The New ROI of HR: Return on Intangibles
By David Creelman and Dave Ulrich

Do intangibles matter? Asking that seems like a rhetorical question, but if we go back 20 or 30 years, the answer would have been “What are they?” and then when the concept was understood, “No.” Up to the early 1980s, the typical company was worth just about the same as its book value. This made sense in a lot of ways. If a company had a building and three injection-molding machines, why would you pay more for the company as a whole (market value) than you would pay for its component parts (book value)? However, in the 1980s something happened to the stock market....

David Creelman is CEO of Creelman Research (creelmanresearch.com), based in Toronto. Dave Ulrich is a professor of business at the University of Michigan and a principal at The RBL Group (rbl.net), a consulting firm based in Provo, Utah. Ulrich also is the co-author, with Wayne Brockbank, of The HR Value Proposition (Harvard Business School Press, 2005).