These are just a few examples of a whole system of knowledge and innovation drivers -- a system that allows managers to benchmark and to focus on those things that work or do not work, both of which indicate a company's knowledge assets.
Let's say that I'm not a CFO. How does this accounting disconnect affect me? Why should I care?
This problem affects each of us directly. Both employees and executives are valued by accounting numbers, such as return on investment or earnings growth. Bonuses, for example, are often based on these old-fashioned accounting numbers. We need to be aware of the limitations of accounting, and propose improvements that do a better job of reflecting our efforts and achievements.
There's another way that accounting problems touch all of us. These days, most of us are also investors, which means that we must analyze corporate reports. We are all making investment decisions based on accounting information that is, at best, limited and, at worst, badly distorted. All of us need better information so that we can make better investment decisions.
But the biggest payoff comes from developing systems that improve accounting and reporting. Last October, for example, Cisco announced that it was in the process of developing an intranet that will provide users with an up-to-the-minute look at its books. Systems that give outsiders real-time access to some of a company's data will also be big business. In short, technology has created far more data than ever before. But what we all need -- and what we all need to work on -- is the transformation of this data into valuable information and knowledge.
Alan M. Webber (awebber@fastcompany.com) is a Fast Company founding editor. You can learn more about Baruch Lev on the Web (www.stern.nyu.edu/~blev).
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