Immaterial Values in Business Management

Maybe you have already heard that in some ways immaterial values are important for business management.

But you might not found how to bring them into your management processes or into your reporting packages.

However, first of all we should be clear, what immaterial values are? Well, this includes the balance sheet information about intangible assets, but is going far behind it.

As we all know, decisions are mostly based on feelings or emotions, than on logical judgment. A feeling is an energy.

Energy is not material, it is immaterial. The overall emotions or motivation of employees in a business is a immaterial value, it could have positive and negative impact on the business development.

Does sound very esoterical for you? Might be, but today we know that our emotions drive a lot of our life.

Not only the feelings of the employees have an impact on the business development, also the feelings of potential customers have it. These customer feelings could be measured as customer satisfaction, as how customers see the company or it's products and services and so on.

There is more energy, which is immaterial, included in our business life as we are aware of.

Until today we might know about these energies or have read that businesses have to be more aware of them. But to find Solutions which are able to measure these energies are not very common and hard to find.

Business Management still uses hard figures such as ratios based on financial values and just forgets that there has been more than only the numbers from the accounting and the money in the pocket.

If you only look to the accounting figures of a business, you only look to this company as if you were looking at an iceberg. You only see a fraction of the iceberg, only what is above the surface.

Everything below the surface is out of your view. While the iceberg is melting away, it still brings up new parts of it self. But you only see this new parts, when the iceberg is melting.

It's just the same with the accounting figures as soon as you see them they are gone. That means they are old, it's nice to knew them, but they relate to business already accomplished.

The accounting figures are just like to iceberg when it comes above the surface while it is melting away. Now, wouldn't it be great to see the whole iceberg, even if a big part is below the surface?

Yes, it would be great. The immaterial values of your business are just below surface. If you bring them up, you could see the whole picture of your business.

Running a business only focusing on profit could lead to running
into a collapse. It might take time, but soon customers and
employees will find out that just the profit counts to a specific
company. Well, it's correct, no business could survive without
profit, but first of all every business has to make profit on
immaterial items, such as image, motivation of employees and
customers faith.

One day from these immaterial profits the financial profit
arises. That's the theory. Probably you already read about this,
but have you found a way to measure immaterial values of your
business? It's not that difficult, but it needs some thoughts.
First of all it is important to make a list of immaterial values
which have the most impact on the business development. When this
has been finished, methods to measure and valuate the immaterial
values have to be found.

And at last, the values for all the selected immaterial items
have to be analyzed regularly. Setting up such a Reporting System
for immaterial values could be a long lasting task. You might try
to do it with a spreadsheet program or with a database, but
either way will take it's time. Using ready made Standard
Software might be another option, but there are not much choices.
In case you use the Balance Scorecard, you might think having all
the data mentioned above and you might think having a good
solution for analizsation.

The Balance Scorecard has it's advantages, but for a short, fast
and regular analysis of immaterial values it is far to complex
and much to slow. There is just the need to measure, store and
analyse some data. About 30 items will be enough to have an
overview of immaterial values and some material values as well.
Most of the necessary data are usually already stored in every
business. They only need to be concentrated into one table and
have to be analyzed.

Are immaterial values important for every business? Yes. This
includes big businesses as well as the one-man-business, retail
stores, mechanics, freelancer and so on. You may find more
information on immaterial values in business management, when
searching for Early-Warning-System, Early-Recognition-Systems and
something similar. You are able to find one or the other
immaterial value included in Management Methods, Ratio Systems
and Financial Analysis. But still, most Reports and Measurement
System are based on financial data.

A Solution which every business, no matter of size, could use, is the abenetis ERS (Early-Recognition-System). It is called Early-Recognition-System, because with the used immaterial values every business could be aware of tendencies in it's business development soon.

At the moment the abenetis ERS is availableonly as Online-Service, but could soon be delivered as Intranet-Version, too.