More than accounting
Last July Mckinsey published a useful little paper
on the changing relationship of intangible and tangible assets of digital
capital and how what was once a small minority of business activity are
becoming the rule in the digital economy.
The view being, we can see the rising importance of this shift in the recent
copyright battles between Internet and consumer-electronics companies and in
the major spending on patent portfolios.
Measuring the full impact of digital capital requires a new set of
management and financial lenses that incorporates your intangible assets such
as your designs, business models and brands.
This is echoed by the work that BCG have done and called out in
my Digital
Diamond Hunting post, digital capital has become a major contributing factor
in global economic growth. In some economies such as the UK, Sweden and Japan
spending on intangibles represents two-thirds of digital capital’s total value.
According to BCG the digital economy is being driven, too,
by small – medium-sized businesses’ fast adoption of online commerce. These
companies are the backbone of the UK and they've taken to the internet economy,
creating a virtuous circle: more choice for consumers, more cash in the
marketplace and more promotion of the internet as the way to reach and engage.
Not all rosy
UK startups, have blazed a trail, but for the larger FTSE
100 enterprises things aren’t as rosy. With a market cap of over £1tn and
employing an estimated 6.5m people and only four chief technology officers
sitting on their boards, an indication of the low priority attached to digital
strategy.
With FTSE 100 companies far behind the public, small
businesses, startups and even governments in the digital race, there is growing
demand for them to be held to account. With various stakeholders considering
some form of Digital Performance ranking indicator to showcase this as a key
business metric, where companies with at least ten percent of revenues online
will be championed.
Want a playbook and fresh
approach?
For the laggards a useful methodology to consider is Max Kreijn’s Open Activation work on
how to evolve from enterprise to startup?" He’s done some fresh work and introduces 7 of
the many findings from the research that consolidates the method of Open
Activation. Collectively they provide an initial guide to how a large
enterprise can begin thinking, acting, and succeeding like a digital startup.
Check it out, as the importance of digital intangibles
continues to grow, we are increasingly going to see the need for these types of
fresh approaches where the Digital Davids transform the Enterprise Goliaths.
