The most influential contemporary economic resource classification, espoused by accounting and finance professionals, is based on three main categories: tangible, financial and intangible assets. Tangible assets include the stock of consumables, physical and technological assets; financial assets include the collective sum of financial instruments the organization owns; and, intangible assets envelopes all other that can neither be classified as financial nor tangible, but are proven to be critical for the successful operation of the organization. Although tangibles, financials and intangibles may have different compositions, their value is based on the financial valuation model, except for minor tinkerings. This has been maintained thus far, irrespective of the fact that its shortcomings are obvious to both practitioners and thinkers. Though, there have been numerous attempts to improve on the basic valuation model, the bests have hardly been applied beyond a certain scope: think Balanced Scorecard (Performance and Strategic Management); Brand Asset Valuator (Marketing), Return on Management (Human Capital) etc.
Although the financial valuation model continues to be relevant, it does not provide practical and reliable information on the resourcefulness and granularity of all classes, most especially within the intangibles.
Clearly, the existing classification and valuation models do not finely distinguish between resource types. Five Resources, One Fulcrum makes three major contributions. Firstly, it identifies and clearly defines five classes of organizational resources. Secondly, it provides both leading and lagging indicators used in the measurement and valuation of these resource types. And, finally, it declassifies Humans as a resource type, but rather considers it as the source and focal point of resources and expands further on the associated dynamics.
Clearly, the existing classification and valuation models do not finely distinguish between resource types. Five Resources, One Fulcrum makes three major contributions. Firstly, it identifies and clearly defines five classes of organizational resources. Secondly, it provides both leading and lagging indicators used in the measurement and valuation of these resource types. And, finally, it declassifies Humans as a resource type, but rather considers it as the source and focal point of resources and expands further on the associated dynamics.
FIVE RESOURCES
The work done so far results to a classification of resources that finely distinguishes the fundamental characteristics of these resources: Primal, Informational, Perceptual, Relational and Financial Resources.
Primal Resources include Land, Air, Space, Energy, Minerals, Stones etc.. Their inherent bases of value is centered on versatility, portability and stability.
Informational Resources include data, intelligence, strategy, action, messages, processes, methodologies, blueprints, signals and more. The bases of value of informational resources are clarity, relevance and precision. Informational Value is defined as the product of the probability of clarity, relevance and precision.
Image, Reputation, Brands are classical examples of Perceptual Resources. Their inherent value is built on inherent informational value, contextual fit and perceptual distance. Bond Strength is the valuation model for such resources..
Examples of Relational Resources are channels, networks, alliances, clusters, partnerships, markets, etc. Connectivity, Cohesion, Relational Distance, Delay, Critical Effort are the bases of value. Their valuation hinges on and is defined by Pool Potential and Pool Gravity.
Financial Resources include stocks, bonds, options, derivatives, insurance policies etc. Their inherent value is centered on Visibility, Assurance, Transferability, Financial Cover and Fiat Value. In valuation, we have the General Financial Equation that can be applied for any financial resource.
Although, in reality diverse items, products, assets are an amalgamation of more than one of these primary resources, it is important to consider them as distinct classes with various bases of inherent value and therefore indicators.
ONE FULCRUM
The declassification of People as a resource is fundamental to this work. These resources are products of the Human Psyche; therefore they must be distinct from People. Likewise, they are inputs for the Human Psyche; hence they must be distinct from Humans. However, because Human Assistance is needed throughout the process, it is imperative that we understand the mystery and know how best to align such assistance towards development. In attempting to understand this mystery, motivation, endowment, skill and time have been identified to be the fundamental determinants of individual contributions to any set of goals, whether collective or individual.
The discourse starts on motivation which is a generally accepted determinant of action. However, the basic model has been expanded by the introduction of perspectives of motivation and peripheral seat of motivation.
Then, the concept of endowment as an individual’s mental foundation that determines what can be learned and how it is learned is introduced and illustrated.
Thereafter the notion of skill and time are illustrated focusing on the span and depth for skill and the quality and quantity for time.
