Archive for March, 2013

Intangible Asset Produce Multiplier Effects Value Propositions

March 21st, 2013. Published under Intangible asset strategy, Intangible asset training for management teams.. No Comments.

 Michael D. Moberly    March 21, 2013    ‘A blog where attention span matters’.

For many business management teams and decision makers, when the term ‘multiplier’ (effect) is used, it frequently conveys an economic context and/or outcome and seldom eludes to management team behaviors or actions, i.e., one’s that influence the pursuit of new, or at least different ways of thinking.

Different ways of thinking include executing a process, an initiative, or utilizing/exploiting assets differently than what’s been done previously.  The objective of course is, by doing so, will lead to (more) efficient and effective use, in this instance, of intangible assets, i.e., intellectual, relationship, and structural capital, etc., to achieve a more favorable economic, competitive advantage, and/or market position.

Achieving favorable economic, competitive, and market outcomes may be less likely to occur had those behaviors – actions of management teams and other decision makers not been influential as ‘intellectual multipliers’.  Intellectual multipliers can represent either significant or relatively subtle changes to business operations and/or transactions that create efficiencies, elevate effectiveness, identify new opportunities, etc., which, of course, lay foundations for positive and lucrative outcomes.

For example, the ‘multiplier effects’ described below, can be the product of management teams’ acquiring an intellectual, operational, economic, and competitive advantage familiarity with intangible assets.  That familiarity can influence – produce, in numerous instances, enterprise wide multipliers, e.g.,

  1. Kick start strategic planning to achieve more complete utilization – exploitation of intangible assets and IP…
  2. Elevate fiduciary appreciation      for the stewardship, oversight, and management (S.O.M.) of company portfolios of intangible assets and intellectual property…
  3. Contribute to aligning financial – risk management planning with (intangible) asset safeguards and  a company’s core – strategic objectives by having practices in place to  sustain control, use, ownership, and monitor asset value, materiality, and risk…
  4. Facilitate more timely (aggressive) pursuit of intangible asset – intellectual property rights violations, i.e., compromises, infringement, misappropriation, etc…
  5. Provide foundation for developing business organizational resilience (continuity and contingency) planning for intangible assets, IP, and proprietary competitive advantages to achieve quicker and more complete economic recovery during and following a significant business disruption or disaster…
  6. Add – bring consistency to accounting by (a.) describing intangible assets in revenue conversion formats, and (b.) representing intangible      assets commensurate with Sarbanes-Oxley and FASB Statements…
  7. Elevate company’s public stature, i.e., reputation and image among its customers, suppliers, investors, and other stakeholders      that can attract attention of ‘audiences’ well beyond a company’s traditional market – industry sector…
  8. Strengthen the interface (convergence) with (a.) IT-computer safeguards and practices, (b.) knowledge management programs, and (c.) balanced scorecard initiatives…
  9. Distinguish assets relative to their (a.) contributory value, (b.) life, value, functionality cycles, and (c.) facilitates more reliable quantifying – qualifying asset performance…
  10. Provide more efficient and effective use of IP counsel and allocation of IT and information security resources…
  11. Serve as leverage points in negotiating IT and IP insurance coverage and premiums…

Each blog post is researched and written by me with the genuine intent they serve as a useful and respectful medium to elevate awareness and appreciation for intangible assets throughout the global business community.   Most of my posts focus on issues related to identifying, unraveling, and sustaining control, use, ownership, and monitoring asset value, materiality, and risk.  As such, my blog posts are not intended to be quick bites of information piggy-backed to other sources, or unsubstantiated commentary.  Comments regarding my blog posts are encouraged and respected. Should any reader elect to utilize all or a portion of any of my posts, attribution is expected and always appreciated. While visiting my blog readers are encouraged to browse other topics (posts) which may be relevant to their circumstance or business transaction.  I always welcome your inquiry at 314-440-3593 or m.moberly@kpstrat.com

Intangible Asset Safeguards’ Compelling Business Case

March 20th, 2013. Published under CFO's, Fiduciary Responsibility, Intangible asset protection. No Comments.

Michael D. Moberly   March 20, 2013   ‘A blog where attention span matters’!

A prudent and routine requisite to new business initiatives is that a ‘compelling business case’ accompany all such proposals.  The term ‘business case’ generally speaking, should be normative in content and context, e.g., incorporate projections of (a.) return-on-investment, (b.) margins, (c.) marketing, (d.) pricing, and (e.) sustainability, etc., not necessarily in that order.

With respect to the still relatively new practice of safeguarding intangible assets, a key starting point for management teams, c-suites, and boards is recognition – acceptance of the economic fact that 65+% of most company’s value, sources of revenue, and ‘building blocks’ for growth, sustainability, and profitability lie in – evolve directly from the intangible assets a company produces, acquires, and possesses.

Below represents my views – perspectives of key components/elements for building a compelling business case for putting in place effective practices to safeguard a company’s intangible assets!

For starters, let our attention be drawn to the business realities associated with we live, work, and conduct business (transactions) in (a.) an increasingly aggressive, competitive, and predatorial (global business) environment, and (b.) a global (business) economy exists, largely driven by knowledge, knowhow, and other intangible assets such as intellectual property, brand, and reputation.  That’s undisputed.

