In the last few days of the Presidential election an interesting side story developed in the form of a battle between the pollster’s numbers and the pundits expertise and gut feel. A number of high profile pundits made statements about how wrong the polling numbers were. Their focus made a social-media hero out of some of the pollsters – especially Nate Silver of the New York Times’ FiveThirtyEight blog. Turns out that polls were right – and the gut feel pundit wrong. Of course, not all the polls were as accurate as Silver (see stories in the Washington Post and the Wall Street Journal). And it must be understood that a number of these pundit predictions – such as the statements by Karl Rove – were mostly likely more about influencing the outcome rather than predicting it. But still, the number-bashers were spectacularly wrong.
The same mistake gets made repeatedly on understanding intangible assets. Part of the problem is our use of language. Too many people association the “intangible” part of intangible assets with the definition of intangibles as ethereal, indefinable or vague rather than the definition of intangibles as not physical. And indefinable means they can’t be measured.
This confusion leads some to the false conclusion that intangibles can’t be measured. They can. Metrics are an important part of understanding and managing intangibles. As we noted in our 2007 report Measuring Intangibles,
The measurement of intangibles is nothing new. Humans have been measuring intangibles for a long time. Whenever a teacher assigns a grade, they are measuring an intangible (the student’s knowledge). Whenever a boss gives or does not give an employee a raise or a bonus, they are implicitly measuring the employee’s skill level and value added to the company. Whenever a customer chooses one color, make, and model of a car over another, they are measuring a number of intangibles. Whenever an investor buys a company’s stock based on an expectation of future gain, they are investing in intangibles.
Ironically, political polls are a perfect example. Election polls measure an intangible — voters’ preferences. And political polling developed not as a public education tool for the media, but as campaign management tools. Polls tell campaigns were they are strong and where they are weak. They help determine what to do about the situation.
So if there is a lesson for intangibles coming out of the campaign, it is this: data matters. Simply going with your gut feel is a recipe for getting it wrong (as Comedy Central’s “The Daily Show” pointed out in video). If your don’t believe me, just ask Karl Rove or Joe Scarborough or Newt Gingrich or Dick Morris or George Will or Peggy Noonan.