Archive for September, 2013

Managing Intangible Assets Achieving Economic-Business Clarity!

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

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

An essential starting point for elevating managerial familiarity with intangible assets is to bring business, economic, and operational clarity to what intangibles’ are, how/where they originate, and what contributions they make internally and externally to a company’s bottom line.

Precisely how intangibles contribute to and merge with (compliment) existing business practices to render them more effective and efficient often occurs overtime absent immediate notice from management team oversight or monitoring.  In other words intangibles routinely evolve and become embedded as intellectual, relationship, and structural capital without fanfare until it becomes evident that new and/or additional efficiencies have occurred or there’s been a rise in product/service sales, company reputation, brand, value, competitive advantages, etc.  If a management team elects to ‘lift the veil’ to learn how, why, and drill down to learn what prompted/influenced those positive changes, they will often find embedded intangibles such as…

employee sparked intellectual and structural capital (know how, processes) directed toward improvements in relationship (capital) among stakeholders and consumers.

To achieve this level of operational familiarity in assets’ stewardship, oversight, and management context, can merely be a matter of unraveling the origins of a single asset and determining – assessing its contributory value to the improvements.

Such exercises are informative and frequently prompt varying levels of management team self-reflection not just about the contributory value of intangibles, but perhaps more importantly, reorient their training to reflect the development and integration of intangibles.

Another positive outcome of this exercise is that management teams will be more inclined to exude an appreciation for intangibles that spills over to all employees.

What Is Intangible Asset Management?

Effective management of a company’s intangible assets occurs when management teams are consistently committed to…

Being attuned to – engaged in the stewardship, oversight, and monitoring of the assets’:

    • collaborative – contributory value,
    • materiality, and
    • risks to the company, its core mission, competencies, and strategic planning initiatives

Executing effective processes and procedures to ensure:

  •  control, use, ownership, and value (of the assets’) can be sustained (preserved and monitored)
  • throughout the assets’ respective life, value, and functionality cycle
  • to accommodate specific business needs and/or strategic initiatives.

Pursuing prudent strategies to:

  • leverage and showcase their intangibles
  • build and strengthen competitive advantages, structural and relationship capital throughout the value-supply chain, among consumers and stakeholders.

Bringing business clarity to:

  • the development and effective-efficient utilization of intangibles, and
  • converting them into sources of revenue, value, and competitive advantage.

Examining asset’s:

  • relevance, contributory, and collaborative value to company products, services, processes, and transactions, etc.,
  • in play in joint ventures, strategic alliances, mergers, acquisitions, etc.

Ensuring intangibles are routine action-discussion items on c-suite and board agendas.

Consistently exploring ways to

  • utilize intangible assets to create efficiencies
  • effectively and attractively bundle (wrap, package) intangibles to make them more useful, increase their contributory value, create new sources of revenue, competitive advantages, or enhance brand and reputation.
  • mitigate asset risks.
  • position intangibles to attract external sources of investment and/or  leverage (articulate) as collateral for asset-backed lending proposals.

Each blog post is researched and written by me with the genuine intent it serves 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  unsubstantiated commentary or information piggy-backed to other sources.

Comments regarding my blog posts are encouraged and respected. Should any reader elect to utilize all or a portion 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.

 

Oakland A’s Moneyball Draft of 2002…Intangible Assets?

September 11th, 2013. Published under Analysis and commentary. No Comments.

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

The frequently overlooked, under-used, and under-valued 900 pound elephants always present in conference rooms…

Unfortunately, for many companies, their intangible assets remain the overlooked, under-used, and under-valued ‘900 pound’ economic and competitive advantage elephant’ sitting un-noticed, unattended, and unclearly defined in conference rooms globally.

Below reflects  a perspective gleaned from an interaction between Oakland A’s General Manager Billy Beane and his player scouts and development staff extracted from the film Moneyball regarding the famed “Moneyball” draft of 2002.

Beane:  We’re trying to solve a problem here, but you are trying to solve the problem as you still see it, which is the same way Major League Baseball has approached it for the past 120 years by finding ballplayers to replace ballplayers!  You want to find another Jason Giambi and Johnny Damon, but both are gone, their history!

Scouts:  I think we all know what the problem is.  There is a lot of experience in this room and you need to let us do our job of replacing two key players, Jason Giambi and Johnny Damon.

