The Overlooked Value: Embracing the Unmeasured Human Abilities and Behaviors in the Age of AI

Sep 22, 2023

In today’s ever-evolving business landscape, we witness a seismic shift in how enterprises are measured for their worth, or enterprise value. Tangible assets like factories, equipment, and inventory, once the primary drivers of a company’s value, now occupy a diminishing role. Instead, intangible assets, often referred to as goodwill, have risen to prominence, accounting for a substantial 75% of a company’s valuation. Yet, the glaring oversight persists: organizations predominantly concentrate on measuring skills and knowledge, neglecting to assess and harness the unmeasured human abilities and behaviors. This omission could prove catastrophic as AI continually advances its capacity to replicate skills and knowledge, raising questions about the irreplaceable qualities humans bring to the table. 

The Ascendance of Intangible Assets 

As we analyze the valuation of today’s most prosperous enterprises, a compelling pattern emerges: tangible assets constitute less than a quarter of a company’s overall worth. The remaining 75% comprises a complex web of intangible assets, encompassing an array of elements that are challenging to quantify but undoubtedly possess substantial value. These intangible assets encompass: 

  1. Intellectual Property: Innovation, patents, trademarks, and proprietary technologies embody the capacity to create and safeguard unique concepts—integral components of intangible worth. 
  2. Customer and Supplier Relationships: Enduring, symbiotic bonds with customers and suppliers play a pivotal role in goodwill, signifying trust, reliability, and dependability. 
  3. Influencer Relationships: In today’s digital era, influencer marketing can exert a profound impact on brand reputation and success, positioning strong influencer relationships as invaluable intangible assets. 
  4. Marketing and Sales Expertise: A robust brand, effective marketing strategies, and a nimble sales force all contribute to the intangible assets that drive value. 

The Ignored Human Factor 

What’s intriguing about this transition is that a significant portion of these intangible assets arises directly from human contributions. The skills, knowledge, relationships, and behaviors exhibited by an organization’s workforce are potent contributors to its intangible assets. Surprisingly, however, businesses are placing a disproportionate emphasis on skills and knowledge, potentially overlooking the irreplaceable aspects of human abilities and behaviors—choices that may have dire consequences, given AI’s growing competence in replicating skills and knowledge. 

Measuring the Wrong Dimensions 

Enterprises have traditionally favored systems and strategies aimed at monitoring the health and efficiency of tangible assets such as machinery. Sensor systems, dashboards, and early warning mechanisms are standard tools for safeguarding these assets. Yet, when it comes to human capital, a conspicuous gap emerges in monitoring and managing ongoing performance. 

AI’s Limitations Amid Human Nuance 

A sobering reality casts a shadow on AI’s rapid advancements: while AI excels at replicating human skills and knowledge, certain human abilities and behaviors remain elusive. Traditional HR and management systems predominantly emphasize skills and knowledge. However, abilities and behaviors represent equally critical dimensions, enabling individuals to apply their skills and knowledge effectively. AI’s uncertainty in replicating these nuanced human traits underscores the peril of underestimating their value. 

Embracing the Unmeasured 

In an era where intangible assets wield unprecedented influence on a company’s value, businesses must recalibrate their focus. It’s time to recognize the crucial significance of human abilities and behaviors—the dimensions that remain inadequately measured but profoundly impactful. By extending the same rigor applied to measuring skills and knowledge to these less quantifiable qualities, enterprises can fully unlock the potential of their workforce. 

The sobering reality persists: AI’s prowess in replicating human skills and knowledge accentuates the value of unmeasured human abilities and behaviors. To relegate these aspects to obscurity is to risk squandering the irreplaceable qualities that humans bring to the business arena. 

Ultimately, an enterprise’s true strength lies not only in what it possesses but also in the people who drive it forward. Human abilities and behaviors, frequently overlooked but profoundly influential, represent the bedrock upon which business resilience and innovation are built. In the age of AI, recognizing and harnessing the unmeasured becomes not just a choice but a strategic imperative for a sustainable future. 

Jeff Campbell is CEO of CykoMetrix, a digitalization platform that enables psychometric product and service companies to leapfrog into digital business transformations. 

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