Beginning to Inventory Your Assets

We examine each asset type in turn. As a reminder, here are the four types:

• Physical capital: tangible assets including cash, plant, property, and equipment
• Human capital: skilled and capable employees, teams, and alumni
• Intellectual capital: software, biotechnology, and patents
• Network capital: relationships, interactions, connectivity, and associated insights

To complete a thorough inventory will require a team larger than just you and this book. Although your knowledge as a leader will help fill in many of the boxes, we recommend building out a multifunction task force; include subject matter experts in each part of your organization, such as all major product lines, marketing, human resources, and legal. The key is to make sure your team represents the full variety of your assets.

Each member of the task force is responsible for cataloging the four types of assets within a subset of the company’s operations. To start this process, all task force members should gather for a kickoff meeting to review the specifics related to each asset type discussed in this chapter. Any areas of overlap should be carefully addressed to avoid redundant efforts and wasted time.

Once the task force members are up to speed, they’re ready to go out into the organization and sit down with leaders and managers to discuss the asset types within their domains. These meetings can usually be accomplished over the course of a month and should cover the assets, their descriptions, and value where appropriate. The finished work product for each member of the task force includes two or three pages for each of the four asset types, with a list and high-level description of the key assets in that category.

To help you with this process, we have listed all the asset types. These lists are not complete, but they act as a starting point for understanding your asset base and discovering what you will need to grow into a network orchestrator.

Part of the process is to choose your task force carefully. The right members will have ready expertise in the areas they are inventorying, as well as an interest in the network project. The interviews they hold are good opportunities to increase buy-in and gain perspective from leaders around the company.

When the inventories of all assets are complete, they should be presented to the leadership team, usually the same team that did the Pinpoint step. During this day of presentations, you should spend significant time assessing the affinities, attributes, and potentials of each network. Deep understanding of your networks is essential for success in the following PIVOT steps. At the end, you will have a complete view of all the assets existing in your company, even intangibles, and you will be ready to design a new business model.

Inventorying Physical Capital Assets

You will start your inventory with the easy one: physical assets. Together, your task force will create a list of your firm’s tangible, physical assets. Categories to consider include cash, property, plants, equipment, and inventory. Add as much detail as you can, and values when available, but don’t spend more than a week on this. Much of the information should be detailed in your organization’s financial reports.

You might ask, Why even bother with physical assets when the goal is to shift toward a network business? One simple reason is that you need to understand what funds you have available that can be invested in a new endeavor. Second, physical assets can complement a network business model. For example, a Nest thermostat both gathers data and uses the data to better serve its network of users. Amazon uses its distribution centers to allow other sellers to sell and ship through the Amazon platform. And a complete inventory, including all asset types, will sharpen your view of your current asset portfolio and reveal how much attention and capital you spend on each type.

Inventorying Human Capital Assets

Next, your team will examine the human capital assets in your workforce. Begin by thinking about the various groups of employees, or contractors, that work for your organization. You can organize your thoughts in any way that makes sense to you, perhaps using an organizational chart or categorizing according to product lines, geographies, and the like.

For each employee group, identify the key skills or talents that differentiate it from others within and outside the firm. For example, your engineer groups may specialize in various technologies specific to your products. Take note of employees as well as teams that have special profiles, unique skill sets, or experience that make them difficult to replace.

Pay careful attention to technological capability during the human capital assessment. Recall that several digital technologies—social, mobile, cloud, big data analytics, and the internet of things—are closely associated with the network orchestrator business model. Note carefully how you currently leverage each of these technologies, if at all, and what level of expertise your employees and contractors have. This question has implications at all levels; not only do you need the hands-on skills to create and manage the technology, but you also need the thought leadership on your management team and board to conceive and support the projects.

Finding the right talent is just as key for network orchestrators as for any other company with any other business model, and the hunt for digital talent is becoming increasingly competitive. The trend of acqui-hiring, or acquiring a company solely for the purpose of bringing in its talent, has grown in Silicon Valley over the past few years, with Facebook, Twitter, Yahoo!, and Google leading the way.

The purpose of assessing your human capital assets is to gauge your staff members’ ability to create a digital platform to support a network business, and also to determine whether they possess knowledge or could provide services that would attract and provide value to a network. For example, staff software designers could collaborate with the network on software development or coach those wishing to enter the field.

Inventorying Intellectual Capital Assets

The third asset the task force will examine is intellectual capital—assets that are based on ideas and information. One important aspect of intellectual capital is the data your firm owns or can access. Data takes many forms and is often scattered throughout the organization. There may be data that you have actively sought to gain, such as hiring an external firm to do market research on your key customer segments, or data that you collect during the course of operations. Operational data can come from in-store or online transactions, website visits, manufacturing processes, and many other sources. Consider, as well, the data you could collect but do not do so currently.

Other categories of note are patents, biotechnology, trade secrets, trademarks, copyrights, brands, logos, and software, whether sold as a product or created for internal use.

The key question to think about is, “What do we know that is unique, differentiated, and potentially of interest to our networks?” Remember that in a network orchestrator business model, both the network and the company provide value. You examine intellectual capital assets in order to understand what knowledge you have that might be of interest to your network—whether you share it, collaborate on it, or sell it.

Inventorying Network Capital Assets

The last, but probably most important, category to inventory is your network capital. Begin by listing all of your organization’s key networks. There will be some that you manage closely, and others that you barely interact with. Consider the following categories, but note that there may be multiple, unique networks within each category. For example, you may have several distinct customer groups with different characteristics.

• Customers
• Prospects
• Employees
• Alumni
• Suppliers
• Distributors
• Integrators
• Investors
• Communities
• Peers
• Competitors

When you have a complete list of your networks, you then review the characteristics of each one. First, consider the level of affinity between members of the network and your company: is it high, medium, or low? You could think about network members’ general sentiment, their frequency of interaction, and their satisfaction with your organization and its products.

Second, think about what each party gets from the relationship. For example, at the simplest level, customers receive products, and companies receive money through their relationship. With many network organizations, however, customers receive esteem or shared revenues, and the companies benefit from customers’ ideas and insights. When you think about the benefits each group receives, remember the four asset types. Benefits can include physical things like goods and products; services provided by people; information and ideas; or relationships such as network access.

Finally, consider the potential of each relationship. Each network may have other assets and abilities that could be valuable to you. Likewise, the organization may have additional information, services, or relationships that the network would find useful, interesting, or valuable. We use the following tool “The network asset inventory tool” to assess networks with our clients.

It’s important to spend adequate time and effort in inventorying your networks. Most firms have never before taken this approach to understanding their networks, and doing it well may require additional meetings with various teams in your company, or even reaching out to the networks themselves.

Developing and expanding network capital is the foundation of network orchestration. Most network assets go underrecognized and underutilized. Networks store a vast array of talents, skills, and assets but are rarely activated to share value with companies. By cataloging the networks that exist in and around your firm, you’re preparing for the next step: creating a new network-centered business model.

There Will Be Gaps

The inventory process is long and detailed, but it truly shows you what you have to work with and identifies any gaps in your portfolio. For most firms, the inventory process reinforces the impact of their business model—few highly cultivated network assets and low capability with key digital technologies, but a lot of physical capital assets.

Don’t be discouraged. You have what it takes to apply the PIVOT process to your organization; you only need to cultivate some of the assets you have largely been ignoring and invest in some of the technologies and talent that you used to think weren’t relevant to your industry or core business. Completing your inventory sets the stage for you to understand exactly where you are currently and to visualize a new, exciting, and value-generating business model for your firm. That’s the next step.