The imperative for innovation in asset management
Building on previous work, presented at AMPEAK 2015, this paper focuses on the cost, risk, performance balance, where performance is the performance of the company, rather than the performance of assets themselves. The imperative to improve company performance, while managing safety, environmental and technological risks, in a capital constrained economy, drives a need for innovation in the way that value is created through assets.
This paper proposes a six-stage model that links company performance, in terms of growth in return on assets, and growth in shareholder equity, to the way the primary assets are used to create value. A company’s tangible to intangible asset mix affects company performance. Companies with a higher percentage of intangible assets demonstrate higher rates of growth. This prompts the need to consider how companies can better integrate their tangible and intangible assets to improve overall company performance. A series of case studies demonstrate companies that have successfully managed this integration and the risks faced by those who fail to do so.