In this regard, a compelling business case for safeguarding intangible assets should, at minimum…

A.    A demonstration of ways to quantify ‘return on security/safeguard investment’, i.e.,

  1. how to effectively articulate intangible asset safeguard (IAS) services to decision makers in ways that they (1.)      readily understand, (2.) are more receptive to, and (3.) build credibility with IAS practitioners
  2. elevate decision maker receptivity to a business case, by positioning IAS practitioners as business professionals first, and IAS practitioners, strategists, analysts, researchers, and educators second

B.  Demonstrate (articulate) precisely what the organization/company can expect to receive, i.e.,  benefits, by describing how and when stages in which ‘net present value’ will be realized for the organization, i.e.,

  1. decrease asset fragility
  2. elevate asset stability
  3. elevate (as multiplier effects) organization integrity and customer/client confidence

C.  Avoid focusing on conventional risks and threats contexts or formats, i.e., identify, assess, mitigate using the conventional ‘FUD’ approach, i.e., highlighting fear, uncertainty, and doubt. Rather, the business case should demonstrate:

  1. how it fills an existing process-procedural void
  2. how it enhances – strengthens an existing process-procedure
  3. that it’s not merely a duplication or new twist to an existing service or procedure

D.  Reflect (incorporate) an organizations’ culture and operating characteristics in terms of key factors – drivers of decision makers’ receptivity to new (additional) initiatives.

E.  Demonstrate how IAS’s can effectively influence conventional perspectives of business risk taking by preventing – mitigating losses and/or depreciation in the assets’ contributory value or as sources of revenue, and that intangibles and competitive advantages should no longer be:

  1. accepted as ‘just another risk of doing business’ which organizations may knowingly or inadvertently assume as preludes to developing new markets or products.
  2. characterized as probabilities, rather as inevitabilities if effective IAS’s, risk assessments, and due diligence has not preceded every transaction…

F.  Know precisely, in ‘return on security investment’ terms:

  1. what should-must be measured
  2. how it  is to be measured
  3. when it can be measured (especially relative to the life-value cycles of  the assets that are the subject of the risk assessment – due diligence…

G.   Avoid portraying IAS’s as merely a snapshot-in-time process. IAS’s should be flexible and self adjusting as circumstances warrant, i.e., as asset value – functionality – risk cycles change or fluctuate.

H.   Consider including intangible asset reporting (risk, accounting, materiality breach) mandates in Sarbanes-Oxley and FASB (141, 142) should be integrated into IAP business cases by demonstrating how IAP services can be aligned with those mandates to achieve – bring additional efficiencies and effectiveness, i.e.,

  1. Merely developing (quantitative) risk equations may add little, if any value unless-until those equations are and/or can be linked (tied) to the organizations’ strategic planning and regulatory mandates it must abide by, i.e., SOX, FASB, etc.
  2. Identifying – describing ‘particular indicators (practices, activities, etc.) known to elevate an organizations’ vulnerability – probability that their IP, intangible assets, and/or proprietary competitive advantages may be challenged or contested

I.   Draw attention to our professional role as intangible asset strategists to not to impede or necessarily stop a transaction, rather to:

  1. facilitate and enable more secure, sustainable, and lucrative transactions
  2. elevate the probability that when a deal and/or exit strategy is being planned and executed the value of an organizations’ intangible      assets, proprietary competitive advantages, and IP will remain stable and      intact.

 Each blog post is researched and written by me with the genuine intent they serve as a useful and respectful medium to elevate awareness and appreciation for intangible assets throughout the global business community.  Most of my posts focus on issues related to identifying, unraveling, and sustaining control, use, ownership, and monitoring asset value, materiality, and risk.  As such, my blog posts are not intended to be quick bites of information piggy-backed to other sources, or unsubstantiated commentary. Comments regarding my blog posts are encouraged and respected. Should any reader elect to utilize all or a portion of any of my posts, attribution is expected and always appreciated. While visiting my blog readers are encouraged to browse other topics (posts) which may be relevant to their circumstance or business transaction.  I always welcome your inquiry at 314-440-3593 or m.moberly@kpstrat.com

Intangible Assets Beat The Odds Of Theft

March 18th, 2013. Published under Intangible asset protection, Intangible Asset Value. No Comments.

Michael D. Moberly   March 18, 2013    ‘A blog where attention span matters’.

It’s in every company’s interest, if not responsibility, to have practices – procedures in place now that are geared toward ‘beating the odds’ that their valuable, revenue and competitive advantage producing intangible assets will be vulnerable – fall prey to adverse acts/events, i.e., infringement, misappropriation, and counterfeiting.

Unlike other forms of intangible assets, i.e., intellectual property (patents, trademarks, copyrights) there is no certificate issued by the government to a company and/or asset holder that says…

  • these are your intangible assets, i.e., proprietary competitive advantage driving intellectual, structural, and relationship capital as well as other forms of unique and/or specialized know how
  • sustaining control, use, ownership, and monitoring (asset) contributory value, materiality, and risk falls exclusively to company/organization management teams in the form of a fiduciary responsibility.

Too, conventional forms of IP (intangible asset) enforcement, i.e., patents, trademarks, copyrights, and trade secrets are certainly less relevant today insofar as constituting markers of value or long term profitability.  True, patents, trademarks, and copyrights remain requisites for conveying ownership and standing to address disputes and challenges, these enforcement mechanisms do little in the way of representing a deterrent favorably changing the vulnerability, probability, and criticality risk equation relative to today’s increasingly competitive, predatorial, and ‘winner take all’ global business transaction environment.  Intangible asset and IP misappropriation, infringement, and/or counterfeiting is now culturally and economically embedded in many countries’ GDP.

Once a company’s assets are gone, they’re probably gone forever.  In large part that’s because core asset value and competitive advantages can be quickly identified and extracted from assets that have been compromised and instantaneously disseminated to a global labyrinth of information brokers, infringers, and counterfeiters, which may include economic-competitive adversaries.  Compromised assets, and their value, are often, worst case irreplaceable and irretrievable.

