Proving your Intellectual Capital

Throughout history, a principal source of competitive advantage for businesses has been the ability to make tangible assets intangible. (i.e. to convert cash and inventory into brand and goodwill)

40 years ago, tangible assets of S&P 500 businesses were five times more valuable than intangible assets. Today, intangible assets outstrip the value of tangible assets by a factor of five-to-one.

Among the intangible assets of businesses, the most valuable is “intellectual capital,” the specific knowledge that has accrued within an organization.

Intellectual capital is: The refined problem-solving process that has emerged from decades of trial and error.

The deep working relationships that exist among the talent you have fostered for decades. The culture that drives your organization to serve your customers better.

We cannot accurately assign a monetary value to any of these individual components, but when they are brought together, they have an exponential effect on the tangible value of a business.

Intellectual Capital is unquantifiable, but its value is indisputable.

Put succinctly, it is the way a business thinks.

The problem with thinking is you cannot see it.

The better businesses can access their intellectual capital, the greater advantage they have.

The key to accessing that capital is communication.

Customer acquisition is a communication problem.

Product development is a communication problem.

Shareholder confidence is a communication problem.

Many of these objectives are assigned as the responsibility of internal marketing departments that rarely have a perspective wide enough to articulate the nuances of a business’s intellectual capital.

These problems are interconnected, and the task of solving them is not just a communication dilemma demanding written solutions.

It’s also an engineering endeavor demanding technical execution, in particular the ability to communicate visually.

Businesses today rely less on physical interaction for the transmission and implementation of ideas. Instead, they make intellectual capital tangible through a process of visual engineering.

In all engineering endeavors, there is a defined relationship between design and result. A bridge designed to hold five cars will collapse under the weight of ten.

The same dynamics apply to visual communication as an engineering discipline.

Without the right design system in place, the consequences are dire:

Customers don’t understand what they’re buying, teams don't know what they’re building, and shareholders don’t know why you’re building it.

In the same way, bridges can be tested when they are modeled, ideas can be tested when they’re made tangible.

Visual articulation increases:

The velocity of ideas because people process images more quickly than language.

The durability of ideas because people can recall images more effectively than language.

And the amplitude of ideas because visuals transcend language barriers.

The more accessible an idea, the more it can be leveraged.

The more it can be leveraged, the more value it can create.

Create an advantage by learning how to leverage your intellectual capital.

I talk through this idea in detail in the below video:


Proving your Intellectual Capital