Invest in intangibles

Here is a tidbit from a new report from the Booz & Company magazine Strategy+Business — Growth through Focus: A Blueprint for Driving Profitable Expansion (registration required):

Too often, when companies rationalize and focus, they slash expenses across the board. Two areas that take the brunt of cost cutting are people-related expenses (recruitment, training, travel) and brand advertising. However, talent and brands are the two most valuable assets for driving growth. We recommend increasing investments in hiring and developing talent, even ahead of the company’s needs. We also recommend increasing investments in building brands.

Amen to that.
But where are the resources for that investment? As the article goes on to say:

The good news is that the growth-through-focus approach yields significant cost savings through elimination of management layers, reduction of overhead, and elimination of marginal businesses. Focus frees up resources that can be used to invest in the future.

It’s actually an old strategy — focus on what you do best (once known as “core competencies”). The new twist on this is the explicit recognition that intangibles should be part of core competencies.
But you knew that.

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