Michael D. Moberly April 27, 2015 ‘A blog where attention span really matters’!
Experience suggests that substantial percentage of IA (intangible asset) valuations conducted for organizations, irrespective of context, do not provide sufficient managerial (buyer, seller, investor) insight, if it does not…
- fully capture (factor) an organization’s foundational IA’s, i.e., intellectual, structural, relationship, and creativity capital.
Given the increasingly significant role IA’s play in organizations, i.e., 80+% of most company’s value and sources of revenue, etc., lie in – emerge directly from IA’s, I encourage valuations unravel – distinguish organization’s IA’s relative to their individual or collaborative ‘contributory value’, e.g., to a particular project or initiative, a company’s overall mission or its competitive advantages, etc.
With due respect to the valuation community, absent determination and inclusion of assets’ contributory value, conventional (IA) valuations are insufficiently descriptive and too subjective insofar as…
- inspiring management teams’ to seek-achieve operational familiarity with IA’s.
- providing insights to IA’s functionality.
- incorporating IA’s in an organization’s strategic planning.
I’m respectfully confident readers will correct me should I be wrong on this, but there are some five, perhaps more, methodologies for valuing IA’s. Each methodology is variously designed to be context – purpose specific. The product of conventional valuation methodologies frequently deliver only ‘range estimates’ of asset value absent the specificity advocated here.
For horizonal strategists, being provided with a subjective or range of IA valuation data, standing alone, seldom provides sufficient insight to make the most effective business decision. Ultimately, such incomplete IA portraits of organization value leave decision makers holding unnecessary risk and uncertainty with no clear paths for (risk) mitigation.