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Employees: the intangible assets Investing in workers is good for bottom line, expert says By DAVID PRESZLER Dr. Brian Wong says there's a huge gap in GAAP that businesses need to be aware of. He says GAAP -- business-speak for "generally accepted accounting principles" -- fails to place an accurate value on some of a company's most important assets: Its employees and the relationship it cultivates with customers. "Where do we account for them?" Wong says of loyal employees. "They don't qualify as assets. In fact, they show up as expenses. ... There is no line item for customers." Wong, national director of health-care strategy for the accounting firm Arthur Andersen, spoke Monday at the Chamber of Medford/Jackson County's monthly forum. Though he did address some specific health-care issues, much of Wong's presentation focused on the importance of intangible assets like employees and customer relationships. More than ever before, he says, value is being placed on such soft assets such as loyal customers, human capital, brands, channels for reaching customers and market alliances. Using high-profile companies like Microsoft as examples, he pointed to the huge gap between market value (based on stock price) and book value (based on hard assets). That gap, he suggests, is the value of intangible assets. Wong's company, Arthur Andersen, has developed a model to better evaluate ways that companies make the most of their employees and their relationships with customers. He says companies that understand the value of customer and employee assets and invest in them through training, benefit packages and customer services are flourishing. And investing in intangible assets is good for the bottom line. "We think the value really comes from leveraging the right side of the model," he says, referring to customer and employee assets. He cited Starbuck's as an example. By offering benefits and extensive training to its employees, the Seattle Coffee Company has cut turnover and built a loyal base of customers who come back because they get good coffee and are treated well. Those and other companies such as Southwest Airlines and Disney succeed by "investing in the customer experience" and empowering and valuing their employees, Wong said. Today's Edition : News | Sports | Business | Weather | Tempo | Classifieds Mail Tribune Copyright � The Mail Tribune 2000, Medford, Oregon USA