Reputation is the New Bottom Line

Reputation is the New Bottom Line Mary Adams I-Capital Advisors ICA-1

3 steps to a lasting reputation Operations 1. Do things right 2. Be proactive 3. Be transparent Communications ICA-2

Operations driven by intangibles ICA-3

The intangible info gap • These What’s inside? invisible assets make your business seem like a “black box” • Earnings are visible but not the drivers of earnings ICA-4

Knowledge assets ICA-5

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 ICA-6

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 <5 • Competencies each • Relationships 3. Measure and communicate…. ICA-7

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 ICA-8

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] Measurement Very different results: matters 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 ICA-9

To build and maintain a The good reputation, help Bottom your stakeholders “see” Line? the intangible side of your business ICA-10

Resources Book: www.intangiblecapitalbook.com Community: www.icknowledgecenter.com Blog: www.smartercompaniesblog.com Mary Adams, 781-729-9650 adams@i-capitaladvisors.com Twitter: maryadamsica ICA-11

Reputation is the New Bottom Line

by Mary Adams on Oct 21, 2010

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