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The Enron debacle, the dot.com implosion, and a record-breaking
deal for a popular morning news anchor are only a few of the most dramatic examples
of a new economic paradigm that is rewriting the rules of business. Consider
the following: IBM spends three and a half billion dollars to acquire Lotus Development
Corporation, but more importantly, its chief programmer. French corporation LVMH
creates the first luxury brands conglomerate, recognizing the potential operational
and marketing benefits from combining opulent brands like Louis Vuitton, Moet
Hennessey, TAG Heuer, and Givinchy under one managerial umbrella. Meanwhile, Monsanto's
stock price plummets, losing 35% of its value in a year, when the company's carefully
considered strategy to enhance growth, diversification, and public acclaim through
leadership in genetically modified crops, is met instead with public revulsion
for "Frankenfoods." The common theme among these, and dozens of other
examples analyzed in Invisible Advantage, is the profound degree to which
"intangible assets" are defining corporate value and revolutionizing
the ways in which business is conducted. Drawing from
their extensive research in corporate valuation, strategy, and consumer behavior,
Jonathan Low and Pam Cohen Kalafut estimate that fully one-third of an organization's
value is derived from elements that can't be seen, such as brand equity, strategy
execution, reputation, and innovative culture. Ideas and relationships: these
are the new currency of the economy -- and their influence on decision-making
can now be quantified. From leadership to communication,
technology to human resources, the authors identify twelve "measures that
matter" and convincingly demonstrate the bottom-line implications of investing
in (or ignoring) each of them. Achieving, and then sustaining, a competitive edge
will depend on how well you and your company balance all twelve factors. Highlighting
the most innovative strategies of organizations around the world, the authors
present strategies for succeeding in the age of intangibles, and propose an ambitious
agenda for reforming the ways in which corporate performance is recorded and evaluated.
Challenging and provocative, Invisible Advantage is a
decoder ring to the intangibles economy -- a new playbook by which managers can
learn to attract the most talented employees, profitable customers, collaborative
partners, and aggressive investors. Jonathan Low and
Pam Cohen Kalafut are leading researchers and experts on intangible value and
its implications for business management, corporate growth and economic policy.
Under the auspices of the Cap Gemini Ernst & Young Center for Business Innovation,
they have conducted four major research initiatives on the topic -- Measures
That Matter, Success Factors in the IPO Transformation Process, Decisions
That Matter and The Value Creation Index -- and published numerous articles
and reports on their findings. They have worked with a broad cross section of
major global corporations. Jonathan Low, a Senior Research Fellow at the Center
for Business Innovation, is a graduate of Dartmouth College and Yale University's
School of Management. He lives in West Palm Beach, Florida. Pam Kalafut is President
of Cohen Kalafut Associates, LLC. A graduate of the University of Texas with a
Ph.D. in Sociology from the University of Michigan, she lives in Ann Arbor, Michigan.
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