Archive for April, 2014

Business Plans Intangible Assets’

April 30th, 2014. Published under Business plans and mission statements., Intangible asset training for management teams.. No Comments.

Michael D. Moberly    April 30, 2014   ‘A long form blog where attention span really matters’!

There should be no question by now that the business development and transaction terrain has become increasingly (globally) competitive, aggressive, and predatorial, particularly as intangible assets, e.g., intellectual, structural, and relationship capital have become the dominant drivers (producers) of most company’s value and sources of revenue.  These rapid paced realities have certainly influenced, as well they should, entrepreneurially-minded management teams to re-examine the relevance and applicability of conventionally structured business plans.

I am not suggesting conventionally drawn business plans are irrelevant. They can serve as descriptive (projective) roadmaps of what start-up entrepreneurs want (a.) their business to eventually look like, and (b.) tactical and strategic paths to get there!

Such business plans remain largely portrayed in many college (business) textbooks and curricula, as being the very first step one should take toward starting a business. Interestingly, in an MBA (business management) course, which I taught numerous times at a university, this alternative ‘business plan’ perspective being advocating here, was purposefully integrated in my classes in which there were numerous ‘entrepreneurial spirited’ students who aspired to start their own business, with some already in the early stages.

For some, this alternative perspective with it special attention to (a.) speed, (b.) adaptability, and (c.) intangible assets, prompted numerous and generally adverse reactions, particularly from individuals who had already toiled over writing a comprehensive business plan and now felt wedded to it.  Such reactions are understandable because some types of businesses, may require more ‘start-up’ structure than others, thus a strong and detailed business plan may be necessary.

The issue however, for this post, is that there remains an inclination on the part of some management teams to attach far too much symbolism, in my judgment, to conventionally framed – written business plans as if Justice Scalia (U.S. Supreme Court) were debating whether a business plan…

  • constitutes a living document that’s malleable and flexible as circumstances warrant, or
  • is a more static (stationary) document that should be applied – interpreted only relative to its original intent.

I am finding more management teams exhibiting a greater sense of responsiveness, adaptivity, and preparedness to rapidly execute to reflect the often abbreviated and asymmetric time frames (windows) which new business opportunities arise today.

In other words, there is less necessity for entrepreneurially oriented management teams to feel compelled to adhere to the sequential rigidity associated with a conventionally framed business plan.  In other words, while the tactical remains central, management teams are well advised to not overlook or neglect the necessity to be strategically speedy and forward looking – thinking!

Admittedly, by choice and preference, most of my engagements, are with small, mid-size, and early stage companies. For these, assembling a structured and strategically focused business plan may be subordinate to merely trying to remain viable beyond the first year of launch.

But again, it’s not uncommon to find myself visiting companies which, at first blush, may appear somewhat rudderless, but instead, they are continually evolving, emerging, and have adapted to a perpetual state of re-inventing themselves to reflect and/or accommodate the rapidity of change they are experiencing in their market space and/or exhibited by consumers and an expanding and diverse set of stakeholders.

Underlying this un-conventional ‘business plan’ model lies in management teams’…

  • to be in perpetual state of forward looking – thinking (tactically, strategically)
  • obligation to retain sufficient flexibility and maneuverability in their outlook
  • accommodating transactions and/or opportunities in their market space as quickly and effectively as circumstances warrant.
  • achieving confidence in identifying and exploiting their intangible assets which may not always mesh well with conventional, structured, and inflexible ‘roadmap’ perspectives of formal business plans.
  • to devote much more attention to identifying, developing, safeguarding, and exploiting the intangible assets and embrace flexibility, i.e., being prepared to adapt, change, and have the necessary information, at the ready, to make sound decisions as rapidly as a new deal, proposal, or circumstance warrants.

But, admittedly, a substantial portion of the financial services – lending community finds little, if anything, to be enamored with regarding this alternative model for business plan development.  For this profession, a comprehensive and sequentially structured business plan generally serves as the requisite starting point for most any ‘start-up’ business discussion to reach a second level.

By now, there should be no argument that intangible assets have become the key and irreversible underliers to the success and profitability for most companies. Remember, it is an economic fact that 80+% of most company’s value and sources of revenue evolve directly from intangible assets. But, intangibles must be recognized, developed, and used (exploited) effectively to achieve the value, revenue, and competitive advantages which most are capable.   An important marker for demonstrating the effective use/exploitation of intangible assets, in my view, occurs when management teams…

  • recognize intangibles as being very maneuverable, flexible, adaptable, and ‘bundable’ to accommodate the development and execution of a new product, service, or transaction.
  • know when, where, and how to use them best to achieve particular objectives, i.e., the wisdom, timing, and sense of foreseeability.

