Narrative Net Worth

Do you know your net worth???

When I work with companies on their corporate narrative, it is inexplicably tied to their financial well-being, be it defending it, saving it, and or growing it.? There are many financial tools and metrics that slice and dice a company’s financial well-being. In net worth terms, the balance sheet and shareholders equity are two measurements used to determine a company’s financial health.? I would also extend that to Return on Equity and Return on Assets (how well they deploy their assets/people).

The simplest equation of Net Worth is assets - liabilities.? You obviously want to have more assets than liabilities if you are to thrive as a corporation, team, or person.?

As we continue down the path of working with corporations, teams, and individuals to develop their respective narratives it is so clear to us that there is a common denominator as a result of our work.??

The result is to increase net worth.??

And, as you have come to expect from us, our craft of designing a Narrative requires us to dig deeper into the root meanings of things.? A good friend of mine calls it “distillation down to the central idea”.? Our distillation on “net worth” uncovered the following insights:?

Investopedia (the financial version of Wikipedia) defines net worth as “the value of assets a person or corporate owns, minus the liabilities they owe.”?

There is a whole financial ecosystem aimed at helping companies and individuals to optimize for that equation. It is in effect the “central idea” behind how you measure your life’s work - from a financial perspective.?

When we first came up with The Narrative Playbook, it was to help an individual get back on track after a 7-year absence from what she loved doing.? Ironically, she was an Economist.? She was wicked smart, off the hook on numbers, modeling, and everything that you would believe an Economist should be.? She also had a story but struggled to articulate it with confidence, in spite of already having a TED Talk in the books.???

As we are now 18 months, 30 executives, and two teams into the development of The Narrative Playbook, we continue to search for how to cross the chasm between want and need.? How is what we do relevant to an individual who may need what we do, or a team lead that needs to build an internal identity, but can’t quite understand why they should sign on?

Enter the financial concept of Net Worth as a proxy for what we create. It struck us that we are effectively helping companies, teams, and individuals to understand and grow their “Narrative Net Worth”.? The Narrative meets the numbers equation that Ashwath Damadorn wrote about in his book Narrative and Numbers, The Value of Stories in Business.?

Welcome to Narrative Net Worth.? What is a Narrative Net Worth?? More importantly, why does it matter?? And how do I calculate the value of my net worth?? All very good questions that we seek to answer in our evolution as a Narrative Design Lab.

I scoured my financial books for the term “Net Worth” to find a deeper context. Can we use “net worth” as a proxy for taking an esoteric concept of narrative and marrying it to something more tangible to make what we do more relatable?

The dots started to connect.? A book that I am reading and spoke about in Edition 9 RECREATE - The 100 Year Life, Living and Working in an Age of Longevity - talks about tangible and intangible assets that are required for individuals who will live to be 100.? The Future of Work world (where many of my corporate customers reside) speaks to the need to acquire, upskill, and or reskill to remain relevant and future proof your career.? Many of these skills are called “soft skills” or “intangible skills” - like knowing your narrative.?

Further digging into Net Worth uncovered the idea of “tangible assets” (things that are physical in nature and can be measured or classified as what the valuation world calls definite) and “intangible assets” (an asset that is not physical in nature and can be classified as either indefinite or definite).?

To further define “intangible assets”, Investopedia offered: An intangible asset is an asset that is not physical in nature. Goodwill, brand recognition, and intellectual property, such as patents, trademarks, and copyrights, are all intangible assets. Intangible assets exist in opposition to tangible assets, which include land, vehicles, equipment, and inventory. Additionally, financial assets such as stocks and bonds, which derive their value from contractual claims, are considered tangible assets.

KEY TAKEAWAYS

• An intangible asset is an asset that is not physical in nature, such as a patent, brand, trademark, or copyright.
• Businesses can create or acquire intangible assets.
• An intangible asset can be considered indefinite (a brand name, for example) or definite, like a legal agreement or contract.
• Intangible assets created by a company do not appear on the balance sheet and have no recorded book value.?

UNDERSTANDING AN INTANGIBLE ASSET:?

An intangible asset can be classified as either indefinite or definite. A company's brand name is considered an indefinite intangible asset because it stays with the company for as long as it continues operations. An example of a definite intangible asset would be a legal agreement to operate under another company's patent, with no plans of extending the agreement. The agreement thus has a limited life and is classified as a definite asset.