With respect to the valuation of a company’s IP, intangible assets, and (proprietary) competitive advantages, etc., it is unwise, in my judgment to consider value to be static or not susceptible to countless risk and market influenced fluctuations.  In my view, management teams should exercise respectful skepticism and caution about accepting (asset) valuations which are framed – produced in ‘snap-shot-in-time’ contexts.  It’s important to recognize assets’ (contributory) value can fluctuate and seldom, in my view, remains static for indeterminate periods.  Aspects that we certainly know for sure are that once an asset has been compromised, economic and competitive advantage hemorrhaging can (a.) commence immediately, (b.) it will be global, and (c.) very costly and time consuming to stop or reverse.

Of course, management teams, c-suites, and boards are obliged to recognize these economic – competitive advantage realities through the lens that 65+% of most company’s value, sources of revenue, and ‘building blocks’ for growth, profitability, and sustainability lie in – evolve directly from intangible assets they produce internally or acquire externally.

The key takeaway here for management teams is to avoid treating intangible assets as being readily or easily renewed.  To bring clarity to this view, let’s very respectfully review some basics!

An idea, by definition, exists solely in one’s mind, where it remains relative secure, but not terribly useful unless and until it is effectively articulated in a business (commercialization, monetization, and marketing) context.   An obvious requisite to monetizing and commercializing an idea is that it must, at some point, usually in its earliest stage of development, be expressed, presumably to trusted others, and therein lies the starting point for experiencing vulnerabilities, risks, and challenges (to the idea as a potentially valuable intangible asset) to the originators, holders, and/or owners.

Fundamentally, the protection of ownership rights to ‘products of the mind’ represents a basic social contract between society, its government, and the individual(s) who created the idea. (Choate, p.218)

Today, the risks to intangible, particularly intellectual, structural, relationship capital, and reputation assets are globally asymmetric, change rapidly, and, when they occur, can instantaneously stifle, undermine, and/or substantially erode…

  • competitive  advantage – economic momentum
  • specific transactions or strategic business plans
  • an assets’ value and projected (future) profitability.

Of course, this is particularly relevant to the rapidly rising numbers of companies globally which are increasingly reliant on and would be quite correctly considered ‘intangible asset intensive’ companies.

In the pre-Internet era, when intangible asset compromises occurred, usually template-based business continuity – contingency plans were executed with emphasis on containing the damages and/or extent of the loss.  Today, however, while containment may be admirable, it does not reflect the speed in which (intangible, non-physical) assets can be surreptitiously acquired and disseminated.  And, once an asset has been compromised, a strategy based on containment, in the conventional sense, is seldom a viable option.  That’s largely because dissemination – distribution of illicitly acquired assets is now measured in seconds and minutes, not days, weeks, or months.  In other words, intellectual, structural, and relationship capital, explicit know how and competitive advantages can be acquired and manifest as products and/or services and infect, i.e., appear in heretofore legitimate global supply lines in extraordinarily abbreviated periods of times.

Today, the contributory value and competitive advantages embedded in those intangible assets researched and targeted by global cadres of economic and competitive advantage adversaries can be quickly discerned and extracted, whole, or in part and instantaneously distributed to a global labyrinth of extraordinarily skilled and organized information brokers, counterfeiters, and/or economic-competitive adversaries, including state and non-state actors.

So, again, while conventional intellectual property enforcement mechanisms, i.e., patents, trademarks, and copyrights remain the mainstay for distinguishing ownership and standing for responding to (legal) disputes, challenges, and array of other risks, the fact is, they’re reactive and require self-policing.  In addition, the deterrent features those mechanisms are presumed to bring to their holder, remain, are, in my experience, misunderstood and worse, utterly ignored and circumvented by global cadres of infringers and misappropriators.

There are few credible (strategic) indicators – evidence that the current trends of global (intangible) asset infringement, product counterfeiting, and misappropriation subside.   With this perspective, I suggest that prudent and forward looking – thinking management teams should duly reflect on the potential obsolescence of conventional intangible asset enforcement mechanisms as representing the primary instruments to effectively safeguard intangible assets.  After all, intangible assets will be – are in play and integral to most every business transaction!

Let’s be clear though, I am not suggesting that conventional intangible asset enforcements should be eliminated.  However, the reality is that the once respected rights and protections afforded to innovators and entrepreneurs (through patents, trademarks, and copyrights, Article I, Section 8, U.S. Constitution) are now being routinely outpaced, circumvented and disregarded globally.  Any assumption today, and for the foreseeable future that the issuance of a patent, will serve as a standalone deterrent (i.e. inhibit infringement or misappropriation) and otherwise be sufficient for the rightful holder to sustain full control, use, and (asset) ownership rights, is unfortunately, a not-so-credible business reality.

Each blog post is researched and written by me with the genuine intent they serve as a useful and respectful medium to elevate awareness and appreciation for intangible assets throughout the global business community. 

Most of my posts focus on issues related to identifying, unraveling, and sustaining control, use, ownership, and monitoring asset value, materiality, and risk.  As such, my blog posts are not intended to be quick bites of information piggy-backed to other sources, or unsubstantiated commentary.

Comments regarding my blog posts are encouraged and respected. Should any reader elect to utilize all or a portion of any of my posts, attribution is expected and always appreciated. While visiting my blog readers are encouraged to browse other topics (posts) which may be relevant to their circumstance or business transaction.  I always welcome your inquiry at 314-440-3593 or m.moberly@kpstrat.com

Intangible Asset Risk Officer

March 14th, 2013. Published under Intangible asset protection, Managing intangible assets, Value Propositions. No Comments.

Michael D. Moberly    March 14, 2013    ‘A blog where attention span matters’.

As conveyed numerous times in this blog; underlying the stewardship, oversight, and management of a company’s intangible assets is board, c-suite, and management team recognition that practices must be in place to sustain (protect, preserve) control, use, ownership, and monitor asset value, materiality, and risk.

