“Reputation is what people expect us to do next. It is their expectation of the quality and character of the next thing we produce or say or do. We control our actions (even when it feels like we don't) and our actions over time (especially when we think no one is looking) earn our reputation.” – Seth Godin
Predictability is comforting. We like our daily routines, we wear the same jersey or sit in the same seat when our team plays, and we tend to remain loyal to the brands we like and trust. Unforseen events can shake our confidence in corporations, so companies spend a great deal of time preparing for the unexpected to ensure they consistently deliver on their brand promises. However, businesses today face a unique challenge in that most of their value is intangible, which must be protected and advanced in different ways.
In the 1970s, a company’s market value was comprised of 83 percent tangible assets, things like the physical property, products, and machinery that the company owned. Only 17 percent of the market value of a company was made up of intangible assets, like intellectual property, human capital or reputation.[i]
Fast forward to the present day and the proportion has completely inverted. Only 16 percent of a company’s value is comprised of tangible assets, while 84 percent is made up of intangible assets (see Figure A).