Beane: But, you are not looking at the real problem!

Scouts: No, we are very aware of the problem!

Beane: OK, so what’s the problem?

Scouts:  We have to replace two star players.

Beane:  NO!  The problem we are trying to solve is that you scouts are sitting around talking the same old ‘body’ non-sense, like you’re selling blue jeans and looking for another Fabio!  We’ve got to think differently about how we find ballplayers, assemble a team, and put a team on the field!

Scouts:  Sounds like fortune cookie wisdom to me.

Beane:  NO!  It’s just logic!

Beane:  There is epidemic failure in the game of baseball. Baseball is medieval.  Teams are asking the wrong questions because they don’t understand what is really happening. This leads the people who run MLB teams to misjudge their players. People who run ball clubs think in terms of buying players!

Beane:  Their goal should not be to buy players, their goal should be to buy wins, and in order to buy wins a team needs to buy runs, and what I see is an imperfect understanding of where runs come from or how runs are generated!

Scouts:  But baseball is not just about numbers. Google boy here just doesn’t know what we know.  He doesn’t have our experience or our intuition.  There are ‘intangibles’ that only baseball people like us who know and understand.  You are simply discounting what baseball scouts and player development staff have done for the past 120 years.  So, we don’t care what you think, because MLB thinks the way we think with our evaluative experience and our intuition.  This is not a game about statistics it’s a game about people!

Beane:  We will find value in players which no one else sees!  Good players are routinely overlooked or dismissed for a variety of biased reasons, mostly because this is the way we’ve always done it! Are there really other players out there like Giambi and Damon?  No!  So, what we can do is recreate Giambi and Damon in the aggregate!

Scouts:  Yes, but will they get on base?

Beane:  Do I really care how a ballplayer gets on base, whether it’s by a hit or a walk?  On-base percentage is what we’re looking for now!  This is the new direction of the Oakland A’s.  We are now card counters!

Beane:  The truth is, we can find 25 winning players because everyone else in baseball under values them.  So, if we try to approach the game the same way it’s been done for the past 120 years, then we will lose on the field!  MLB teams must adapt or die!

Beane:  It’s a process…it’s a process…it’s a process!

Similar to Billy Beane’s perspectives, intangible asset strategists  have an attitude about…

  • the way many management teams and companies conduct business and engage in transactions often without regard for the intangible assets they are producing and will inevitably be in play, and
  • the economic fact that 80+% of most company’s value, sources of revenue, and ‘building blocks’ for growth, profitability, and sustainability today lie in – evolve directly from intangible assets. (Brookings Institution, Intangibles Project) 

It’s simply no longer business as usual, regardless of management teams’ wishes or past practice!

 

Each blog post is researched and written by me with the genuine intent it serves 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  unsubstantiated commentary or information piggy-backed to other sources.

Comments regarding my blog posts are encouraged and respected. Should any reader elect to utilize all or a portion 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.

Intellectual Property Theft Faster Than They Can Steal

September 5th, 2013. Published under Intangible asset protection. No Comments.

 Michael D. Moberly    September 5, 2013     ‘A blog where attention span matters!’

Three ironies…

The first irony is that some companies tout an ‘I can invent faster than they can steal’ strategy at a time when intangible – knowledge-based assets have clearly outpaced tangible (physical) assets as the dominant source of most company’s value, revenue, value and ‘building blocks’ for growth, profitability, and sustainability.

For example, the source of value of products such as computers, cellular phones, pharmaceuticals, even some branded consumer products, has, in most instances, shifted from its physical content to its knowledge (intangible asset) content.  Corporate and institutional investment in intangibles such as R&D, brand development, and intellectual, structural, and relationship capital is growing at a substantially faster pace than tangible investments throughout most all developed countries. (Blair, Margaret M., Wallman, Steven M.H. Understanding Intangible Sources of Value.  Brookings Institution. 2000)

The second irony to a ‘I can invent and commercialize faster than they can steal’ strategy is that it’s being touted at a time when corporate and state sponsored business intelligence, economic espionage, information brokering, and data mining and cyber espionage have become more intensive.