In other words, there should be an intangible asset intelligent ‘managerial culture’ in place when conceiving – writing startup business plans!

 

Intangible Asset OPSEC

April 25th, 2014. Published under Due Diligence and Risk Assessments, Intangible asset protection. No Comments.

Michael D. Moberly  April 25, 2014   ‘A long form blog where attention span really matters’.

This post is written for entrepreneurs, researchers, and companies who recognize the importance and value of retaining some semblance of confidentiality regarding perhaps a pending merger, acquisition, R&D project, new product launch and/or public rollout. The following is one example.

I colleague of mine who very deservedly is a highly sought after ‘chief security officer’ (CSO) for Fortune ranked technology firms. In a previous CSO position he assumed enterprise wide responsibility for maintaining absolute secrecy regarding a newly developed product and its launch at the annual ‘consumer electronics’ show in Las Vegas. His efforts were successful, that is, there was no evidence of leakage or premature disclosure that would have provided fodder for analyst speculation that may have, at least partially, negated – undermined the company from experiencing a rapid 300% increase in its stock price following its public launch at the show.

In the U.S. Silicon Valley, where there are large numbers of extraordinarily sophisticated, and globlly predatorial competitor – business intelligence activities ongoing, coupled with the somewhat incestuous employee fire – hire – rehire environment, maintaining comprehensive project – product launch secrecy for any substantial length of time is, to be sure, is a significant responsibility and undertaking encompassing countless variables.  Though, my colleague is and remains an ardent advocate and practitioner of OPSEC.

The Origins of OPSEC

As a methodology, OPSEC (operations security) emerged in 1967, during the Viet Nam war, when a small group of U.S. Navy personnel were tasked to determine how the enemy was obtaining advance information about U.S. military combat (air, ground) missions. The enemy, in this instance, was the Viet Cong, the North Vietnamese Army and their various allies.

This group of Navy personnel learned that, in many instances, there was an abundance of unclassified ‘indicators’ that were readily observable by adversaries that, in many instances, signaled a pending military mission or operation.

The enemy’s intelligence collection and analysis methodologies were quite unsophisticated, generally relying on personal observations and understanding which indicators were relevant, which in turn allowed them to ‘connect the proverbial dots’ to develop a rapid and frequently accurate assessment of (a.) the capabilities of the particular combat unit involved, and (b.) it’s intentions, which included the missions’ intended target.

As the adversary’s honed their observation and analytical skills insofar as recognizing mission/operation ‘indicators’, the always desirable and preferred element of surprise was routinely being compromised, along with a reduction in mission effectiveness. More importantly however, the military personnel executing the compromised missions were now being exposed to greater risk.

In short, the U.S. Navy personnel charged with examining how missions – operations were being compromised came to learn that, even though mandated security and intelligence countermeasures were being used, reliance solely upon them, was insufficient to completely deny adversaries from surmising mission intentions and capabilities to their benefit.

It was ultimately concluded that, if military operations ‘were examined through the eyes of the adversary’, i.e., from the planning phase through execution, mission planners would themselves come to recognize and ultimately eliminate the myriad of subtle and often indirect indicators, i.e., actions, behaviors, etc., that ‘signal’ a pending operation.

Then, as now, operations security (OPSEC) is associated with the planning and executing operations in which…

  • secrecy
  • integrity, and the
  • element of surprise

…are absolutely essential to mission success and mitigating personnel  risk!

Since the Viet Nam war, the OPSEC process has undergone numerous revisions and refinements. Its benefits are now widely recognized and applied throughout much of the defense, public law enforcement and even certain corporate R&D environments.

What Is OPSEC?

OPSEC is a specialized security discipline. It focuses on discovering and eliminating the indirect ways in which information assets pertinent to the planning and execution of an operation and/or project can become known to and used by an adversary to undermine the mission’s success and elevate exposure to risk

OPSEC emphasizes the view that adversaries have a consistent interest in acquiring information that will aid them to evade (a.) detection, (b.) capture and arrest, and (c.) otherwise permit them to continue their intelligence collection activities unabated.