In my view, there are no particular priorities attached to these tasks (responsibilities) but, I’m increasingly confident that if any aspect is dismissed, overlooked, neglected, or otherwise does not occur, or fails, little else may matter, because asset value and the competitive advantages being produced/delivered will quickly be undermined, compromised, or stolen with asset value ‘going to zero’!  And that readers, is attributable to the increasingly aggressive, globally predatorial, and ‘legacy free’ business transaction environment that is so prevalent.

To remedy or preferably prevent such calamities which can, in more instances than are publicly reported and understood, amount to financial catastrophes or collapses because they’re often irreversible and/or very costly for a victim company to return to a state of revenue generation normalcy and competitive advantage position.  In other words, once intangible assets have been compromised, having available (or, at least knowing) an intangible asset risk specialist may be worth considering if not become a (fiduciary) requisite.

Should there be hesitancy, reluctance, or worse, the feeling of invincibility by company decision makers, it’s important to remember the global economic fact that 65+% of most company’s value, sources of revenue, and ‘building blocks’ for growth, profitability, and sustainability today lie in – evolve directly from intangible assets!  The compromise of one (key, contributory intangible asset) may well prompt adverse cascading (reputation risk) affects throughout an enterprise and its stakeholders.

To be sure, an intangible asset (risk) specialist, familiar with the ever expanding array of sophisticated, globally asymmetric, costly, and momentum stifling types of risks that adversely affect intangible assets when materialized, would bring measurable ‘ROI’ (benefits) some of which include…

  1. Developing a strategic plan to monitor asset risks, value, and materiality changes in accordance with assets’ respective value and functionality cycle.
  2. Adding predictability to business transaction outcomes, projected returns, and anticipated exit strategies when intangibles are in play and/or part of a deal by assessing their stability, fragility, defensibility, and vulnerability.
  3. Conducting specialized market entry and/or transaction due diligence assessments regarding the intangible assets in play, in both pre – post transaction contexts.
  4. Reducing the probability that project/deal momentum will be stifled by recognizing and mitigating circumstances that can (a.) ensnare and/or entangle the assets in costly and time consuming legal challenges, (b.) undermine/erode asset value and performance, (c.) adversely affect asset reputation ‘risk points’, i.e., product- service quality expectations of consumers and other stakeholders.
  5. Building an ‘risk intelligent company culture’ for intangible assets that converges with a company’s business objectives.
  6. Designing and executing comprehensive organizational resilience (continuity, contingency) plans that encompass mission critical intangible assets in order to preferably produce quicker recovery of asset value, revenue production, and market position, etc., following significant business disruptions or disasters.
  7. Monitoring (internal, external) intangible asset value chains, i.e., the inter-connectedness between the production, acquisition, and utilization of intangibles vis-a-vis their contributions to company value, revenue, and creating and sustaining competitive advantages.
  8. Providing on-going guidance to business units and management teams regarding effective stewardship, oversight and management of intangibles relative to identifying, unraveling, bundling, and extracting value and delivering competitive advantages.

The contributory value of intangibles (to company revenue, future wealth creation, and sustainability) continues to rise as intangibles have become increasingly integral to knowledge-intensive industries operating in global knowledge-based economies.  These interacting economic and intellectual, structural, and relationship capital phenomena consistently put intangibles, quite literally, in play and, ‘at risk’ in most very business transaction and/or activity.

Each blog post is researched and written by me with the genuine intent they serve as a useful and respectful medium to elevate awareness and appreciation for intangible assets throughout the global business community. 

Most of my posts focus on issues related to identifying, unraveling, and sustaining control, use, ownership, and monitoring asset value, materiality, and risk.  As such, my blog posts are not intended to be quick bites of information piggy-backed to other sources, or unsubstantiated commentary.

Comments regarding my blog posts are encouraged and respected. Should any reader elect to utilize all or a portion of any of my posts, attribution is expected and always appreciated. While visiting my blog readers are encouraged to browse other topics (posts) which may be relevant to their circumstance or business transaction.  I always welcome your inquiry at 314-440-3593 or m.moberly@kpstrat.com

Intangible Asset Training Management Teams

March 12th, 2013. Published under Intangible asset training for management teams.. No Comments.

Michael D. Moberly   March 12, 2013    ‘A blog where attention span matters.’

Achieving operational familiarity with company’s intangible assets will lead to improvements in economic and competitive advantage health!

While intangible assets represent the dominant drivers of most company’s economic and competitive advantage health and value, if they are dismissed or neglected by company management teams, there is a substantial, perhaps I should say very real, probability that  initiatives such as new project launches, competitive advantages, marketing programs, and strategic planning will be stifled, undermined, or certainly produce less than their potential, with asset value eroding quickly or worse, ‘go to zero’!

Conventional financial statements do not provide management teams with a complete or necessarily clear picture of a company’s fiscal soundness absent inclusion of intangible assets.  This is especially relevant in today’s increasingly knowledge (intangible asset) dominant business (transaction) global economy in which it’s an economic fact that 65+% of most company’s value, sources of revenue, and ‘building blocks’ for growth, sustainability, and profitability lie in – evolve directly from intangible assets.

Management teams’ continued reliance on conventionally framed financial statements that are largely absent reference to intangibles contributes to sustaining a sense of skepticism, dismissiveness, and reluctance about the economic fact that the real sources and drivers of most company’s value and revenue today evolve directly from assets that are seldom, if ever reported on financial statements, other than in the form of goodwill!

True enough, conventional financial statements describe whether or not financial targets are being achieved, etc. In that context, they remain relevant, but agin, they simply don’t convey the whole story (picture) about a company’s status or its’ potential with respect to the production and exploitation of intangible assets.

