What are intangible assets?

The intangible assets of a company are those that cannot be physically perceived. Due to their immaterial nature, you can’t see nor touch them, but they provide great value to the company.

Types of intangible assets

There are various classifications of the main types of intangible assets. We can find knowledge intangibles: patents, software, data bases, etc.; business models; rights or intellectual property: technology, licenses, authorizations, etc.; relationships: corporate culture, relationships with stakeholders; those intangibles related to the brand: branding elements or the predisposition of individuals to decide on one brand or another-in other words, the perception of the company-. We’ll be looking closely at the last one.

The value of intangibles

The part of the company corresponding to intangibles is continuously growing. During 2020 it reached record numbers in the companies listed in the stock market all over the world, resulting in 55.5 billion euros. Plus, the intangible value of the world’s most intangible companies goes over 8.5 billion euros for the first time. It is estimated that these types of assets represent between 50 and 80% of the total value of companies all over the world (Brand Finance, 2, 2017 and 2020).

These numbers show that intangibles like the perception of a company or its reputation, have an economic impact on it, a significant one.

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Measuring intangibles: purpose and reputation

As we have seen, the value of a company is closely linked to its perception, same with the CEO’s perception-this last one has 30% impact on a company’s reputation-. Reputation is built around what a company does or says, its experience and what others say about it. But what factors have an influence on the establishment of this reputation?

There can be rational variables such as the product or service, innovation, transparency or the positive impact on society. But there can also be emotional variables like prestige or credibility, which are translated into proactive behaviors towards companies. One way of improving these variables is by introducing a corporate purpose. By doing this, reputation is improved up to 30% (Leaders with Purpose Positioning Model, Thinking Heads, 2020).

Therefore, it is possible to measure how purpose impacts the CEO’s reputation as well as the company’s reputation. On the other hand, it is also possible to identify the key factors of a leader’s reputation with purpose.

Leaders with purpose positioning model

Consumers do not only pay attention to products anymore (rational variables) because they are more conscious than ever about the emotional side, which is related to reputation, the image of the brand, the trust and the values of the company. These types of perceptions are linked to how things are done and why they are done, influencing the global value of organizations. That’s why, a proper management and measuring of these intangibles can contribute to a better performance of enterprises.

The measurement of intangibles allows companies to be closer to their consumers, helping them to create more effective action plans which are backed by great quality data. Using the correct metrics for an adequate monitoring of the results of the aforementioned action plans, launches or other significant events, will be key to achieve influence and reputation goals, so valuable for the organization as a whole. It's now or never.

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