Did you know that as of 2020 90% of assets on S&P 500 corporate balance sheets are intangible assets? In 1975 it was only 17% or roughly $122 billion dollars. The 90% intangible asset figure today represents over $21 trillion dollars. Numerically it’s astounding. Basically, over time, reality has become…perception. At least from an accounting standpoint.

It begs the question: what is value and how do you account for it?

Forget about picking stocks or valuing companies. Whether it’s Elon Musk tweeting about a cryptocurrency created as a joke (dogecoin), digital art being sold by Christie’s for millions of dollars (beeple), or NBA highlights being sold and resold for hundreds of thousands of dollars (NBA Top Shot) how do we perceive value in today’s digitally consumptive world?

It’s a loaded question.

Working within companies and on teams that need to deliver economic value these challenges are similar. What are the most valuable things? The most important assets? Well, they’re not people. Because, by the rules of accounting, people cannot be capitalized (or they would surely would be). Ha! People are the most important asset though. Software too. Distribution, why not. The point is that perception vs. reality from a value perspective has been blurred like never before.

It really feels like we are in the midst of an accelerating transition between the physical and digital world, S&P 500 corporate balance sheets being one prime example (see above). It is a complicated time and the need to create tangible strategies amidst the blurriness of perception is a tall task.

Organizing your team around a mission with clear objectives based in reality is one surefire way to level up future perceptions of what you might be able to collectively deliver. Perception is important too. How teams perceive their leaders for example. Or how “face time” at work will evolve within fully remote or hybrid workplaces in the post COVID era. Ideally the reality of a team’s output will be held above perceived notions of fluffy inputs. Leveraging perception to accomplish a goal (in reality) is the key.

Roblox went public this week. One of the first companies chasing the metaverse – a fully digital world – with very aggressive goals around how to achieve it and a deep war chest to deliver on the promise. For early investors who believed there’s nothing intangible about those financial returns. These experiences are worth billions. Quiiite a lot of value. Translating personalized perception into tangible economic output is just as real as anything else these days.

The takeaway is, again, it’s complicated. Times they are a changing. Digitally and physically. What is the difference now anyway?