In fairness, conventional financial reports were not designed to capture qualitative aspects, vital signs, and/or indicators that we now know are directly related to businesses success, i.e., those found – embedded in a company’s intangible assets.   Today, tracking and monitoring the performance of a company’s intangible assets is not a time-resource luxury applicable only to Fortune ranked companies, rather it’s a necessity and fiduciary imperative for most every company including SMM’s (small, medium multinationals) SME’s, (small, medium enterprises) start-up’s, university-based spin-off’s as well as maturing firms.

The business prudence of striking a better balance between the stewardship, oversight, and management, i.e., S.O.M., of tangible vs. intangible assets can produce benefits and multiplier effects that will favorably cascade throughout an enterprise.

There are a number of factors in play today that should be influencing management teams to pay more attention to monitoring (indicators of) intangible asset performance, irrespective of company size, maturity, or industry sector.  These factors include, among others,

  • increasingly aggressive and predatorial global competition.
  • the growing connection between a company’s intangible assets, stakeholders, its value-supply chain, and company profitability and sustainability.
  • a heightened respect for the risks to and value of a company’s reputation (image, goodwill).
  • accelerated innovation, product development, and launch times .
  • the geographically boundary-less speed which information (intangible assets) can be developed, acquired, and disseminated, and
  • increasing government regulatory emphasis (globally) on reporting and measuring (accounting) the value, performance, and materiality of intangible assets.

Each blog post is researched and written by me with the genuine intent they serve as a useful and respectful medium to elevate awareness and appreciation for intangible assets throughout the global business community. 

Most of my posts focus on issues related to identifying, unraveling, and sustaining control, use, ownership, and monitoring asset value, materiality, and risk.  As such, my blog posts are not intended to be quick bites of information piggy-backed to other sources, or unsubstantiated commentary.

Comments regarding my blog posts are encouraged and respected. Should any reader elect to utilize all or a portion of any of my posts, attribution is expected and always appreciated. While visiting my blog readers are encouraged to browse other topics (posts) which may be relevant to their circumstance or business transaction.  I always welcome your inquiry at 314-440-3593 or m.moberly@kpstrat.com

Intangible Asset Training Produces Multipliers

March 11th, 2013. Published under Intangible asset training for management teams.. No Comments.

Michael D. Moberly   March 11, 2013    ‘A blog where attention span matters’!

The following are examples of valuable and immediately useful/beneficial multipliers that a well designed and thoughtfully and respectfully executed intangible asset awareness (training) program can produce for management teams, c-suites, project managers, and boards.

Reduce uncertainty and adding predictability to operations and transactions by (a.) incorporating the necessity to monitor asset value, stability, fragility, and defensibility relative to (a.) achieving projected returns, competitive-market/sector position, and creating synergies/efficiencies…

Identify potential new market entry opportunities by rapidly and efficiently distinguishing revenue producing intangible assets…

Reduce probability that intangible assets will become entangled and/or ensnared in costly and time consuming legal challenges that impede project/company growth, momentum and/or erode – undermine asset value, competitiveness, and performance…

Contribute to building an enterprise wide intangible asset (risk intelligent) company culture that recognizes-appreciates asset value and the various risk – threat environments …

Provide a foundation for developing stronger – more effective organizational resilience (business continuity/contingency planning) to include intangible assets and competitive advantages should (when) certain risks/threats materialize.

Distinguish intangible assets relative to their respective life, value, and/or functionality cycles…

Recognize the growing global universality of regulatory mandates regarding accounting and reporting the value, materiality, and financial performance of intangible assets…

Recognize that patents alone are no longer reliable indicators of company value, transaction predictability, or serve as a effective deterrents or safe harbors to infringement or misappropriation…

Extract and/or leverage more value from intangible assets in business transactions…

Forge stronger relationships with legal counsel, auditors, and accountants on all matters related to intangibles.

Strengthen convergence with:

  • knowledge management programs
  • balanced scorecard initiatives
  • Sarbanes-Oxley compliance

Provide more efficient and effective use of legal counsel and IT resources…

Align a company’s business practices and external (business) transactions with risk assessment, asset management, (pre-post) due diligence, and strategies to sustain or enhance asset value…

  • foster an enterprise wide (risk intelligent) culture that recognizes – respects the value of critical (core) intangible assets relative to their proper handling, protection, preservation and facilitates asset monitoring undermining, and asset value dilution.
  • elevate awareness, alertness, and accountability for identifying and communicating significant risks, threats, and challenges (related to intangible assets, IP, and proprietary competitive advantages, etc.) in business transactions before irreversible ‘economic hemorrhaging’ can occur…

Bring consistency to business accounting and auditing by:

  • describing intangible assets in revenue conversion formats, and
  • representing intangible assets commensurate with Sarbanes-Oxley

Elevate company’s stature and goodwill among its customers, suppliers, and investors and gain attention of audiences beyond a company’s traditional markets…

Strengthen confidence in outcomes in business transactions by:

  • focusing on enabling – facilitating stronger, more secure and profitable  transactions, not impede them.
  • demonstrating how to unravel and assess the status, stability, fragility, and defensibility of the assets relative to meeting terms, objectives, projected returns, and exit strategy.
  • sustaining necessary control, use, and ownership over the assets in both pre and post transaction contexts.

Elevate understanding about strategies to prevent, counter, and/or mitigate current and emerging risks, threats, and vulnerabilities to intangible assets and competitive advantages by:

  • providing practical and business oriented insights that extend beyond conventional audits or business valuation checklists.
  • identifying a range of events or circumstances that can impair, erode, and/or undermine asset value.

Enable equity of voice and range of choice regarding the stewardship, oversight, and management of IP, intangibles, and/or proprietary competitive advantages.

