Archive for March, 2009

Managing Intangible Assets: Fiduciary Responsibilities…

March 31st, 2009. Published under Business Applications, Fiduciary Responsibility, Intangible Asset Value. No Comments.

Michael D. Moberly    March 31, 2009

Increasingly larger percentages of a company’s value, sources of revenue, future wealth creation, and sustainability are rooted in a company’s intangible assets.  Today, the stewardship, oversight, and management of intangibles must be a consistent fiduciary responsibility because:

    there is no other time in the history of company governance when ensuring control, use, ownership, and value of intangible assets and mitigating the attendant (asymmetric) risks is a more direct contributor to achieving growth, profitability, competitive advantages, and sustainability!

    …intangible assets are perishable and generally non-renewable (resources) assets, that is, once they have been compromised, economic and competiive advantage hemorrhaging will commence immediately and globally, therefore

                                                         Why is it…?

1. You can probably pinpoint the precise time of day your desk stapler when missing, but you may be absolutely clueless about the location, origins, stability, fragility, sustainability, or value of your intangible assets and how to put them to use to benefit your company… 

2. You may entrust your most valuable intangible assets, competitive advantages, business practices, and sensitive strategic plans to employees you (only) say hi, goodbye, and thanks to at the office or Kinko’s…

3. Most companies learn about the (real) value of their misappropriated, compromised, infringed, or stolen trade secrets, proprietary know how, intangible assets, and IP by asking legal counsel what their fees will be to try to get them back…

                                                          If you assume…

1. Your most valuble intangible assets, know how, and competitive advantages are protected by computer/IT security, NDA’s, and non-competes, try listening to cell phone conversations in hotel lobbies, airport lounges, or look at your employees’ online resumes’, or merely glance at the laptop screen of the person seated next to you…

2. Your company’s ideas and innovation are adequately safeguarded merely because a patent has been issued; it’s time you learned about (state/corporate sponsored, independant) global data mining, business intelligence, and information brokering operations, or click on www.globalfleamarket.com and see your company’s prototypes and new products in counterfeit form, or click on www.companytradescrets.com and see your ideas, R&D, innovation, and competitive advantages presented-discussed in detail…

3. No one is interested in your company’s strategic planning, client lists, pricing strategies, R&D, and business practices, why are there 19+ university programs in the U.S. and Canada alone, plus hundreds of seminars conducted globally to train people in the art and science of collecting and analyzing business and economic intelligence?

 

‘Unsecured Economies: Protecting Vital Information’ – The Insider…

March 30th, 2009. Published under Analysis & Commentary: Studies, Research, White Pap, Insider Threats. No Comments.

Michael D. Moberly    March 30, 2009
Just how vulnerable are companies to having their proprietary-sensitive information, data, and intellectual property stolen or comprised as a consequence of the current recession? According to McAfee’s recently released report ‘Unsecured Economies: Protecting Vital Information’ the global economic crisis (recession) is quite literally creating a ‘perfect information security storm’ as increased pressures on companies to reduce spending and cut staffing have lead to more porous defenses and increased opportunities for cyber criminals.
It’s certainly not unexpected to learn that the McAfee study found that the current economic stressors will exacerbate security issues for several reasons, one of which is that mass layoffs will incite (influence) a percentage of previously loyal employees to look at criminal activity, e.g., tempt an increasing percentage of financially strapped and laid-off employees to use their corporate data access to steal vital information.
While most security practitioners have known about – recognized such vulnerabilities for years, the fact that McAfee elected to release this report during the 2009 World Economic Forum and title the study ‘Unsecured Economies: Protecting Vital Information’ and devote an entire ‘chapter’ (in the study) to address ‘insiders’, certainly gives credence to the current challenges as well as those that lay ahead with respect to the multitude of risks – threats presented by insiders globally.
Therefore, its not entirely unexpected to learn from the McAfee study that:
– 68% of the respondents now cite ‘insider threats’ as the top threat to vital information, and
– 42% of the respondents cite laid-off employees are the biggest threat caused by the economic downturn, with

– 36% of the respondents conveying ‘worry about the security threat from financially strapped employees’.

