Can't touch this--intangible assets.
Webster's Collegiate Dictionary defines tangible as "capable of being perceived especially by the sense of touch" and "substantially real--material." Tangible assets are physical and include buildings (real property) and their contents (personal property), vehicles, people, and cash for example.
It stands to reason then that intangible means not tangible, unable to touch, or impalpable. Because they are not physical, identifying intangible assets presents another challenge. As a result of limited awareness in the field and the nature of intangible assets themselves, camp professionals have consistently overlooked their organization's intangible assets and failed to include comprehensive, risk management strategies for preserving them in their risk management plans.
Before going too much further, it is important to say this is not an attempt to moralize or preach. Much of what follows is based upon personal experience and acknowledged as good business practice. Many camps follow these and other appropriate business practices, which have served them well over many years. The objective is to challenge the reader, not to moralize. The goal is to get camp professionals to think about their relationships, business practices, and actions in new and perhaps different ways, helping them to understand that within their risk management plans the intangible assets of their organization are worthy of being preserved and managed along with their tangible assets.
Good Working Relationships
A good, professional working relationship with government and regulatory officials in your community is an example of an intangible asset. Cooperating with health department inspectors and officials is expected. Treating them politely and professionally, the way you would want to be treated yourself, helps to create a good relationship, the kind that can be an asset that could be helpful to you in the future.
A case in point occurred many years ago. A camp had an outbreak of salmonella. Good relationships with the local health department, local merchants, health-care providers, and an instinctive crisis-response effort resulted in the camp being allowed to stay open and work through the crisis, while the health department monitored the situation closely. There was certainly some good luck involved in this experience, but it appeared to those involved that the health department's decision was influenced significantly by the trust and confidence the camp had developed over time with their local officials. In short, they had credibility!
Not every circumstance like this one will turn out as well as this one did. But, without identifying the importance of a good working relationship with all government and regulatory authorities as an asset to be managed, the potential for a good outcome in a similar situation is left to chance--not a very good risk management practice.
Positive Work Environments
Human resources are definitely tangible assets. But, a positive working environment is another example of an intangible asset. Has anyone ever asked you to describe the perfect person for a tough job? Have you ever said in response, "You know I'm not sure, but I'll recognize the perfect candidate when I see him/her"?
Identifying the elements of a supportive, positive work environment presents the same challenge. Camp directors talk about the phenomena and the incredible positive experience that follows when all of the elements of a positive work environment are present during the summer. Some speak about it reverently, almost as if it were a spiritual experience. Perhaps it is. Is this an asset? Is this something you can touch?
Part of the formula for creating a positive work environment is doing simple things, like keeping your word, doing the "right thing" in difficult circumstances, being consistent, rewarding behavior you want repeated, and treating people equally and fairly. Beyond these actions the formula for a great work environment becomes unique to each camp. How does this benefit your business? Well, it almost seems unnecessary to say that when staff experience a high-performance, positive work environment, there is a better than average chance your campers will have a good time too. Is the future earning potential of your business an intangible asset? Is it worthy of some risk management planning?
Knowledge is Power
Someone coined the phrase "knowledge is power." Knowledge is also an intangible asset. Some refer to knowledge as the ultimate competitive advantage for a business, because the knowledge of the organization and the individuals who are the organization cannot be duplicated. In some businesses this knowledge has become known as "trade secrets." But, knowledge is definitely a double-edged sword.
Does your organization have key staff with specialized knowledge? Does anyone else in the organization share this knowledge? What happens to the knowledge and your organization if something happened to your key staff tomorrow? Can the knowledge be duplicated, or would it be lost to the organization if the staff person leaves, dies prematurely, or is disabled?
A Good Reputation
Your camp's good reputation is another example of an intangible asset. It is often the first one identified when the conversation turns to intangible assets. But, a good reputation and the goodwill that is generated by a good reputation are the sum of a thousand small, simple actions, such as paying your bills on time, being honest in your business dealings, and so on.
It is like being a kid again, putting pennies in a piggybank day after day. One day you stop, total up the pennies and are surprised to learn how much you have saved. In a business context, your business dealings are pennies representing either a deposit or withdrawal from an imaginary bank account. At some point in time, the total is evaluated, and the sum is the reputation of your business. If you have more deposits than withdrawals, you will enjoy the approbation of your peers, trust, confidence, credibility, goodwill, and many other benefits that flow from having developed a "good reputation." You can't touch a good reputation, but you'll know it when you see it.
The risk management process provides camp directors with a road map to help you and your organization find your way over, under, around, and through the risks, which may impact your camp operation. Take some time before next summer, if you haven't already done so, to expand your risk management process to include your organization's intangible assets. Best wishes for continued success.
Ed Schirick is president of Schirick and Associates Insurance Brokers in Rock Hill, New York, where he specializes in providing risk management advice and in arranging insurance coverage for camps. Schirick is a chartered property casualty underwriter and a certified insurance counselor. He can be reached at 845-794-3113.
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|Date:||Mar 1, 2004|
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