Identify techniques for structuring business operations – transactions to:

  • sustain the contracted levels of control, use, ownership, value and brand integrity of the assets
  • mitigate the undermining – erosion of projected competitive advantages, synergies, profitability and/or entanglement of intangible assets in costly, time consuming disputes and challenges that disrupt transaction momentum.

My blog posts are researched and written by me with the genuine intent they serve as a worthy and respectful venue to elevate awareness and appreciation for intangible assets throughout the global business community.  Most of my posts focus on issues related to identifying, unraveling, and sustaining control, use, ownership, and monitoring asset value, materiality, and risk.  As such, my blog posts are not intended to be quick bites of information, unsubstantiated commentary, or single paragraphed platforms to reference other media. 

Comments regarding my blog posts are encouraged and respected. Should any reader elect to utilize all or a portion of any of my posts, attribution is expected and always appreciated. While visiting my blog readers are encouraged to browse other topics (posts) which may be relevant to their circumstance or business transaction.  I always welcome your inquiry at 314-440-3593 or m.moberly@kpstrat.com

Cyber Attacks…Nothing Particularly New!

March 6th, 2013. Published under Cyber security, cyber warfare., Economic Espionage. No Comments.

Michael D. Moberly   March 6, 2012   ‘A blog where attention span matters’!

Is there really anything particularly new here…

Being as respectful as I’m able to the purveyors of this ‘certainly nothing new here’ message, which appears to be largely originating from various government agency spokespersons as well as, let’s call’em what they are, computer/IT security firms.

Frankly, I tend to hold the view that when ‘consistent messaging’ originates ‘inside the beltway’ and makes its way to the countless media mediums, it is for a reason.  That is, there is usually a motive(s), sometimes good, sometimes not-so-good underlying the message.

In the case of the current proliferation of ‘cyber attack’ messages, for those of us who have had our respective ears to the ground on such matters for years, the messages we’re now hearing come as no particular surprise.  Rather, they’re more akin, at least in my view, to ratcheting up a quite natural progression of economic and competitive advantage ‘attacks’ which now carry, due in large part to the globally universal reliance on and functionality of IT and computer systems embedded throughout our most critical national infrastructures as well as the most mundane kitchen appliances.

The difference is, today’s intrusions potentially produce more grave, cascading, and far-reaching adverse consequences.

An agricultural metaphor…

What I find disappointing though about these messages and their purveyors is that many seem to adhere to the axiom that the best technique to create rapid and wide-spread attention necessary to influence public opinion and obtain supportive responses and/or reactions is to (a.) express the acts’ potential criticality through worst case scenarios, (b.) direct the message to the most fertile ground, i.e., audience, (c.) plant that ground with ‘FUD’ seeds, i.e., fear, uncertainty, and doubt, and then (d.) elicit rapid growth fertilization of those seeds, from IT/computer security firms, many of which heretofore would have, been extremely reluctant, if not prohibited from naming their clients or publicly espousing their findings.

In most circumstances which I’m familiar, companies who engage outside IT/computer security and forensic investigation services do so with strict confidentiality and non-disclosure agreements in place.  That’s because the adverse reputation risks and stakeholder responses such publicity would instantaneously spark if adverse findings became public may prompt more significant and longer lasting economic and competitive advantage challenges than the adverse acts themselves.  That’s certainly not to suggest I am advocating silence on such issues.  Rather, in many instances, the actual impact and losses associated with illicit and/or illegal intrusions are generally difficult to measure and/or quantify in dollar terms, aside of course from consumer and market reactions.

Clarity…

Let’s try to bring some clarity to this issue.  First of all, these intrusions are taking place, To that, there is absolutely no argument.  It’s just they’re occurring with more frequency and greater intensity and sophistication which collectively allows them to evade many conventional and even some of the state-of-the-art detection and repulsion systems.

Secondly, let’s be clear, regardless whether the intruders are state or non-state actors, over-zealous DEF CON’s, or high school prodigies, it’s not solely the intellectual property (IP) being sought.  By that I mean it does not require a Juris Doctor (law) degree to understand that IP consists of patents, trademarks, copyrights, and trade secrets.

Having studied and investigated a range of economic espionage, issues for 20+ years, i.e., the Economic Espionage Act, since it was rolled out in 1996, I personally and professionally hold the view that it’s bordering on a disservice, if not utterly misleading to characterize this issue as being solely about – directed to the theft of U.S. companies’ IP.  After all, patents are registered with the U.S. Patent and Trademark Office and once issued they’re reported in the public domain, so certainly no secrets there.

As this issues regularly reaches the agenda of c-suites, boards, and management teams and they become more personally apprised and engaged in this inevitable, progressive, and persistent challenge, I want them to recognize it may more likely be the ‘proprietary know how’ and other intangible assets the adversaries are seeking, not necessarily their company’s intellectual property per se.  Of course, intrusions are executed for a variety of reasons, among them being reconnoitering a system’s defenses and seeking undetectable paths to proceed as far possible to eventually access what they’re after.

Glad someone is taking notice…

So ultimately, whether the ‘bad guys’ are state/non-state actors engaging in economic espionage, or whether the acts are consummated through human elicitation – solicitation techniques or willing (insider) participants, and/or ultra-sophisticated cyber technologies it remains nothing particularly new.  But, I’m sure glad someone is now is taking notice!

My blog posts are researched and written by me with the genuine intent they serve as a worthy and respectful venue to elevate awareness and appreciation for intangible assets throughout the global business community.  Most of my posts focus on issues related to identifying, unraveling, and sustaining control, use, ownership, and monitoring asset value, materiality, and risk.  As such, my blog posts are not intended to be quick bites of information, unsubstantiated commentary, or single paragraphed platforms to reference other media. 