‘With more sophisticated technologies at their fingertips and increased access to data, it has become easier for current employees and other insiders, such as contractors, consultants, suppliers, and vendors, to steal information. Data thefts by insiders tend to have greater financial impact given the higher level of data access, and, when combined with the affect of today’s economic realities on IT security spend, this could mean even greater financial risk to corporations’. (Tim Shimeall, Carnegie Mellon University’s CERT/NetSA)

Ultimately, financial information becomes a recognized and sought after currency for employees. It presents much greater incentives (for employees – insiders of all stripes) to steal valuable, proprietary, competitive advantage information and data for (a.) personal financial gain, (b.) to try to improve their job opportunities by ‘peddling’ it to unscrupulous or naïve competitors, or (c.) to literally start companies of their own by using the knowledge and insight they gained (stole) from their former employer.

In addition, the substantial cutbacks in company travel have, for all practical purposes, significantly curtailed or altogether ended on-site visits, inspections, personnel training, and audits for safeguarding a company’s sensitive information assets. We can assume that in many instances, security practitioners are adapting to those realities by de-centralizing and delegating their ’information asset protection and oversight’ role to on-site personnel.

 

 

 

 

 

 

 

Risks – Threats To Intangible Assets From Insiders…

March 27th, 2009. Published under Analysis & Commentary: Studies, Research, White Pap, Insider Threats. No Comments.

Michael D. Moberly     March 27, 2009
Today’s security (information asset protection) practitioners are expressing more concern about ‘insiders’ leaking – compromising sensitive company data that they are about ‘outsiders’ breaking (hacking) in and stealing it according to various current studies and surveys.
In a (soon-to-be-published) survey by ‘Dark Reading’ (a sister publication of Information Week) some of the key findings essentially buck a long time trend among information security practitioners who have devoted a significant portion of their career (up to this point) addressing externally originated attacks to company data and sensitive information, e.g.,
– 52% of the survey’s respondents reported they are more concerned (now) about probabilities of internal data leaks (both accidental and malicious) than they are about external threats…
– but still, 44% of the respondents reported just the opposite, e.g., they’re more concerned with external attacks than internal threats…
Also, reported in the ‘Dark Reading’ survey:
– 59% of the respondents expressed belief that their organizations’ were either (a.) likely, or (b.) bound to be infected in the coming 12 months with malware unintentionally introduced by (internal) employees and/or business partners…
– while 52% said it is likely that an employee will ‘accidentally expose’ sensitive company data/information to outsiders, with
– 36% reporting it is likely that their organizations’ sensitive data/information will be exposed due to loss or theft of a laptop or a portable storage device, and
– 29% expect their IT employees to be caught abusing their access privileges for the purpose of ‘looking at’ sensitive data/information that they are not authorized to see.
A 2008 Computer Security Institute survey reported that:
– 44% of all organizations experienced ‘insider’ abuse of computer system, and
– 42% reported ‘laptop’ theft as (now) constituting an insider threat that is the third most common security event to organizations…
Understanding The Insider Threat’ (another Dark Reading report) found that:
– most ‘insider breaches’ are unintentional and are attributed to employees violating policies, circumventing (security) tools and practices…

In a study conducted by Insight Express and Cisco Systems, it was found that almost 20% of users admitted to altering the security settings on company-issued devices so they could access unauthorized websites;

– 24% of these respondents further admitted to sharing sensitive company information with others, and

– 44% admitted to allowing others to use their company-issued devices without supervision.

In yet another new Dark Reading report titled ‘Well Intentioned Employees – And How To Stop Them’ it was revealed that employees can cause breaches (aside from losing laptops) in many different ways, some without realizing it, e.g., insider breaches attributed to common user errors such as falling prey to phishing scams.

The Ponemon Institute, in their recent study, reported that:

– negligence accounts for 88% of insider breaches, and malicious attacks account for only 12%…

Palo Alto Networks (a firewall vendor) conducted an analysis (of insider threats/risks) to find that the source of several recent high-profile (company sensitive data/information) breaches was due to:

– the growing intentional (employee) disregard of company security policies which most larger firms are finding is unauthorized peer-to-peer application traffic!

 ‘Houston, we’ve got a problem’!!

