://corporatereporting.com/benefits-reporting.html

Measurement matters

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The Bottom Line?

To build and maintain a good reputation, help your stakeholders “see”the intangible side of your business

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Resources

Book: www.intangiblecapitalbook.comCommunity: www.icknowledgecenter.comBlog: www.smartercompaniesblog.com

Mary Adams, 781-729-9650adams@i-capitaladvisors.comTwitter: maryadamsica