The document discusses the importance of non-financial assets such as employee, customer, partner, social, intellectual property, and brand assets. It argues that companies overly focus on financial assets and performance, but other important intangible assets are often ignored. These non-financial assets can appreciate over time and form 80% of a company's value from an investor's perspective. The document advocates for establishing value creation councils and reporting on intangible assets to better manage and grow these important sources of company value.

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Dear ,
The real sources of value: Assets and Performance
Companies tend to focus on financial assets and financial performance. They
measure every aspect of these, and in known periodicity. They report these
internally and externally, and are pleased that they are following the really
important factors for the company’s success and future wellbeing. These people
are sometimes called bean counters aka finance people. They also track investor
assets because they feel they have to compete in the market place for the
investors’ capital.
Because of this focus, the company loses track of other important assets, and do
not get the bean counters to track them well:
Employee Assets
Customer Assets
Partners as assets
Social Assets
Intellectual Property, knowhow, and innovation assets
Brand Assets
Value Creation Assets
Investors as Assets
Note you could use the word Capital instead of assets, although I prefer assets.
Just as an aside, traditional assets in a company have to be maintained. There is
a maintenance and depreciation plan for them. Plant and machinery, mobile
phones and laptops, furniture, buildings.
The other assets mentioned above are not always maintained well. In fact many
of them can appreciate in time (unlike physical assets that might depreciate),
unless an employee leaves or a customer leaves. There are poor maintenance
plans for them: Just enough for them to stay on and perform. In fact we are more
interested in the performance than in the asset itself.

2. Non-financial assets are often shrugged away as intangible, difficult to measure
(and therefore difficult to manage?) Or is our management and focus
inadequate? Some will even say these intangible assets form 80% of the
investor’s focus of the company value. So if we cared about our investors assets
we would care about the non-financial or “soft” assets (and make them as
important as “hard” assets).
I think most people understand the various intangible assets and broadly know
how they are defined. Value Creation assets are less well understood and
developed. Your value creation assets exist in:
Plant and machinery assets: you will certainly overhaul your manufacturing
capabilities and watch, analyse and revamp them to create more value
Product offering assets: You work on creating products that will create more
value
Employee assets: You create value for employees in order for them to create
more value and you invest in teaching your employees assets to create more
value for the customers, the partners and society and thereby for the company.
You set up an environment conducive to, and encouraging value creation (for
example value creation councils)
Customer assets: How do you create more value for the customer, thereby
increasing loyalty, market share, prices and profit assets?
Social assets: Where do you put funds that your customers perceive as adding
value, thereby making them prefer your company more than competition? Do you
understand how Values create value for the company? Values include trust,
honesty, and loyalty (to customers), sustainability, safety etc. How do you get
employees to create more value here?
Brand assets: As value creation increases, brand assets increase. Value creating
employees have brand equity that increases the brand assets of the company
Innovation, proprietary information, know how, intellectual property assets: Value
creation in the minds of the employee increases these assets, because they work
consciously to create innovation and value
Do your investor assets really know about these intangible assets and the true
value of these and how you are growing these, resulting in value for your
company? Can shareholders really judge the true source of value creation? Are
you giving them the tools to do so?
And are you putting the tools into place to create and measure value: the
processes, structure and the organisational skills to do so. Are you creating value
for the employees? Do you have a Chief Employee Value creator? And do you

3. have Value Creation councils to bring to the fore Value creation by employees for
themselves, their colleagues and other employees, their customers and society?
And can you measure this value creation, and the increase in assets and
performance? Do we have the competences to create more value, and to
encourage value creation?
So let us encourage Value Creation Councils. Let us report our intangible assets
and its performance as much as we do the financial performance.
Your comments are welcome!
Call at (+91) 7838333300
Gautam Mahajan, President-Customer Value Foundation
M: +91 9810060368
Tel: 11-26831226, Fax: 11-26929055
email: mahajan@Customervaluefoundation.com
website: http://www.Customervaluefoundation.com
Customer Value foundation (CVF) helps companies to Create Value and profit by Creating
Value for the Customers, employee and for each person working with the companies.
Total Customer Value Management (Total CVM) transform the entire company to focus on
Creating Value for the Customer by aligning each person's role in Creating Customer Value and
getting shareholder wealth and Value.