Insofar As The Private (Tech) Sector Is Concerned, The Key To OPSEC’s Success Is Examining Projects Through The Eyes Of Economic and Competitive Advantage Adversaries

To be effective in today’s global business environment, a company must be able to systematically examine all planning and execution related activities ‘through the eyes’ of their known economic and competitive advantage adversaries, which entails…

  • assessing the adversary’s motivations, intentions, and capabilities to actually detect and exploit relevant intangible assets, particularly intellectual, structural, and relationship capital.
  • eliminating, or, at least minimizing preparatory ‘indicators’ related to pending operations, projects, and R&D throughout the planning and execution stages.

In my judgment, each OPSEC principle is readily translatable to the private sector. It’s merely a matter of recognizing how military related goals fit a private sector initiative or transaction.

For example, companies, be they Fortune ranked or early stage start-ups, that are about to ‘go public’ with a new product, service, or technology have an interest in discovering and eliminating even the most subtle indicator that could become known and applied by competitors to undermine and/or deny success.

I am hard pressed to identify any circumstance in which it would be in a company’s interest to inadvertently or negligently provide a close competitor with advance notice. Given the aggressively competitive, globally predatorial, and ‘winner-take-all’ nature of most companies today, any advance notice would give competitors ample time to develop a counter campaign of sorts, to undermine the projected success of a new products’ rollout, merely because ‘the element of consumer surprise’ was absent.

There is little question that the combined elements of consumer anticipation and surprise are valuable commodities to the private sector!

But, in part because of how and why OPSEC originated, particularly perhaps its association with military (war) operations, there have been challenges to overcome (address) with business decision makers to render it a more appreciated application, not solely to new product launches, but also to various types of business transactions in which confidentiality and due diligence are essential, e.g., mergers and acquisitions, etc.

A key and very favorable factor, insofar as applying OPSEC to private sector transactions is concerned is the economic fact that 80+% of most company’s value, sources of revenue, and competitive advantage now lie in – evolved directly from intangible assets.

So, an initial step is for a company to recognize various ways in which valuable intangible asset shrinkage – compromise – misappropriation can prematurely occur to benefit a competitor and its market space. Company leadership must too recognize that some intangibles may not meet the six requisites of trade secrecy, but still they may be identified as proprietary and remain out of the public domain for as long as possible so the company is positioned to take full advantage – exploit their intangibles before any (global) competitor can mount a counter move designed to undermine and/or diminish any projected successes.

Translating OPSEC To The Private Sector

To security practitioners already well versed in the principles and practices of OPSEC, the safeguarding and preserving the value of the array of contributory intangible assets, while being (a.) integral to OPSEC and (b.) routinely part of conversations among company decisions makers, the term OPSEC itself, is rarely uttered because a significant percentage of business decision makers are far removed from any defense and/or military reference points on which OPSEC was founded.

Too, well practiced OPSEC is not reliant on any particular automated procedure. Instead, OPSEC is dependent on a high level of (user) internalization coupled with keen awareness and observation skill sets in which users and decision-makers consistently examine most all of their business-related activities through the eyes of global economic and competitive advantage adversaries

Broadly speaking, these OPSEC attributes are, in some respects, the antithesis of the very technical and procedural (disclaimer and liability influenced) rigidity associated with most computer/IT security (software) programs and/or enforcement provisions related to intellectual property law.

OPSEC compliance and its ultimate value – contribution to a company is, for the most part, dependant on people – user awareness, and alertness. Figuratively then, OPSEC may be more art than science, but it is quite successful.

Academic Freedom Is An Intangible Asset!

April 24th, 2014. Published under University R&D. No Comments.

Michael D. Moberly   April 24, 2014   ‘A long form blog where attention span really matters’.

Academic freedom as it applies to university-based scientific research is one of our most fundamental intangible assets! Most country’s higher education policy has been largely supportive of the time honored practice/tradition of academic freedom and open communication with respect to university-based research. Academic freedom entails, among other things, unfettered and at will exchange of research, information, options to publish findings.

Insofar as the U.S. is concerned, World War II prompted some government leaders to contemplate, in national security contexts, the value and competitive advantages of university-based scientific research, if adversaries were able to acquire and apply it against the U.S. A significant number of the government leaders engaged in this debate advocated the imposition of controls which would place restrictions on conventional academic freedoms with respect to research.

Of course, there were opponents. One quite strong opponent to government imposition of controls on scientific communication in universities was Vannevar Bush, who stated in 1945 that:

  • “there is no reason to believe that scientists from other countries will not, in time, re-discover everything we now know…”.
  • “a sounder foundation for our national security rests in a broad dissemination of scientific knowledge upon which further advances can be more readily made than in a policy of restriction which would impede further advances in the hope that our potential enemies/adversaries will not catch up with us…”. (Vannevar Bush.       Science: The Endless Frontier. U.S. Office of Scientific Research and Development, National Science Foundation. Washington, DC 1980 (originally published in 1945).