The ultimate dot connection was found in a book on my shelf entitled, “The Number, A Completely Different Way to Think About the Rest of Your Life”, by Lee Eisenberg.? Lee was the former editor-in-chief of Esquire.? The idea for the book started because of a conversation around the awkward question of “what is your number?”? As in, what number do you need to hit to call it a day or live in comfort for the rest of your life?? He learned that this was a painful, taboo conversation, yet everyone has a number somewhere in their logic.?

This sentence nailed why Narrative Net Worth is a relevant concept and why we intend to design for it as part of our Narrative Design Lab approach.

“The Number means different things to different people, which is another reason it’s hard to talk about. The Number is about net worth, and most people think of it that way.? But the Number is also about self-worth, which many people don’t like to admit."

Our modern stereotypes make it hard to separate self from net worth, yet going forward your narrative net worth will matter more than ever.

The parallel to The Narrative Playbook Guided Group and Sprint programs is that we are solving for an individual narrative that requires the sharing of self-worth-related elements.? In our group work, it is amazing to us how the cohorts rally to help each other solve for their unique individual outcome. Many realize that their own solution is not an isolated matter, but usually a similar point of stuckness.? The Executive Sprint program is more intimate, yet the touchpoints are the same - unlocking or reframing a way of thinking and becoming unstuck.?

Hence, the central idea is The Narrative Playbook builds your “Narrative Net Worth” - an intangible asset that will serve you for the rest of your life.? And, if we do it right, will result in producing tangible assets that will fuel the growth of both your personal and self net worths ultimately yielding a long and fulfilling life.?

NOW

Do you know your net worth? ?Have you taken inventory of your tangible and intangible assets?? In narrative terms, we have talked about “narrative equity” being your tangible results or visible assets that you can show as a case study.? Your intangible assets are your use cases (intentions) and your learnings/wisdom/experience as the ability to go beyond your last role on the resume (capacity). For those that have gone through the program - it is your Narrative Playbook and how you intend to activate it going forward.?

You can get the ball rolling by taking our free Narrative Quotient Self Assessment, a first step to realizing your prevailing narrative.?

NEW

Activation for 2022.? What can The Narrative Playbook help you accomplish in 2022?? We have launched the Self Guided Narrative Playbook for those who are self-motivated and desire a Masterclass approach to solving for their Narrative.??

We are going to be rolling out a refined program for Building Your Narrative Net Worth in a membership-driven approach that is the next level of deeper integration, with the thoughtful high-touch dynamic you have experienced in The Narrative Playbook program.? Our intention is to have the Narrative Net Worth program live beginning in January. Just in time for the new year’s resolution.??

Our Alumni will get a sneak peek into this thinking next week as part of our TNP Cross-Cohort Alumni meet-up.??

NEXT

What we are reading and viewing:?

Narrative and Numbers, The Value of Stories in Business. By Aswath Damodaran.? Aswath is the Kerschner Family Chair in Finance Education and professor of finance at NYC, Stern School of Business. He is one of the world’s foremost experts on Corporate Valuation.? This book evolved from his argument with Bill Gurley over the valuation of Uber.? Damodaran thought it was a $30B taxi replacement market and Gurley thought it was a $300B transportation disruption.? It turned out to be somewhere in the middle and then some.?

“The Number, A Completely Different Way to Think About the Rest of Your Life”, by Lee Eisenberg. Lee was the former editor-in-chief of Esquire for nearly twenty years.? This book was written in 2006, prior to the Great Recession and current-day pandemic impacts.? But, the idea of knowing your Number is still as valid, if not more important today as we all deal with life in a post-pandemic, technologically disrupted world.?

Facebook...What To Do? By Scott Galloway.? This is a fascinating read by Prof G, as people call him. You have seen Scott on TV as a talking head on CNBC, or perhaps as a co-host of Pivot and ReCode with Kara Swisher.? A true protagonist and also a professor of Marketing and Finance at NYC, Stern School of Business, when he is not disrupting higher education with his company Section 4.?

The Payoff?

Narrative Net Worth will become an essential asset for corporations, teams and individuals alike in the 21st century.? The evolution of Web 3.0 is accelerating us to a life beyond mobile and into a world that will become more decentralized, requiring each of us to know our personal narrative and our respective self-worth better than ever before.??

The Creator Economy, The Attention Economy, whatever you want to call it is here and it is evolving faster and faster into our everyday lives.? Newsfeed by newsfeed.? Universe to Metaverse. You will likely possess a personal token in the form of an NFT (digital asset) that will become your individual stored value (your resume, your work history, your art portfolio, your identity, your passport, your access).? It will in effect become your Narrative Net Worth.?

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