Opinion Discipline for intangibles?

When you similarly love a painting,if someone says it’s terrible,you immediately defend its value and your appreciation for it. What makes a painter or painting famous is society’s collective admiration. Of course,the painting must have craftsmanship and shock-of-the-new. Commercial aspects start thereafter,the unique painting’s intangibles keep rising with time. No other industry compares with fine art and sculpture in multiplication of intangible valuation in monetary terms. It has no correlation with the artist’s time spent,or cost of paints,brushes,canvas,chisel and hammer. It’s visible appearance creates the intangible. A painter or sculptor can never imagine how valuable any work of art can become. An apt example is Vincent Van Gogh who sold just one painting at 400 francs during his lifetime. Yet two of his paintings remain among the World’s Ten Most Expensive Paintings Ever: Portrait of Dr Gachet at $82.5 million and Portrait de l’Artiste sans Barbe at $71.5 million.

Intangibles in business: In industrial business,crafting intangibles means the product or service has customer pull factor for repeat purchase. As handmade craftsmanship has dominated India for centuries,industry here is yet to understand the alchemy of crafting intangibles in industrial reproduction. In 16th century Europe,after individual expression of art,science and literature was liberated from the Church’s repression,it flourished. Until then the appreciation of mass scale reproduction did not exist. Britain’s 18th century Industrial Revolution changed everything. As the precursor of mass scale duplication,Europeans have mastered the crafting of intangibles in industrial reproductive products in every industry. The US followed suit much later.

For a brand to succeed in business in the digital world’s vulnerability,you have to create intangibles that reflect in your brand’s product or service. Advertising alone gives no edge if in-built crafted intangibles are absent in the product itself,particularly when good-looking,cost-effective Chinese goods are available in every domain. In New York’s high-end Times Square or Milan’s Via Monte Napoleone,the world’s most expensive fashion street,you see Swatch totally transform a generic category like watches. With outstanding intangibles in $50 watches sold from a small museum-like retail,Swatch has proved that cost and category are immaterial. Intangibles are always possible at any price point,whether in a $5,500 Louis Vuitton bag or Rs 25 McDonald burger in India.

After some IT service sector research throughout the world three years ago,when I shared the insight that Cognizant will soon be a force to reckon with,the IT community here paid no attention. Global IT service buyers had confided in me that Cognizant proactively tries to understand the client’s business,they don’t merely provide technical IT service. They observed that Cognizant’s ability to embellish relevant support to shape the client’s business did indeed help shape their business. Today Cognizant has become No.2 in India’s IT service industry. Obviously it’s not power of size,but crafting intangibles centered on every client’s industry that has enabled Cognizant to grab the global customer’s mindshare.

The science of intangibles can be divided into three parameters: 1) Connoisseur craftsmanship,which means ingenuity of a superior skill at any given time. (2) Visible embellishment which can be sober or garish. (3) Elusiveness,a mental grasp that combines to elevate (1) & (2) to a heightened platform that’s hard to express but becomes implicit. Intangibles give comfort in customer experience,leads to seduction and aspiration beyond expectation. The comfort a corporation experiences in spending on tangible infrastructure assets cannot build intangibles. Only on the design table can intangibles be crafted,determined within a boundary of high discipline. Samsung has broken Nokia’s market supremacy and is now challenging Apple in different categories by crafting differentiated intangibles in a narrow area.

What discipline does intangible creation require? This self-defined discipline is not the same as authoritative military discipline. Whatever the size of an enterprise,extreme creativity in crafting intangibles can happen within a five-fold disciplined boundary of the product having a purpose,uniqueness,sale-ability,expandability and being aspirational. Crafting intangibles in this discipline periphery ensures commercial success. Indian companies need to invest dedicated interest,time,research and money to get rid of the heat of global brands by creating intangibles in their products and services instead of spending in physical assets only. Without intangibles,a brand is hollow. Intangibles mean premium bottomline earnings,called plus value in French.

Shombit Sengupta is an international creative business strategy consultant to top management. Reach him at ww.shiningconsulting.com