The phenomenal response to Freeserve’s flotation last week has
concentrated many minds in the business world on the more intangible
factors of profitability.
Here is a company whose shares, in addition to attracting a record level
of subscriptions, rose by 37 per cent within the first few hours of
trading, yet whose assets exist primarily in cyberspace.
But it isn’t just this new breed of .com corporations whose most
valuable assets are proving hard to pin down on a balance sheet. Public
relations itself is a good example of an industry whose value consists
mainly of its ability to manage its intellectual property.
But when the DTI decides to focus its attention on these intangible
elements of an organisations operation it is a pretty clear indication
that these factors are having a tangible impact on performance.
As the Management Today study What Price Reputation? proved last year
(PR Week, 9 January, 1998), while the vast majority of brand leaders
recognise the importance of reputation, few actually know how to put a
value on reputation as an asset.
Admittedly the DTI has balked at any claims to unearthing that
particular holy grail, but what it does promise to do is to isolate the
various elements that go to make up reputation. And it is making a real
effort to establish methodologies that can be used to value
environmental, ethical and social impact, brand evaluation and
Whether these methodologies will prove to be transferable, enabling the
DTI to create a single method for valuing reputation, has yet to be
And as this is a long term project the industry had better not hold its
What this project will do immediately, however, is to open up for debate
an area traditionally marked by jealously guarded secrecy. In the spirit
of the CBI Fit for the Future (and PR Week’s own Best Practice campaign)
the DTI has brought on board those organisations such as Interbrand and
leading management consultancies, who have created their own
And, by involving accountancy bodies, the DTI will give a new
credibility to attempts to value reputational elements of business.
By drawing the attention of financial directors to the company’s
invisible assets, the DTI will place issues relating to reputation
centre stage. This provides an opportunity for corporate communicators
to use the information and impetus provided by the DTI to open up a new
dialogue regarding not only the value of these elements, but also the
value of their management.