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Ignore the intangible elements of a business at your peril!

Posted on January 6, 2015 | Categorised in:

I was fortunate enough to listen to Lucy Adams, a well respected business leader delivering a great speech recently. She talked about the fact that 70% of a business is now around intangible elements:

  • The reputation of a brand
  • Goodwill
  • Trust
  • Intellectual property
  • Employee advocacy

All these are going to be key to the success of a business, but don’t appear on a P&L or ‘balanced score-card’. These are all impacted by employees who have a key role in the success of any business. Without employees, there is no service to deliver a brand and no goodwill. Despite the impact employees can have on a business, many businesses are still missing the opportunity to tap into the full potential of their employees to build these areas:


A cornerstone to sustainable business. Trust between the managers and employees; the business and it’s customers and the business and its suppliers. This is a fragile relationship that needs to work to retain true trust in your brand.

The Reputation of the brand

Future sales will depend on the reputation of the brand. An area that is not so much influenced by the quality of the product, but more the service and how it was delivered. Your employees represent your brand and are your shop window – every single one of them can impact the delivery of service in some way.


When the chips are down and you need a little luck to go your way, as business leaders you will be looking for goodwill to help see you through.  This includes employees going the extra mile to look after customers and going beyond the call of duty, to bring in that extra sale or client. From a supplier perspective to help get you through challenges, or to help you meet the demands of a boom in business. However, this will be impacted by the level of trust they have in you as a business and your reputation.

Employee Advocacy

How do your employees talk about the business when they meet up with their friends? (who, by the way, are potential customers and employees in disguise). Do they talk positively about the business and their relationship with it and are you happy that this is across the business or just in small pockets?

Intellectual Property

Do your employees understand the benefit of retaining the IP within a business to help keep it one step ahead and successful?  Have they got a level of loyalty to the business to retain that?

All these areas rely on the link between the business, its leaders and the rest of the employees. This might come under the title of ‘organisational culture’ or ‘employee engagement’, but when it does, for whatever reason, it seems to slip off the priority radar for many leaders.

These are not soft issues that have a notional halo effect on the business. Organisations with strong cultures, where employees are fully engaged, can have a net operating profit 2 to 3 times higher than those whose staff are not engaged.

Remember these intangible elements make up to 70% of what a business represents and you can see why it so important to ensure the leadership team keep a focus on them.

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