 

 

 

 

 

And lastly, a survey conducted by Cyber-Ark Software reported that:

– 60% of U.S. workers have (already) downloaded sensitive corporate data in anticipation of (their) future layoff

Interesting, this is approximately the same percentage that terminated employees take (proprietary, sensitive company )data and information with them when they leave as previously reported by the Ponemon Institute study.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Positioning A Company’s Intangible Assets To Maximize Their Value…

March 26th, 2009. Published under Business Applications, Intangible Asset Value. No Comments.

Michael D. Moberly    March 26, 2009

Positioning a company’s intangible assets to maximize (extract as much) value (as possible) is an essential fiduciary responsibility, especially today as 65+% of most company’s value, sources of revenue, and future wealth creation (sustainability) lie in – are directly linked to intangible assets.

To effectively position a company’s intangible assets to maximize their (potential) value requires an understanding of the nuances of intangible assets coupled (aligned) with the skill sets to:

   1.  Examine (assess) pertinent (internal, external) operations – processes – functions of a company to identify where (valuable and perhaps proprietary) intangible assets exist…

   2.  Unravel (assess) the assets’ origins, originators, and development (over time)…

   3.  Determine/assess the assets’ role/contribution to the company, e.g., its overall value, revenue and competitive advantages produced, market position, reputation, image, goodwill…

   4.  Design and put in place (commensurate) best practices and continuity/contingency plans to ensure the assets’ control, use, ownership, and value is ‘monitorable’ and sustainable…

   5. Bundle the assets (when – where feasible) as a foundation for maximizing – strengthening – sustaining their value for the duration of their respective (economic, functional, legal) life cycle relative to the following categories, e.g., those assets that…

           Category A – have a clear value and can be monetized (converted in some manner) fairly rapidly through sale, licensing, bartering, collaborations, alliances, etc…

          Category B –  have a clear value and can possibly be monetized, but only if certain acts (things) occur first, e.g., a license agreement has a clear value, but before that value can be fully realized, it requires negotiations and multiple approvals…

         Category C – are unlikely to bring any value (be monetizeable) for various reasons, e.g., the value of a database, for example, may not be ‘extractable’ due to privacy laws (HIPPA), etc…

         Category D –  have no apparent value other than to the existing owner and no value can be realized even by interaction with other assets, e.g., a celebrity’s personal appearances or endorsement contracts…

        Category E – are unable to be separated from other tangible assets, and ownership interests (of the assets’) is doubtful or pose significant challenges, e.g., an individual’s fame associated with a particular product, etc…                                                                

    (Categories adapted by Michael D. Moberly from the work of Weston Anson)

 

Intangible Asset Management Is Essential To Successful Business Transactions!

March 25th, 2009. Published under Business Applications, intangible assets. No Comments.

Michael D. Moberly   March 25, 2009

An important objective (outcome) to any business transaction today should always be to maximize and extract as much value as possible from the intangible assets in play and/or are part of a deal.  And, because increasingly larger percentages of a transaction’s (company’s) value is rooted in intangible assets, familiarity with, and consistent stewardship, oversight, and management of intangibles should be a key driver because:

1. There is no other time in the history of company governance when ensuring control, use, ownership, and value of intangible assets and mitigating the attendant (asymmetric) risks is a more direct contributor to achieving and sustaining growth, profitability, competitive advantages, and sustainability…

2. In today’s go hard, go fast, go global business (transaction) environment, (a.) slight advances in technology, (b.) minor improvements in production, and/or (c.) small refinements in business processes (each of which constitute intangible assets) can produce substantial competitive advantages…

3. The time frames (space) when the most value can be extracted (realized) from a transaction’s intangible assets is shrinking, due in large part to:

   a.  Unlike patents, trademarks, and copyrights there are no certificates issues by the government that says these are your intangible assets and proprietary competitive advantages, rather it is solely a fiduciary responsibility of each company to identify and adopt best practices to sustain those assets’ control, use, ownership, and value…

    b.  Conventional forms of intellectual property, i.e., patents, copyrights, trademarks, no longer serve as stand alone deterrents to the various global entities that routinely engage in infringement, misappropriation, counterfeiting, and/or theft…

    c.  Intangible asset value is perishable and generally irretrievable (certainly non-renewable), that is, once an asset has been compromised, economic and competiive advantage hemorrhaging will commence immediately and globally…

   d.  Ultra-sophisticated, predatorial, and global data mining and business intelligence operations can instantaneously erode asset value and undermine its competitive advantages…

 

Familiarity With Company Intangible Assets Can Produce Multipliers and Risk Mitigators For Companies!

