Collaboration as an Intangible Asset

Collaboration as an Intangible Asset7:37 AM Thursday June 16, 2011
by Robert J. Thomas | Comments (12)

Virtually every tearful Tony Award winner or jubilant NBA Most Valuable Player carries a crumpled wad of paper on which are named the people who "made it all possible." If ego and time allow, the list can be quite long. So it is with most breakthrough innovations and banner financial years.

The point is not to nod in the direction of the "little people," but instead to recognize that the intangible assets an organization has are the product of the hundreds, perhaps the thousands, of "assists" — to extend the basketball metaphor — that usually go unnoticed but without which problems would not get solved, insights would not be generated, and uncertainties would not be vanquished.

Interestingly, intangible assets are all the rage these days on Wall Street. Investors grapple daily in an effort to figure out how to value companies whose accounting assets — things like land, capital, products, and licenses — don't adequately express their true market value. Ask a buy-side analyst why Amazon or Apple fetches the price-earnings multiple they do, and inevitably the conversation turns to things like their ability to innovate, their capacity to capture and grow the best talent, their skill at managing brand and vendor relationships or ecosystems. There is no line on the balance sheet for "ability to innovate" or "skill at managing brand." And even if there were, it would have to be expressed as a probability statement: How likely is Apple to innovate or out-innovate its peers?

Most intangible assets are real but invisible, and the most important invisible ability is the ability (or, perhaps better said, the probability) to collaborate. After all, it's the willingness on the part of people to work together to solve problems when they could just as easily pass them along to someone else that forms the core of most things we call collaboration. It's the decision that someone makes to share an idea or to spend the extra hour helping out — not the regulation or contract that requires it — that usually means the difference between "good enough" and "outstanding."

Marvelous, but if it's invisible, how do you see an intangible asset or collaboration, for that matter? If you can't measure it, how can you manage it?

Fortunately, in recent years, social network analysis (SNA) has emerged as a powerful new way for managers to see the patterns of interaction — information sharing, problem-solving, coaching, and mentoring — that make up the less visible, often informal side of an organization. By asking simple survey questions online and identifying the people with whom they most frequently interact, SNA makes it possible to depict the networks that underlie or exist in parallel to the formal organization charts and process diagrams. Repeated surveys can, over time, reveal changes in networks or in patterns of collaboration — making it possible to assess whether interventions such as reorganization or targeted efforts to improve collaboration (like offsite events, new software/communications tools, or incentive programs) actually have their desired impact. Moreover, targeted questions can reveal different types of collaboration.

Case in point, SNA conducted at Novartis helped reveal a pattern of communication — and the existence of parallel innovation efforts — that made it possible to combine teams before they reached a crucial stall point in the development of a new vaccine. At a major retail bank, early signals of an emerging rift between factions — manifested in very different networks of information sharing — made it possible to save an acquisition before it came apart. And a rapidly growing pharmaceutical manufacturer discovered through network analysis that management bottlenecks were holding back critical decisions and alienating lower level employees.

Fortunately, tools like social network analysis are making it possible to do something more than "water and wait" when it comes to cultivating intangible assets. By utilizing more effective ways to depict social networks, to see change in them as a result of targeted interventions, and to distinguish among the types of collaboration possible, managers are finding that they can grow enterprise value and earn their companies a much richer treatment by investors.

So, the question is: What are the most critical intangible assets in your company? What are you doing to cultivate them? Who is responsible for managing the invisible that creates the intangibles?

Robert J. Thomas is the executive director of the Accenture Institute for High Performance and professor at Brandeis University International Business School. He is the author or co-author of eight books on leadership and organizational change, including Crucibles of Leadership (Harvard Business Press, 2008), Geeks and Geezers (with Warren Bennis, Harvard Business Press, 2001) and Driving Results through Social Networks (with Rob Cross, Jossey-Bass, 2009).