#PaiRED: What We Need is a Mind Shift
What we need is a mind shift away from PP&E. It is time for a wake-up call. All business leaders need to embrace the importance of intangible assets. These assets can be very disruptive. Their presence is intensifying in areas like e-commerce, search, social media and behavior analytics. This is true anywhere data can be monetized. Sometimes they define new business opportunities. Sometimes they open up new markets. There are parallels between digital disruption and the industrial revolution. In the industrial revolution, engines took the place of human beings. The changes didn’t come from companies investing in motors. They came from companies’ understanding of how many different processes could be improved with motors and a little innovation.
Spending on digital capital represents about 30% or one-third of the GDP growth. About two-thirds of that spending is on intangible assets. Labor is more productive. There is less of it needed. All this has happened very quickly. It will continue to evolve at an increasing rate. It took 80 years for the steam engine to increase labor productivity at the same rate and about 40 for electricity. This digital revolution has happened in under 15 years. Many executives are not tuned into their organization’s digital strengths and weaknesses. This results in an underinvestment in digital capital. That leads to a certainty of missed growth opportunities. Simple suggestions like restructuring data so that it is accessible to RPA and AI innovations are essential to beefing up business strategy (Bughin & Manyika, 2013).
It’s about what they own and about what they don’t own. Retailers that don’t have access to digital behaviors may be out of business. The same thing could happen to banks or restaurants that can’t access customer information. Some markets have more digital competitors. Some have fewer. Amazon for example made its mark with digital retail but it became dominant with AWS (Amazon Web Services). Organizations need to identify where they are vulnerable. How can they build digital assets quickly? Highly evolved digital algorithms at Netflix allows them to recommend things to viewers that cable companies never could. That is an intangible asset.
Intangible assets also affect how companies use third parties and how they engage in tech partnerships. Are you in bed with partners that are outdated? Who’s leading who? Is the technology running the company or is the company running the technology? Even more true in the age of AI.
#PaiRED, #BobbeBaggio, #AI@Work, #WFH, #ThePajamaEffect, #Touchpoints, #Visual Connection
