What counts in business is often not easy to count—assessing the intangibles.

Organizations are increasingly recognizing intangible assets as a critical source of value creation. Unlike tangible assets such as machinery or buildings, intangibles encompass intellectual property (patents, copyrights, trademarks), brand recognition, customer relationships, and human capital. Tapping into the intangibles of human capital can significantly enhance a firm’s competitiveness. These intangibles in human capital include employer brand, leadership, culture, skills, employee experience, happiness, engagement, diversity, and more. Here’s how measuring, monitoring, and monetizing these assets can substantially contribute to an organization’s value creation and boost total shareholder value:

1. Measuring Intangible Assets: The first step in leveraging intangible assets for value creation is their identification and quantification. Despite their non-tangible nature, making them challenging to measure, various methods, including accounting and financial models, can estimate their value based on their potential to generate future revenue.

2. Monitoring Intangible Assets: Continuous monitoring allows organizations to understand the performance of intangible assets over time and their impact on the company’s overall value. Tracking the development of skills, leadership capabilities, employee experiences, diversity journeys, impactful cultures, and brand recognition, among others, provides insights into where investments in intangibles are yielding returns and where adjustments are needed.

3. Monetizing Intangible Assets: Turning intangible assets into tangible financial gains enables organizations to unlock new revenue streams and strengthen their competitive edge.

The trend towards valuing intangible assets reflects shifts in the global economy, with knowledge-based industries and digital technologies assuming more significant roles. Consequently, companies proficient in managing their intangible assets often witness a substantial increase in their total value, evident in both their balance sheets and market valuation, as well as in shareholder returns.

For organizations, prioritizing intangible assets necessitates a strategic approach to asset management that includes investments in people, innovation, and branding, along with developing capabilities to measure and monetize these assets. This approach also requires addressing challenges such as the need for specialized knowledge to accurately value intangible assets and navigating the legal complexities surrounding them.