The Office of the National Counterintelligence Executive (ONCIX) Annual Report to Congress on Foreign Economic Collection and Industrial Espionage and the American Society for Industrial Security’s Trends In Proprietary Information Loss Survey, and  SANS Institutes’ Study on Cyber Espionage, just to site a few, consistently indicate that ‘the U.S. continues to be threatened by the theft of proprietary economic information and critical technologies.

ONCIX’ Annual Reports consistently point out that risks to sensitive (proprietary) business information and advanced technologies have dramatically increased in the post-Cold War era as foreign governments – both former adversaries and allies – have shifted their espionage resources away from military and political to commercial targets.  The information assets sought are not simply technological data but also financial and commercial information that will deliver a competitive edge in the global economy.

Contrary to some companies perceptions,, leading-edge technologies are not the only assets being targeted.’ (ONCIX Annual Report to The President on Economic Espionage)

A company’s plans, intentions, and capabilities are of interest to competitors and economic adversaries alike because the perspectives-insights gleaned can be used to undermine the targeted company’s competitive advantages, erode its profitability, and stifle momentum for its projects and initiatives.

Implicit in the third irony of the ‘I can invent and commercialize faster than they can steal’ strategy evolve around company turf protection that doesn’t allow information asset protection and computer/IT security practitioners to fully recognize and/or act on their ‘risk commonalities’ to create efficiencies and improved information asset protection.

Perceptually, computer/IT security is often considered the dominant domain for information protection, especially in light of the significant amount of (tangible) resources organizations routinely dedicate to protecting he data and information in their computing – IT systems.

Some computer/IT security practitioners would have us believe that all valuable information evolves from and is stored in computers and IT systems.  Therefore, their logic continues, as a company’s computers and computing systems are (presumed to be) secure, so is the company’s proprietary-sensitive information, trade secrets, proprietary know how, and intellectual property.

But, the question; is the system secure?, carries less meaning today.  The more meaningful question is; has the company’s proprietary-sensitive information, trade secrets, and other valuable intellectual capital adequately protected against events and/or acts known to be competitively – economically harmful?  An often overlooked (neglected) aspect of computer/IT security is that proprietary – competitive advantage assets exist in many formats other than (solely) electronic bits and bytes!

As these realities become more routine action items on company management team agendas, they may be less inclined to summarily dismiss the benefits of adopting a more strategic view about protecting, preserving, and monitoring the value of their intangible assets.

Every Management Team Knows Intangible Assets Have Value, Or Do They?

The professionally condescending adage, ‘talk is cheap’, unfortunately remains indicative of some attitudes held by management teams about the value of intangible assets.  It is only in the past twenty years that we have come to realize that intangibles’ have taken on a new character, that is, they have passed from merely being an instrument through which companies acquire and manage other assets, to being primary assets themselves and the emergence of intangible assets as commodities which require continual protection and definition of ownership rights.  (Branscomb, Anne Wells. Who Owns Information?  From Privacy to Public Access.  Basic Books, 1994).

Today’s companies increasingly find themselves producing an entirely different type of product, i.e., knowledge – intellectual capital, which has become a dominant form of economic – competitive advantage muscle.  Nearly all of the world’s most innovative, successful and wealthy companies are those that wield, manage, and safeguard their knowledge (know how and intellectual capital) effectively.

Michael Dertouzos offers a different view about the value of information assets, i.e., he says, most people believe…

  • information can be easily replicated or replaced, therefore, it has little, if any, value
  • information is passive and exists in abundance, therefore little value is attached other than to its owner or originator.  (Dertouzos, Michael. What Will Be, How theNew World of Information Will Change Our Lives.  Harper Edge. 1997)

Such perspectives often play out as management teams’ rationale for applying only the most cursory (minimal) measures to protect and preserve the value of their intangible assets.

Another perspective readily found in both public and private sectors’ is the assumption that there is a correlation in how certain information is characterized or classified and its value, i.e., top secret, secret, confidential, proprietary, sensitive, etc. Presumably the higher the classification level, the greater its value.  But, given today’s extraordinarily sophisticated and globally predatorial data mining and open source intelligence and analysis capabilities, any presumed relationship between classification and value has largely diminished because the targeting of ideas and innovation routinely occurs long before classification processes are applied.

Each blog post is researched and written by me with the genuine intent it serves 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  unsubstantiated commentary or information piggy-backed to other sources.

Comments regarding my blog posts are encouraged and respected. Should any reader elect to utilize all or a portion 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.