Posted by Jefferey Bridges on August 04, 2002 at 12:31:16:

In Reply to: KM- Value or Success! posted by TMalik on August 03, 2002 at 21:16:08:

TMalik, thank you for posing what I think is a very interesting question.

One can reflect on the recent events that are shaping the US and world economy and the future of corporate enterprises, institutions, governments and their stakeholders. Success and value seem to emerge as two different concepts but they may have overlaps as I explain here.

One may look back an year or two at the market capitalizations and the business buzz about companies such as Enron and WorldCom, or look back at the US economic performance data for the past couple of years. Given the stellar "numbers" that characterized the "performance" of these companies, these companies were considered successful as success was measured through various yardsticks of measurement.

Long ago, someone from the wiser generation shared with me something along the following lines: "You are successful when you do not have to prove that you are successful but others say that you are successful." One may project from this observation, that success is a measure in the eyes of the beholders that matter. We saw success in terms of the Jack Grubman and his coteria of analysts' that continued to give 'buy' ratings for WorldCom and other telecom stocks even when the real "value" was diminishing or degrading. Similarly, if you look at the recent story of Andersen in the current issue of Business Week, you will observe that a "successful" company became mired in a struggle for "financial value", focused all its energies on raising revenues by paying little attention to even 'maximum risk' and 'high risk' clients that included the likes of Enron.

Success depends upon the parameters of measurements of success which may be manipulated as we observed in the recent roller coaster ride of the dot.coms, the telecom industry, and by some estimates, 30% of the stocks listed on the NYSE. If the stockholders measure success by the short-term focus on the stock market price, companies and their CEOs have little motivation for not complying with the demands imposed for demonstrating success. In contrast, value is determined more by the real worth created by the companies that may include tangibles and intangibles (such as brand, credibility, integrity, and trust). Given that we have yet to devise reliable measures of measuring intangibles, this is an area that is prone to greater manipulation as we have seen in prior discussions about intellectual capital and Enron in some earlier discussions. In the short term, success determines if you survive. In the long term, it is the value that you create that may provide a real measure of success. The value as mentioned here is not only the extrinsic notion of value but the intrinsic notion of value. It is often challenging to live and succeed based upon values alone when the pressure for 'performing' and 'succeeding' as measured by several yardsticks coerces one to focus more on survival than on values.

Best,

Jefferey Bridges

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Follow Ups:

• Re: Knowledge Management for Success or for Value / Values TMalik 16:30:22 08/05/02 (4)
  • Role of Roles in Determination of Success and Values of KM Jefferey Bridges 21:14:57 08/05/02 (3)
    • Re: Role of Roles in Determination of Success and Values of KM TMalik 22:27:13 08/06/02 (2)
      • Measures of Success and Value in Extrinsic and Intrinsic Terms Jefferey Bridges 00:18:10 08/07/02 (1)
        • Re: Measures of Success and Value in Extrinsic and Intrinsic Terms TMalik 06:53:01 08/07/02 (0)

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