March 24th, 2009. Published under intangible assets, Looking Forward. No Comments.

Michael D. Moberly   March 24, 2009

All too frequently contributions’ intangible assets make to a company are overlooked, neglected, or outright dismissed, and sometimes obscured by the assets’ (a.) absence of physicality, and (b.) not knowing precisely where and how intangibles ‘fit’ on balance sheets.  With equal frequency, their proprietary and competitive advantage features go unrecognized and certainly undervalued, or not valued at all. 

In most company’s, intangible assets are akin to the proverbial ‘hand in front of our face’. That is, they’re often embedded in (a company’s) routine operations, processes, and functions that, in many instances, tend to fall under the conventional ‘mba – tangible (physical) asset oriented radar’.  Just as frequently, company’s engage in HR and/or othe types of business transactions in which the intangible asset components of those transactions go unnoticed and may never be effectively exploited.

So, why is it beneficial for company c-suite’s, board’s, D&O’s, business unit manager’s, etc., to acquire a familiarity with intangible assets and how will that familiarity produce (translate as) multiplier effects and risk mitigators?  The objective, of course, is to position – exploit a company’s intangible assets in order to extract as much value as possible by:

1. Adding predictabiliy to transaction outcomes by being able to recognize and assess the stability, fragility, sustainability, and defensibility of the assets and their relevance to achieving (a.) projected returns, (b.) competitive market position, (c.) anticipated synergies and efficiencies, and (d.) exit strategies, etc…

2. Elevating the insightful quality of transaction due diligence by recognizing how to rapidly identify and unravel (potentially) valuable – revenue producing assets…

3. Reducing the probability that intangible assets (and IP) will become entangled and/or ensnared in costly time consuming, and momentum stifling legal challenges that can erode and/or undermine asset value, performance, or competitive advantages…

4.  Contributing to building a ‘company culture’ that recognizes – is more attuned to intangible assets, their value, and contributions to sustainability and profitability by treating them as business decisions rather than solely legal processes…

5. Providing a foundation for more effective application of (a.) knowledge management initiatives, and (b.) balanced-scorecard approaches…

6. Providing a strong foundation for aligning continuity-contingency and risk management planning with strategic business objectives…

7. Strengthening the convergence of computer/IT security and intellectual property (protection) enforcements to achieve more timely awareness/pursuit of IP rights violations!

Using Intangible Assets To Weather The Recession – Part V

March 19th, 2009. Published under Analysis & Commentary: Studies, Research, White Pap, intangible assets. No Comments.

Michael D. Moberly   March 20, 2009     (Part 5 of 5 Part Post)

Six things companies can do now with their intangible assets…

While there’s no silver bullet or rabbit to be pulled out of a hat, understanding your company’s intangible assets and recognizing various strategies to (better) utilize, leverage, and extract (more) value from those assets, especially during this financial crisis (recession) is a worthy use of decision makers’ time.

 

1.  Strategic planning for intangible assets, it’s never too late…

Strategic planning processes tend to see all things tangible by focusing on a company’s physical (balance sheet) assets and overlooking (a company’s) internally developed and/or acquired intangible assets.  Today’s management and strategic planning (of intangibles) should include processes to (a.) identify-locate them, (b.) unravel them, (c.) value them, (d.) position them, (e.) leverage them, (f.) sustain (protect, preserve) their control, use, ownership, and (g.) extract value from them. 

 

Omitting intangible assets from strategic planning, given the economic fact that 65+% of most company’s value and sources of revenue lie in – are directly linked to those assets, is the proverbial example of the ‘900 pound guerilla in the room’ that’s being overlooked.

 

2.  Conduct an intangible asset assessment…

A key step to effective strategic planning with respect to intangible assets is conducting an intangible asset assessment.  An intangible asset assessment is not merely a generic version of an IP audit, rather, its an efficient, methodical, and company specific process that identifies, unravels, and values those assets in a manner that brings business insights and clarity to their production, acquisition, positioning, utilization, leveraging, as well as ways to extract value.

