Tangibles and Intangibles

Value network mapping addresses two basic types of

deliverables - tangible and intangible.

The way the terms are used here is a bit different

from the way they might be used in other methodologies.

Tangible deliverables

Tangible deliverables are all those that directly support production and delivery of goods, services, and revenue or funding. Another way to think of this is that tangible deliverables and exchanges are transactions that are contractual or mandated. In other words if you don't deliver these things, you don't get paid or someone is going to want their money back.

Tangibles include contracts and invoices, return receipt of orders, request for proposals, confirmations, payment, etc. Tangibles would also include the business transactions required to deliver or execute core goods and services. Knowledge products or services that generate revenue or are expected as part of service (such as reports or package inserts) are part of the tangible value flow of goods, services, and revenue.

A simple way to think of tangible value is that it is contractual - it is part of the service or good that is paid for and normally expected.

Intangible deliverables

Intangible deliverables are all the little "extras" - such as certain kinds of knowledge or information exchanges, favors, and benefits that build relationships and keep things running smoothly. 

No one pays for these intangibles directly and they are almost never formalized or contractual, but they are still critical to support the business transactions and processes.

These are intangible "products" or "deliverables" or "benefits" that can be exchanged, as indeed people can and do trade favors to build relationships.

Tips for naming intangible deliverables

In Value Network Analysis (VNA) it is important to be precise about language, particularly when working with intangible deliverables. What we are defining in VNA are intangibles that can work as deliverables, and others that are really about something else - such as the conditions or behaviors of the network, or attributes of a particular participant.

When a word or concept becomes confusing it is often because someone is making a category error. One kind of category is intangible deliverables. Another is intangible assets. Confusing the two is a category error. If you are facilitating a group in the mapping process it is particularly important that you master these fine distinctions or people can become confused and frustrated. 

Tangible deliverables include:

A diploma and a degree from the university.

The tuition that she has paid for courses she has received.

Her contractual obligation is to complete and deliver her course work is a tangible as well.

Recognition that could take the form of honors, ceremonies, or special privileges. It is at the discretion of the university, not contractual.

The competence she now holds is an intangible asset - it is not a deliverable. The university delivers courses - they cannot directly deliver competence.

Joy is an emotive state, not a deliverable.

Deliverables that cannot be delivered

A simple way to catch yourself in a category error when you are naming deliverables it to ask yourself, "Can this actually be delivered?"

Is it something specific - so that a person or group could be held accountable for managing its delivery? If someone came to you and told you that you are responsible for delivering that particular thing, would you know what to do?

Some examples

People often identify "knowledge" as a deliverable. If you were responsible for delivering knowledge, the first thing you would need to ask in order to do that would be, "What kind of knowledge?" The specific kind of knowledge might be market intelligence. So, which would be more understandable as something you need to deliver, knowledge - or market intelligence? Market intelligence, of course. 

Would you deliver responsiveness - or a quick response?

Confusing an intangible asset with a deliverable

An intangible asset is a non-financial resource that a person or firm can draw upon to generate outputs. For example, human competence is an intangible asset. This asset can be converted into products and services, or specialized kinds of knowledge - such as market intelligence, but it is not directly deliverable.

An asset is a kind of "stock" that accumulates, while a deliverable represents the "flows" of different kinds of output generated from that stock. See Value Conversion in the Deep Dive chapter.

Confusing a deliverable with a condition or a norm of behavior

Conditions that influence the network tend to be states, not flows. Emotive states are conditions, not deliverables. Trust, distrust, fear, or hostility are all emotive states.

For example, you cannot really deliver "trust" any more than you can make someone trust you. However, people do deliver specific behaviors, actions, or expressions that demonstrate trust, such as preferential treatment or repeat orders.

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