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April 08, 2013

Comments

Enrique

GDP as well as the balance sheet or P&L statements in companies are outdated reflections of the complex reality surrounding a country or a company. Not only they fail to recognise the digital content as you mention, but also fail to contemplate the value of the people, which ultimately are the makers of the business, being a country or a company.

Ben McMann

Great article, echoes the work around Intangible Assets and the challenges with measuring and managing them by Leif Edvinsson at Skandia back in the mid to late 1990's, and Baruch Lev's work around measuring Intangibles from an accounting perspective in the early 2000's.

Identifying the true value creating processes within an enterprise and how best to manage and measure them is a wicked problem because they are unique to each company and highly social and people centered in nature.

To support Enrique's comment, managing a business by the financials alone ignors the major drivers of value creation - the intangible assets - which don't show up on the balance sheet or income statement.

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