I had the privilege of giving the 3 hour concluding presentation to the Thunderbird MBA Winterim in New York today. My theme was “Does Marketing Matter?” – a deliberate provocation to a group just about to start their job search for careers in marketing.
My point was a serious one: they face a brutal recruitment environment and will need to distinguish themselves as potential recruits. I suggested that they can do so by demonstrating their ability for integrative thinking – specifically by their ability to integrate the marketing and finance perspectives on business.
One aspect of our discussion was how to think about the resources that generate economic value for the business. I urged them to think about this issue from both a marketing perspective (which focuses on the company’s understanding of its markets, and the quality of its franchise with customers) AND a financial perspective (which focuses on the efficiency of its business model, and the quality of the tangible and intangible resources it controls).
A particularly insightful part of the discussion centred on the divergence between the book value and the market value of companies, and whether the currently recognized forms of tangible and intangible asset (see my previous post) represented a comprehensive list of assets. The concept of “human capital” was the focus of the debate.
To a marketer, it is patently obvious that one of the key assets of a business is the ingenuity of a company’s employees. This is the source of their ability to craft new and valued sources of customer value.
To an accountant, this is problematic since an “asset” needs to be legally owned and controlled by the company. Now that slavery has been abolished, companies do not own their employees (even though employees may still feel that way at times!). Legal ownership is limited to the output generated by employees, whether in terms of physical product or intellectual property.
This highlights one reason why, even when we include the five categories of intangible assets sanctioned by the International Accounting Standards Board, the gap between book value and market value of companies will not be completely closed.