Comments regarding my blog posts are encouraged and respected. Should any reader elect to utilize all or a portion of any of my posts, attribution is expected and always appreciated. While visiting my blog readers are encouraged to browse other topics (posts) which may be relevant to their circumstance or business transaction.  I always welcome your inquiry at 314-440-3593 or m.moberly@kpstrat.com

Intangible Assets and Law Firms

March 4th, 2013. Published under Intangible asset strategy, Law Firms. No Comments.

Michael D. Moberly   March 4, 2013       ‘A blog where attention span matters’!

Its 2013, and globally operating businesses are still in the initial stages of, to be sure, a permanent knowledge (intangible asset) based economy.  The objective is clear, compelling, and absolutely necessary.  That is, at this juncture, law firms with genuine intellectual property (IP) practices in place coupled with a strong culture – orientation for a strategic ‘forward looking – forward thinking’, may well be the professional entity best positioned to provide intangible asset stewardship, oversight, and management (S.O.M.) services beyond providing merely patent, trademark, and copyright issuances and the all, but inevitable, litigation.

This can only occur, I believe, with a dedicated, ‘roll your sleeves up’ client centric intangible asset awareness, alertness, and accountability (training) initiative.  It’s not terribly costly, nor is it overly time consuming, but it’s an excellent strategy  to legitimately re-engage existing clients as well as engage new-prospective clients, and if effectively articulated, will likely be met with real appreciation.

Intangible assets exist in numerous categories, serve company’s (the originators, holders of those assets) in many capacities, and of course, can provide substantial levels of  ‘contributory value’ and competitive advantages.  That is providing. of course, those company management teams, c-suites, and boards achieve (possess) both tactical and strategic operational familiarity with intangible assets’ relevance and use as viable and consistent contributors to (company) value, sources of revenue, and ‘building blocks’ for sustainability, profitability, and growth.

In brief, the client centric awareness, alertness, and accountability initiatives I’m referring to should, at minimum, include components (modules) to for client companies to become smarter insofar as…

  •  Identifying intangible asset vulnerabilities and capabilities to rapidly detect and pursue suspected instances of (asset) compromise, loss, erosion of (asset) value and/or competitive advantages, anyone of which will jeopardize (asset) ownership, control, and use.
  • Becoming an entrusted custodian of clients’ intangible assets through (asset) stewardship, oversight, and management (S.O.M.) that can be genuinely leveraged to attract additional intangible asset (client) services.
  • Become a vehicle to accelerate a law firm’s entrée to build – extend intangible asset service initiatives into new, perhaps non-traditional and/or unconventional market spaces, i.e., (a.) trusted overseer of university-industry collaborative research projects, (b.) stronger role in investment and venture capital initiatives where intangible assets are key players, (c.) helping clients negotiate cyber – IP insurance coverage and premiums etc.
  • Enhancing a companies’ ability to recognize asset life, contributory value, and competitive advantage cycles and act accordingly in a strategic and well informed manner.
  • Instituting (asset) competitive advantage – contributory value safeguards, i.e., companies that effectively safeguard its proprietary intangible assets, simultaneously safeguards its ability to distinguish itself in its market space through the uniqueness of its knowhow, i.e., its intellectual, structural, and relationship capital, etc.
  • Achieving more efficient, expedited, but expanded use of legal counsel by concentrating on IP and intangible asset S.O.M. issues and less on corrective or remediating client missteps.
  • Strengthening client non-disclosure, confidentiality, and non-compete provisions in employment contracts to include the full array of intangible assets.
  • Strengthening investor confidence in a company by executing intangible asset risk exposures mitigation – prevention practices.

 My blog posts are researched and written by me with the genuine intent they serve as a worthy and respectful venue to elevate awareness and appreciation for intangible assets throughout the global business community.  Most of my posts focus on issues related to identifying, unraveling, and sustaining control, use, ownership, and monitoring asset value, materiality, and risk.  As such, my blog posts are not intended to be quick bites of information, unsubstantiated commentary, or single paragraphed platforms to reference other media. 

Comments regarding my blog posts are encouraged and respected. Should any reader elect to utilize all or a portion of any of my posts, attribution is expected and always appreciated. While visiting my blog readers are encouraged to browse other topics (posts) which may be relevant to their circumstance or business transaction.  I always welcome your inquiry at 314-440-3593 or m.moberly@kpstrat.com

Intangible Asset Strategist…It’s Time Your Company Finds One!

March 2nd, 2013. Published under Managing intangible assets. No Comments.

Michael D. Moberly   March 2, 2013       ‘A blog where attention span matters’.

It’s not a cliché…for some management teams, c-suites, and boards, the phrase ‘knowledge-based or intangible asset driven economy, or the notion that 65+% of most company’s value, sources of revenue, and ‘building blocks’ for growth, sustainability, and profitability reside in intangible assets remains more cliché than reality or economic fact.  Reluctance or reticence to recognize and act on these facts – realities are respectfully, but most assuredly, mistaken.

The truth does not lie somewhere in the middle…One would think those economic facts, standing alone, fiduciary responsibilities aside, would be sufficient inducement for management teams to act accordingly.  Unfortunately, and for various reasons, not all management teams have achieved operational familiarity with intangible assets. Instead, experience suggests they find them unwieldy, sometimes challenging to engage and difficult to measure.  That’s in part due to the adverse tri-fecta of…

  • lacking a conventional sense of physicality
  • the absence of being included in b-school curriculums, and
  • not being reported on company balance sheets or financial statements, unless they’re bundled together as the catchall ‘goodwill’.

In today’s tightly wound, highly compressed, and increasingly aggressive and predatorial (global) business transaction environment, companies that continue to overlook, be dismissive of, or routinely hand-off intangible assets to legal counsel or accounting units, assuming they’re legal versus business management issues, then readers are respectfully obliged to read further!