 

From a procedural (execution) standpoint, an intangible asset assessment should not rigidly adhere to preconceived views or generic templates.  Rather, the assessment should include specially designed and company specific protocols to respectfully reveal – unravel a company’s, often times, nuanced and embedded procedures, processes, know how, competitive advantages, etc., in other words, the various contexts and formats that intangible assets exist, are produced, and used internally.

 

When conducting an intangible asset assessment there are three key objectives:

 – identify and mitigate risks-threats that elevate the vulnerability of those assets, i.e., circumstances that will ensnare and/or entangle them in costly, time consuming, and momentum stifling legal challenges and disputes that can undermine and/or erode their value and the competitive advantages they produce which can exacerbate a company’s current financial (recession influenced) challenges.

 

align the assets with the company’s core competencies and mission.

 

identify practical, efficient, and relatively immediate strategies to utilize, leverage, and/or bundle the intangibles to lay the necessary foundation for extracting as much value as possible, e.g., sell them, barter them, transfer them, license them, and/or use them to create joint ventures or collaborative relationships, etc., preferably absent circumstances of distress that will adversely affect the assets’ value.

 

3.  Decision makers need to know more about intangible assets…In 2004, Accenture commissioned a survey conducted by the Economist Intelligence Unit in which ‘senior executives from companies around the world were asked to share their views on the management of strategic assets, both tangible and intangible’.  Not surprisingly, 94 of the 120 respondents said that ‘managing intangible assets and/or intellectual capital is an important management issue’.  But, despite this, 95% of the respondents said (in 2004) they ‘do not have a robust system in place to measure the performance of intangible assets, with 33% saying they ‘had no such system in place at all’ even though, nearly half of the respondents said that ‘the stock market rewards companies that invest in intangible assets’.

 

While I understand that each of those executives’ emphasis on measuring the performance of intangibles, equal emphasis should be placed, up front, to aid business decision makers, along with their boards, officers, and business unit managers, to:

 

– recognize precisely what intangible assets really are, i.e., how to identify, unravel, and approximate their value, and

 

the various roles – contributions intangibles make to a company’s overall value, revenue, and future wealth creation which include image, goodwill, reputation, brand, relational capital, and equally important,  sustainability and profitability, and

 

bring greater business and economic clarity to a company’s intangible assets in terms of how they can best be utilized, leveraged, along with strategies to extract as much value as possible.

 

4.  Know the Value of Your Company’s Intangible Assets

Companies should assess their intangible assets’ value using (a.) fragility, (b.) stability, and (c.) sustainability as the primary criteria.  Particular attention should be directed to those assets whose value has already been adversely  (irreversibly) affected by the current financial crisis (recession), i.e., consider-seek opportunities to transfer, license, sell, or barter the assets.

 

Existing valuation techniques are still largely absent the rigor and uniformity which governs the valuation of tangible (physical) assets. Valuation of intangible assets remains somewhat subjective and some techniques express value only in snap-shot-in-time contexts that provide business decision makers with little more than estimates and/or ranges of value.

 

Standing alone, a ‘range of value’ does not necessarily constitute an objective, over-the-horizon picture necessary to make well grounded strategic decisions (regarding the assets, use, positioning, bundling, etc.)  It can ultimately can leave decision makers holding considerable uncertainty (risk).  More specifically, valuations typically do not address – provide adequate insight – perspective regarding the (a.) fragility, (b.) stability, and/or (c.) sustainability of the assets.  Absent that level of insight, a conventional valuation may be little more than speculation.

 

5.  Steps to better management, oversight, and stewardship of a company’s intangible assets in times of financial crisis…

The management, stewardship, oversight, and monitoring of a company’s intangible assets are not passive functions.  Neither should they be delegated (relegated) to the uninitiated who may lack the requisite ‘fire in the belly’ appreciation and understanding of intangibles.

 

At minimum, the stewardship, oversight, and management of a company’s intangible assets should:

 

– integrate awareness programs linked to training and personnel evaluations.

 

– integrate ‘best practices’ related to ensuring the value, use, control, and ownership of intangibles are effectively sustained which includes periodic monitoring (assessment, evaluation, audit)

 

– develop an ‘internal map’ of the company’s intangibles, i.e., producers, location, value, linkages, contributions, status.

