I’ve been reading Break From the Pack: How to Compete in a Copycat Economy by Oren Harari. Even though I’m only two chapters in, the book already mentions some good stuff.

He mentions that “the key predictors of corporate success and shareholder value are not the size of a company’s tangible assets, but the size of its intangible assets like its speed in execution and customer care, its culture of constant innovation, and its mobility and agility in capitalizing on fresh, fleeting opportunities. As the Brookings Institution found, 80 percent of shareholder value generated by the S&P 500 can be traced to intangibles. In other words, to predict who’s going to break from the pack, look at who’s got the quickest adaptivity and imagination, not who’s got the biggest on the balance sheet.”

The reason (I believe) why this is the case is that the tangibles (the balance sheet) reflects results of the past. But results can be achieved in a variety of ways, and results of the past might not always be repeated in the future.

That’s true as well for individuals, I think. What determines your success (in whatever you are pursuing) is not the tangible results of past ventures, but the intangible aspects – such as your character and creativity.

And yet society doesn’t often see it that way. Even from young, youths in school are judged based on results, not on their thinking ability or creativity. The focus should instead be on the intangibles, their creativity, their ability to think and adapt. It should be about skills and character, instead of mere book knowledge. While the latter is useful, the former is what will truly set you apart.

How are you developing your intangibles?