Alan Bell explains why your business needs a Chief Junk Officer
In your business, what happens to your old machinery when it needs replacing? What do you do with out of date technology when a new piece of kit becomes available?
If you are like most companies, the chances are you will be either throwing them out with the scrap or you will have a store room (or even a warehouse!) full of junk which can be conveniently ignored or pilfered for spares further down the line.
So, what can a forward-thinking business do to recognise the scale of the opportunity from assets that are deemed to no longer be of use?
Introducing the Chief Junk Officer
While the list of new C-suite titles seems to grow longer every year – think of the Chief Visionary Officer, the Chief Happiness Officer and the Chief Experience Officer – it seems that no-one wants to be held accountable for maximising value from these assets that could be utilised for future business success.
In the current business climate, the formula to maintaining a successful business is no longer black or white. As a result of the ever-changing political and economic factors, particularly in a time where Brexit still harbours so many questions, businesses must find alternative methods to grow and meet objectives.
There is no doubt that in the next year or so, from a practical and legislative perspective there will be even more challenges thrown at SMEs. Laws and regulations will be updated to cater to the new wave of trading rules because of leaving the EU.
To tackle this, we’d like to introduce a new title to the C-suite, the CJO – or Chief Junk Officer – a person within the executive team who oversees managing and optimising a business’ assets. By elevating the issue to the boardroom, you will immediately create the accountability needed to solve the challenge and develop a long-term strategy.
What is ‘Junk’?
We need a revised view on what businesses define as junk. The truth is the majority of what businesses see as junk actually does have latent value – it’s just that they haven’t learnt to see it yet. In a world where waste is abundant, it’s vital we remember that one man’s junk is another man’s treasure.
‘Re-preciating’ your assets
At Troostwijk Asset Management, we believe that everything has value. So, rather than thinking about how much an asset has lost in value, businesses should be thinking about how they can ‘re-preciate’ their value.
Our estimate, based on the size of the B2B auction market which is worth around £480m per year in the UK, is that British businesses could be leaving around £1.7bn worth of assets dormant, losing their value for no good reason at all.
This switch in focus would incentivise the Chief Junk Officer to implement a full-asset management strategy, enabling them to fully understand the opportunities available and by providing the executive team with increased visibility of their surplus assets.
The curse of the zombie asset
As it stands, most companies in the UK have not yet implemented a full asset management strategy across their business to take in to account unwanted assets, in large part due to lack of ownership around the issue and where it should sit within an organisation.
Businesses up and down the country, across all sectors and industries, are sitting on billions of pounds’ worth of assets that are depreciating day by day, many of which are not even accounted for on balance sheets until they are eventually moved on or scrapped.
We have termed this as the ‘curse of the zombie asset’ and it has the potential to harm business growth as well as hampering research and development by restricting cash flow.
Timing is everything when it comes to avoiding ‘zombie assets’, so having a strategy in place for the selling process and knowing when to act is essential to ensure all business investment objectives are realised.
We firmly believe that the challenge of asset management is business critical and essential to the future growth, so in the era of the CVO, CHO and CXO, why should they not be joined by the CJO in the c-suite?
Alan Bell is UK MD of Troostwijk Asset Management. Troostwijk is an asset management specialist and the biggest industrial online auctioneer in Europe. Troostwijk prides itself on its international capabilities, connecting vendors with buyers from 127 countries.