 

6. Companies should avoid devoting time and resources trying to sustain assets that have already experienced significant compromise, obsolescence, and/or de-valuation…

That doesn’t necessarily mean the only remaining option is to summarily cast those assets aside for a zero return.  Rather, it means identifying those assets’ remaining value and utilization potential that may still be leveragable, i.e., sell them, barter them, transfer them, license them, hold them, and/or explore ways to bundle them perhaps with other assets, to extract value.

 

Conclusion

What really matters is, there is no other time in company governance history when measuring, managing, and overseeing intangible assets is more necessary, more integral, or more critical to a company’s sustainability, stability, growth, profitability, ultimately, survival during this financial crisis!

 

Using Intangible Assets To Weather The Recession – Part IV

March 19th, 2009. Published under Analysis & Commentary: Studies, Research, White Pap, intangible assets. No Comments.

Michael D. Moberly    March 19, 2009     (Part 4 of 5 Part Post)

Getting intangible assets into the board room…

Getting intangible assets on decision makers’ radar screens and board room agendas in good (financial) times is challenging enough, notwithstanding the very real distractions businesses are experiencing globally with the recession.  And, if your business is one of those that has been notified its credit line has been slashed or cutoff altogether along with your suppliers and accounts receivable, interest in seriously considering how to utilize – leverage intangibles unfortunately, may not receive the (immediate) attention it genuinely warrants.

 

But, all that said, because a company’s value, profitability, market position, competitive advantages and overall sustainability are so inextricably linked to intangible assets, they really should be routine action items now on the agendas of every c-suite, board room, and business unit, for two reasons:

 

1. potential liquidity (value) that’s embedded in the assets…

 

2. sustaining (protecting, preserving) control, use, ownership, and value of those assets for the duration of the recession is an essential component to a quicker and fuller economic – competitive advantage recovery…

Rob McLean wrote a fine piece titled ‘Intellectual Asset Strategy and the Board of Directors’ (IAM December/January 2006), which is especially relevant.  Boards, he says, ‘are frequently drawn into intellectual asset management (intangible asset) issues when there is a crisis’. There’s little question that the current global recession would constitute such a crisis!  But, few boards McLean suggests, ‘deliberately allocate time to intellectual asset issues as a matter of course’. 

I can’t say for sure whether McLean’s references to ‘boards’ were directed to larger, Fortune 500 types of companies or small medium enterprises and multinationals, i.e., SME’s and SMM’s respectively?  While, much of my professional interests tend to be focused on the latter, my experience suggests that boards and senior management in either group still convey insufficient interest in intangibles because, among other things, they’re primarily perceived as legal processes versus fiduciary (business) responsibilities.

With respect to boards’ actually engaging intellectual (intangible) assets, Mr. McLean describes four levels of engagement in which he characterizes boards’ interest in intangible assets…

Level I – are generally unaware of the importance of intellectual (intangible) assets and related strategies relative to company strategy or competitive industry trends…

Level II – may be peripherally aware that intellectual (intangible) assets have some importance in strategy and competitive trends at the company level…

Level III – have a high-level understanding that intellectual (intangible) assets have some importance in strategy and competitive trends at the company level…

Level IV – have a detailed understanding of the role that intellectual (intangible) assets and strategy play in strategic planning at both the company and business unit level…

McLean further suggests (with respect to company boards), that if ‘they are being honest, most would situate themselves at Level I or II’.

For those who find this (passive) characterization of board engagement with intellectual (intangible) assets reflective of their experiences, it should be a ‘wake-up call of sorts’ that however full the managerial/fiscal plate may already be; (a.) stewardship, oversight, and management of intangible assets, and (b.) sustaining – enhancing – leveraging – extracting value from (those) internally produced and/or acquired intangible assets should be permanent fixtures on board (D&O) agendas, even during a recession.

From the board and senior management perspectives, there are three broad, yet quite plausible, starting points to achieve this as pointed out in McClean’s article:

First – consider changes in company governance structure and practices to genuinely reflect and be aligned with the economic fact – business reality that 65+% of a company’s value, sources of revenue, foundations for future wealth creation and sustainability quite literally lie in – are directly linked to intangible (intellectual) assets.

Second – takes steps to ensure the right people receive the right information that allow them to focus on the right areas with respect to the company’s intangible assets.  This includes information and insights related to maximizing, leveraging, and extracting value and other viable strategies aimed at positioning – leveraging those assets to deliver (more) value and competitive advantages.

