This painfully viral meme comes to you courtesy of none other than James Governor of RedMonk Consulting, perhaps better known as @monkchips.
He infected me badly at the recent EMC megalaunch event in London. The words escaped his lips, and I had to go think about it -- a lot.
And maybe you should, to.
The balance sheet is one of four basic financial statements, showing the financial status of an enterprise at a given point of time.
At a high level, assets minus liabilities equals shareholder equity, e.g. unique value created.
It's hard to argue that information wouldn't play in all three categories. Certainly, a robust information portfolio can be considered an enterprise asset. Poorly managed or secured, that same information can often be a liability as well.
Indeed, as more and more goods and services have an increasingly relevant information component, should we start asking ourselves this rather obtuse yet insightful question?
I think the answer is -- yes -- since I believe in the act of asking the question, we drive the right behavior.
We Know Money, Don't We?
We, as a society, know how to think about money and finances. We know how to value financial assets, we know how to use them efficiently, and we know how to protect their value.
Are we anywhere near as collectively proficient when it comes to information assets?
We Struggle To Think Of Information As Potential Value
Generationally, we have not been trained to think of information as money.
At one of the spectrum, traditional IT organizations view massive amounts of information as a cost, a risk, or perhaps both.
And at the other end of the spectrum, many business users have fallen into the lazy habit of thinking in terms of silver-bullet applications that somehow magically deliver the right information at the right time, without going deeper to understand the nature of the information behind these convenient applications.
Somewhere in the middle of these two extremes is a potential treasure trove of information-based value waiting to be unlocked for those that go looking.
And asking the right questions can force attention on an unfamiliar topic.
Consider the all-too-frequent scenario of multiple databases, lying around an organization, each providing a partial glimpse into customers, markets, or other key aspects of the business. The total value of the information asset can only be realized when the pieces are assembled, and used to generate new insights.
Or consider enterprise knowledge management. At EMC, I am convinced that, for the vast majority of questions, there has been a document written somehow, somewhere. Finding it can be a problem, though :)
It doesn't take too much consideration of business-as-usual, and realize that we don't think of information as an asset -- one that must be used efficiently to be of full value.
Thinking About Asset Maintenance
If you've got an expensive manufacturing machine, you invest periodically to keep the asset running in top shape, otherwise its value falls sharply over time.
Are information bases any different? How many databases in your organization are providing declining value simply because there isn't a regular program of data maintenance and enhancement?
You wouldn't buy an expensive manufacturing machine without investing in ongoing maintenance. Why should a value-creating information base be any different?
And, Yes, Risk Management
Turning to the liability side of the balance sheet, can large information bases be a corporate liability? We've certainly proven that case for, say, credit card information as well as sensitive diplomatic communications.
Put differently, if you're accumulating large amounts of information as part of your business, perhaps you're gradually building up a risk profile that's invisible and hence unmanaged. Generations ago, companies dumped toxic wastes into the environment, and eventually there was a day of reckoning.
Putting financial provisions for the unlikely but possible event of having a "bad information day" directly on the balance sheet would certainly focus better behavior across most organizations. It certainly would drive better controls and governance.
And, Finally, Shareholder Equity
Finishing off the thought, so many of the newer value-added products and services that are driving economic growth are essentially information-based, or -- at least -- have a significant information component.
Most aspects of healthcare have turned into an information business, as have energy production and distribution. Manufacturing is largely an information-based vertical these days, as is retail. And financially services -- well, take away their information bases, and there wouldn't be much there, would there?
Getting The Right Behavior By Asking The Right Questions
When you watch good leaders and executives in action, one of their more powerful techniques is to ask the right questions.
They may not always give you the answer, but they want you to go think about something, in the hope that actions and behavior changes for the better.
As I think about it, this is certainly a potential example of this principle in action.
Do you believe that -- over time -- we will increasingly become an information-based economy? That the vast majority of newer business models will have a significant information-based component? That the discussion around 'big data" has less to do with technology, and more to do with new ways of creating value?
If that's the case, maybe you should start asking the question -- should information be on the balance sheet?