As the industrialised world has shifted from manufacturing to services, the very top companies, which are heavily knowledge-based, have gone to conquer a space in which intangible assets completely outweigh tangible assets.
Probably those top companies were born from very simple intuitions. At the beginning there was only a claim, which still needed to be proven. Returns on investment were still something very far in the future.
In this world it is important to claim ownership at an early stage and plant quickly your own flag in your speciality. Amazon took approximately seven years to become profitable. Stockholders started to complain about the company not reaching profitability fast enough, but Amazon had still to go through a painful learning exercise to become what they initially claimed to be. LinkedIn needed three years to become profitable.
What I want to say is that intangible assets take time to confirm themselves and then it might be already too late to replicate them. Baruch Lev provided a definition of intangibles in his book of that title: “An intangible asset is a claim to future benefits that does not have a physical or financial (a stock or a bond) embodiment.“
Competencies are a key component of value in a knowledge-based company, yet very few companies report on competency levels. Competence, i.e. the ability to do something successfully or efficiently. Everyone can agree that proving a tool to map competencies is a space to conquer quickly.
Now let us get to my “give away idea” for whoever has been reading so far:
What if a company specialised in Human Resource Information Systems was offering a small intranet version of LinkedIn! I am particularly looking at the feature to endorse others for certain skills, but in my idea only endorsements between colleagues horizontal, up and downward are allowed. That would be fun. One would achieve a competency map or a 360° performance evaluation with the speed of the light. Competencies could be set to decay automatically after 2-3 years. HR Analytics could be put in place to monitor the situation.
From September 2012, LinkedIn allows users to endorse each other’s skills. I remember my first endorsement I received. This feature also allows users to efficiently provide comments on other users profiles – network building is reinforced. Endorsements given within the same company would need to rely on the hierarchy and on HR to guarantee that endorsements remain meaningful and truthful. One of the main criticism about the endorsements given via LinkedIn, is that they are not necessarily accurate and/or are given by people who not necessarily have familiarity with the skills of the person. Skills need to have a recognisable link to the business performance.
Lately I have been reading like mad on HR Analytics. I should read less and write more. I know. Allow me to recommend a very thought provoking book titled “Predictive Analytics for Human Resources” from Jac Fitz-Enz and John R. Mattox II. Thanks.