Michael D. Moberly August 29, 2017 email@example.com ‘An intangible asset business blog where attention span really matters!
Today, this is an unequivocal economic fact, 80+% of most company’s – business’s value, sources of revenue, competitiveness, and ‘building blocks’ for growth, future wealth creation, and sustainability (large and small) lie in – evolve directly from intangible assets. Not tangible (physical) assets. The intangible assets exist in various forms of intellectual, relationship, and structural capital.
One must conclude, correctly in my view, that proportionately, similarly increasing percentages of business transactions – new business initiatives, again, large or small, will be intangible asset intensive – dependent or otherwise, in play, that is, assets for buying, selling, trading, or some variation.
Intangible assets more recognizable…
As intangible assets become more recognizable insofar as consistently playing integral roles in business, transactions, value creation, and revenue generation, their exposure (vulnerability) to various types-levels of risk elevate. So today, it’s not merely prudent, but rapidly being quite correctly characterized as a fiduciary responsibility for business – transaction management teams to:
• include intangible asset specialists and strategists skilled in the art and science of thwarting and mitigating risk and conducting pre – post transaction due diligence on intangible assets having a bearing on a transaction’s outcome.
• be alert to an ever-increasing volume and sophisticated array of risks to intangible assets which, when – if they materialize, can rapidly undermine and/or erode asset value, competitive advantages, and projected synergies and efficiencies of a projected transaction, and
- cascade throughout any business’s increasingly tentacled consumer – supply chain, or, worse, cause certain intangible asset value ‘to go to zero’!
It’s no longer merely prudent…
Rather, it’s essential, as a fiduciary responsibility, for those undertaking any new business initiative and/or transaction to recognize that in most, if not every circumstance, intangible assets will be in play and impact the outcome. In these and other contexts, I urge business -transaction management teams to include, at the outset, expertise in the array of circumstances in which intangibles are in play (see website definitions, explanations, categories titled, ‘What Are Intangible Assets’). At minimum, intangible asset specialists are professionals possessing skill sets for…
• identifying, unraveling, and safeguarding intangible assets, especially, those identified as being integral to lucrative – competitive transaction outcomes.
• distinguishing transaction risks, which, if materialized, can stifle a deals’ momentum and/or undermine important assets’ projected value, competitive advantages, and synergies.
• articulating relevant-favorable (off-setting, mitigating) modifications to the terms of a transaction when risks are revealed that jeopardize asset projected values, synergies, or expected efficiencies, etc.
• executing effective, yet unobtrusive measures that effect re-negotiated transaction – contractual codicils to ensure retention, control, use, ownership, and monitorability of value and materiality of key assets in both pre, and post transaction contexts.
Ultimately, there is an effective argument to be made that intangible asset strategists and risk specialists today are comparable to industry sector (Wall Street) analysts who assess and monitor relevant variables, e.g., trends, events, cycles, and risks relative to…
• intellectual, structural, relationship, and competitive capital.
• innovation – supply chain pipelines.
• the full range of intangibles relative to their near – long term stability, sustainability, fragility, and volatility.
The premise, of course, is that…
Intangible asset strategists and risk specialists should be early and consistent invitees to every ‘business – transaction planning and decision table’. And, once ‘at the table’, their assessments and recommendations should be given due attention relative to enabling a more secure, stable, competitive, and lucrative transaction as it was initially envisioned.
A person who can read, but, elects not to, is little or no better off than the person who has never learned to read, and can’t.