It's Proven. Talent Drives DJIA Market Value.
Intellectual Capital is the dollar-figure contributions talent makes to the market value of companies. It measures the market value of a company above and beyond tangible assets, including internally developed brands, patents, technologies and other intangible assets not recorded on the company’s books as well a those on the books acquired through purchase. Every year we analyze the results of the companies in the Dow Jones Industrial Average (DJIA) to measure this Intellectual Capital Index (ICI). In 2016, the majority of the enterprise value – on average over 88 percent – was driven by the company’s people instead of its tangible assets. The analysis also reveals that the overall value of talent-driven intellectual capital across DJIA companies now totals more than $4.3 trillion – a growth of more than $300 billion over 2015.
The top five ranking “intellectual capital” companies in 2016 – those driving the most financial value from their talent – in the DJIA are Pfizer, Boeing, Apple, Visa and Johnson & Johnson. See all results below.
88% of the average company’s value is a direct result of the only active source of intellectual capital – its people.
Building Business Value through Talent uniquely describes how a CEO and CHRO can accelerate business growth by working together to design and operationalize value-driven talent strategies.
CEOs focus on decisions that will drive the business strategy forward while HR leaders routinely try to satisfy the needs of the largest number of employees. Often, the two align superficially or in administrative ways - and to put out the occasional flash fire. This book changes that dynamic by unlocking the investment potential of HR and empowering an unprecedented, tangible and measurable partnership between CEOs and CHROs. Framed as a product guide, the product is visualized as the HR Operating Model necessary to succeed in our modern economy: a business-based talent planning and investment strategy to sustain talent solutions and intellectual capital growth.
This product guide provides the tools and insights that business leaders are seeking in order to win the ever more challenging battles in their war for talent. Learning and adopting these winning practices will provide a visible testament to the effective leadership of any CEO and CHRO team.
It’s time to stop treating “human capital” as a buzzword and start managing it with the same level of rigor and diligence as tangible capital. This can be done. It must be done. Talent Valuation will show you how.