Intangible assets, e.g., intellectual, structural, and relationship capital, brand, etc., can expand and mature very rapidly within an organization.  If not recognized, unraveled, developed, safeguarded, and monitored from the outset, the probability they will be compromised, misappropriated, or literally meld into open – public domain sources is predictably high.  And, once a company’s intangible assets, whatever form they may take, i.e., unique knowhow and/or competitive advantage enters the public domain, re-covering their real (full) contributory value and uncontested use will be both costly and unlikely.  Having an experienced intangible asset specialist – strategist in place can go a long way toward mitigating, if not alleviating such problems.

How does this translate…? Stone v. Ritter in particular, (but also, In Re Caremark and In Re Disney) are three cases that uniquely draw attention to the importance, if not fiduciary responsibility for companies to have effective (intangible asset and IP) stewardship, oversight, and management practices (procedures, policies) in place.

Yes, these are Delaware cases, and yes, they are 2006 and 1996 decisions respectively, but they present relevant issues that warrant board and management team attention.  Collectively, these cases, particularly Stone v. Ritter, elevate ‘the bar’ insofar carving a path of permanency to the stewardship, oversight, and management of a company’s intangible (non-physical) assets, not tangible (physical) assets.

Most importantly, in my view, these cases conveys much warranted clarity to the necessity that boards, management teams, and c-suites be kept apprised of what’s going on inside their company in the form of a (a.) good faith duty, and/or (b.) duty of loyalty to ensure their company has sufficient (intangible) asset monitoring and reporting (compliance) systems in place to routinely and properly keep decision makers – strategic planners appropriately apprised, i.e.,

  • with timely and accurate information, that is sufficient to allow them (within their respective scope of responsibility) to
  • reach informed judgments concerning a company’s compliance with law, and business performance.

In other words, absent specific and effective (communication, reporting) practices to ensure each of the above consistently occur, companies may well be (in light of the aforementioned court decisions) fail to satisfy the duty to be reasonably informed about the company and therefore, be held personally liable for problems that arise pertaining to the stewardship, oversight, and management of intangible and other assets.

The business rationale for engaging intangible assets is much deeper than Stone v. Ritter alone…admittedly, a significant, but unknown number of management team members, c-suites, and boards have yet to fully and consistently engage their intangible assets or realize it’s in their interests to do so.  For them, let’s return to the basic economic fact that 65+% of most company’s value, sources of revenue, and ‘building blocks’ for growth, sustainability, and profitability, do, in fact, originate in intangible assets!  That irreversible 2013 business reality, should serve as a strong, stand alone motive for management teams, c-suites, and boards to not merely take notice, but to act, and act effectively.

A difficult theory of corporate law…it’s far from being rocket science to recognize that endeavoring to hold members of a company’s board (personally) liable for poor or the absence of oversight, stewardship, and management of a company’s intangible assets, is a difficult theory in corporation law to prevail. It is, nevertheless, essential, in today’s increasingly competitive, aggressive, predatorial, and ‘winner-take-all’ (global) business and transaction environment, that those bodies assume a more ‘hands on’ position with respect to the stewardship, oversight, and management of a company’s (intangible) assets.

Intangible asset strategists are impediment to productivity or efficiency….in Stone v. Ritter it was found that important and necessary information failed to reach the board because of ineffective internal asset controls, monitoring, or communication of those controls fell far short or were non-existent.  So, the significance of this particular ruling is that personal liability may attach along with damages if there’s a failure to, (a.) implement an effective information dissemination system, and (b.)coupled with regular (system) monitoring to ensure boards have sufficient and correct information to make informed decisions.

Irrespective of this particular Delaware court decision, a company’s size, its revenues, or industry sector, it’s quite likely some management teams (and boards) will regard the (potential) contributions of an intangible asset specialist-strategist as being unnecessary or an impediment to achieving a company’s (strategic) goals and objectives, i.e., impeding productivity and efficiencies in favor of dispersing such responsibilities throughout a c-suite.

But, in my view, management teams and boards who continue the path of dismissiveness and/or table this managerial responsibility indefinitely are doing so at their financial and competitive advantage peril.  That’s because there remains this pesky reality that 65+% of most company’s value, sources of revenue, and future wealth creation capabilities today are directly related to intangible assets.

So, when the proposition is framed in this factual economic context, management teams are remiss, at minimum, if they don’t objectively deliberate the following ‘is their company effectively positioned, insofar as possessing the expertise and skill sets…

  • to consistently identify, unravel, nurture, utilize, bundle, and effectively and efficiently extract as much value as possible from its intangibles, and
  • simultaneously safeguard and monitor those assets’ value, materiality, and risk.

So, instead of assuming satisfaction with past practice, or worse, assuming all things intangible are either legal or accounting decisions, not strategic business decisions, management teams and boards are obliged to critically and objectively assess ‘has the time come’?

 My blog posts are researched and written by me with the genuine intent they serve as a worthy and respectful venue to elevate awareness and appreciation for intangible assets throughout the global business community.  Most of my posts focus on issues related to identifying, unraveling, and sustaining control, use, ownership, and monitoring asset value, materiality, and risk.  As such, my blog posts are not intended to be quick bites of information, unsubstantiated commentary, or single paragraphed platforms to reference other media. 

Comments regarding my blog posts are encouraged and respected. Should any reader elect to utilize all or a portion of any of my posts, attribution is expected and always appreciated. While visiting my blog readers are encouraged to browse other topics (posts) which may be relevant to their circumstance or business transaction.  I always welcome your inquiry at 314-440-3593 or m.moberly@kpstrat.com