Cracking the Value Code

Now in the realm of economics and business, a new book asks: can we crack the "business genome" to better understand the fundamental language of wealth. The answer: "Yes, and that work has already begun."

Cracking The Value Code: How Successful Businesses are Creating Wealth in the New Economy offers a groundbreaking view of how economic value is created. The reengineering movement led by James Champy and Michael Hammer helped companies to see that the operational processes underlying their operations were fundamental to success. The authors of Cracking the Value Code argue that even more basic are an organization's tangible and intangible assets, the building blocks of value. Indeed, the book defines assets as the substance of the business genome, the economic DNA of enterprises.

With the great fortunes of the New Economy growing larger every day, managers in every industry are under intense pressure to break the underlying code of value creation for their own organizations. This book demystifies that process by offering specific answers. Companies win or lose depending on how they assemble portfolios of assets -- tangible and intangible. But the authors argue that companies need to look at far more than just the assets tracked by the measurement system of the Industrial Age. The book suggests that the economic code includes diverse sources of value - from a company's leadership and culture, to its intellectual property codified in patents, systems and processes. Until managers can identify all the sources of value, both internal and external, they will have an incomplete view of how to achieve market rewards.

Cracking the Value Code provides a powerful context in the form of Value Dynamics, a set of principles about value creation, and shows how companies can begin the job of cracking their own value code. Based on a three-year study of 10,000 companies by consulting firm Arthur Andersen, Value Dynamics offers new insight into what companies should do to create value in the new millennium.

Contents

• Introduction: What is Value?

• 1 How Are Businesses Creating Value in the New Economy? 5
• 2 Businesses Are Their Assets - All Their Assets 25
• 3 Businesses Create Value with Different Business Models 47

• 4 Who is Creating Value with Physical Assets? 67
• 5 Who is Creating Value with Financial Assets? 81
• 6 Who is Creating Value with Employee and Supplier Assets? 97
• 7 Who is Creating Value with Customer Assets? 111
• 8 Who is Creating Value with Organization Assets? 125

• 9 Putting It All Together 147
• 10 Design Your Business Model 159
• 11 Master Risk 179
• 12 Manage Your Asset Portfolio 197
• 13 Measure and Report All Your Assets 215

• Epilogue: Leave a Legacy of Value 237
• Glossary 243
• Sources & Suggested Reading 251
• Index