Third – the underlying/foundational responsibilities for identifying, assessing, and sustaining (protecting, preserving) control, use, ownership, and value of those assets should be a collaborative (enterprisewide) practice that involves intangible asset specialists, legal counsel, security, marketing, risk management, IT, and relevant business units where the intangibles often originate and percolate!

Using Intangible Assets To Weather The Recession – Part III

March 18th, 2009. Published under intangible assets. No Comments.

Michael D. Moberly    March 18, 2009     (Part 3 of 5 Part Post)

If it can’t be measured, it can’t be managed…

Respectfully, business decision makers who engage their work in that time honored ‘if it can’t be measured, it can’t be managed’ approach are likely to harbor some misgivings about the role and contributions intangible assets can and do make toward (a company’s) value, revenue, profitability, sustainability, and their ability to be utilized-leveraged to mitigate the real (in your face) financial risks and challenges prompted by the recession.

 

Confining oneself to conventional ‘mba precepts of, if it can’t be measured, it can’t be managed will also likely dampen a company’s motivation-rationale to take the time necessary to closely examine-assess their intangible assets and devise viable (but perhaps, outside-the-box) strategies to survive the recession (or even prosper) through better positioning, utilization, and leveraging of their intangible assets.  

 

Still, for many decision makers, when they reflect on (consider) their company’s assets, they’re apt to focus on physical (tangible) assets such as property, plants, equipment, cash, accounts receivable, and various types of securities (Nir Kossosvky, Steel City Re).  In other words, attention is focused primarily, if not solely, on those assets that are reported on company balance sheets, e.g., those which banks and creditors are most familiar.  In large part this is due to their realities that intangible assets:

 

1. lack physicality

 

2. are frequently perceived as merely being a subset (addendums) to intellectual property, therefore represent legal concerns, not business decisions 

 

3. have no agreed upon (single) framework (standard) for measuring their financial management, contributions, or effectiveness, thus, are not routine fixtures on company balance sheets.

 

4. are not readily ‘translatable’ as collateral for lending. 

 

For company’s to continue to express a dismissive attitude about the relevance of intangible assets to their (potential) survivability and sustainability insofar as weathering the recession remains common, but, all the more unfortunate given the economic fact – business reality that 65+% of most company’s value, sources of revenue, and future wealth creation (sustainability) lie in – are directly linked to intangible assets!

 

 

 

 

Using Intangible Assets To Weather The Recession – Part II

March 17th, 2009. Published under intangible assets. No Comments.

Michael D. Moberly   March 17, 2009    (Part 2 of 5 Part Post)

When you’re up to your hips in alligators…

I seek not, in any sense, to portray this recession in a comedic context when I say, engaging decision makers now in discussions about intangible assets, is frequently interpreted as one of those ‘when you’re up to your hips in alligators you may have forgotten the original goal was to drain the pond’ situations. 

 

 

In other words, some decision makers’ are expressing less inclination (receptivity) about the management, stewardship, and oversight of the intangible assets their company has developed and/or acquired, e.g., seeking clarity for:

 

 1.   identifying, unraveling, assessing, and valuing their intangible assets

 

 2.  sustaining control, use, ownership, and value of the assets, 

 

 3.   leveraging and extracting value from those assets even when their company may well be

facing financial calamity. 
 
Some decision makers still do not attach priority to their company’s intangibles, or find it a worthy use of (their) time (when they’re up to their hips in alligators) to engage – reflect on intangible assets and consider how to leverage – extract (additional) value from them.  This is interesting when considered in light of the economic fact – business reality that 65+% of most company’s value, sources of revenue, and future wealth creation and sustainability lie in – are directly linked to intangible assets, i.e., intellectual property, brand, reputation, image, goodwill, know how, etc.

 

It is for that reason then, that I say, now may be the perfect time for c-suites, D&O’s, and business unit managers to seriously dig into the intangible assets their companies have produced or acquired.  Now is the time to begin to figure out how those assets can be better managed, utilized, leveraged, and positioned to extract the tremendous value they often hold to try to mitigate the adversities of the recession versus assuming a ‘fire sale’ mentality, i.e., selling those assets under highly distressed conditions at perhaps a fraction of their value, or worse, ceasing to exist because one assumed no other viable (less lethal) options were available.