The subsequent Cold War era however, distorted the distinctions Bush sought to make. One result was there became few, if any, limits on the kinds of contributory scientific research which some Federal officials would interpret as being vital to national security and, therefore, warranting some type of control to limit communication, dissemination, and ultimately, availability.

During the Cold War, threats posed by the Soviet Union were the primary focus of national security and counterintelligence initiatives by the U.S. government and were concentrated on monitoring its methodologies and targets, particularly, intelligence collection activity directed at economic and technological information which was treated as an adjunct to traditional espionage, not as a separate topic. (From testimony of Louis J. Freeh, Director, FBI, before House Judiciary Committee, Subcommittee on Crime, Hearing on Economic Espionage, May 9, 1996)

The end of the Cold War however, spawned a new emphasis, i.e., the connections between nation’s economic stability, vitality, and national defense. And, beginning in the mid to late 1980’s, national security was seen more in terms of economic strength and vitality than in terms of pure military capability. In other words, as former FBI Directors stated before the Cleveland Economics Club, ‘the U.S.’s economic security equates with its national security’. In other words, they were becoming, from a strategic (national, international) policy perspective, indistinguishable, or, if you will, interchangeable.

But, despite numerous well argued protests emanating from the U.S. scientific – research sector, in general, some restrictions were still placed on traditional scientific communication. Relief from these information/research security controls began to emerge (lessen) as Cold War anti-communism perspectives were essentially ‘re-purposed’ to accommodate – reflect the many new international trade and foreign policy initiatives which sought more cooperation and collaboration with the Soviet Union and its (Warsaw Pact) allies during the late 1960’s. But, as relations with the Soviets and Eastern bloc countries deteriorated again in the late 1970’s, culminating with the end of detent upon the invasion Afghanistan by the Soviets, the previous restrictions on scientific communication and specific university-based research were re-emerged with new controls and restrictions being sought.

So, during the first half of the 1980’s, American scientists experienced a significant increase in (national) security controls placed on their professional communication, teaching, speech, and research. (Relyea, Harold. Silencing Science: National Security Controls and Scientific Communication. Ablex. Norwood, NJ 1994. Preface)

This same debate regarding scientific communication and national security emerged again in March of 1982 as Department of Defense officials initiated discussions with the National Academy’s of Sciences and Engineering and the Institute of Medicine concerning ‘the acquisition and use of American science and technology’ by economic, defense, and competitive advantage adversaries.

These particular discussions led to the creation of the ‘Panel on Scientific Communication and National Security’ often referred to as ‘the Corson Panel’ named after the former president of Cornell University who served as its chair. The Panel was comprised of individuals representing industry, government, and the scientific (academic) community and was charged with examining this complex and increasingly critical issue and its relevance to the U.S.’s national security. To be sure, the U.S. was certainly not the only nation expressing concern regarding this complex dilemma.

As would be expected, the higher education research community was deeply concerned that, in the name of national security, the stage was being set (again) for the imposition of possibly stronger and more stringent controls on the flow of scientific information and research within and between universities, controls which opponents argued would seriously affect the climate and operation of university-based research and the benefits stemming from them not only to the U.S., but other countries, as well. (Gray, Paul E. Technology Transfer At Issue: The Academic Viewpoint. IEEE Spectrum, May, 1982)

Dr. Frank Press, former president of the National Academy of Sciences summarized these critical issues in a September 30, 1982 letter regarding the work of the Panel on Scientific Communication and National Security…

“…the issue of scientific communication and national security represents a most difficult policy issue. Advances in science and technology have traditionally thrived in an atmosphere of open communication and this openness has contributed to American military and economic strength and has been a tenet of American culture and higher education”.

“…however, recent trends, including apparent increases in acquisition efforts by adversaries to the U.S., have raised serious concerns that openness may harm U.S. security by providing those adversaries with militarily relevant technologies that can be directed against us”.

“…as would be expected when major national (security) interests are being questioned, it’s inevitable that signs of distrust will emerge from all sides of the growing public discussion. The federal government, through its research and development agencies, and the university research community, where most basic research is conducted, both will lose much if the nation cannot find a policy course that reflects these legitimate concerns.”

There was consensus however among Corson Panel members upon completion of their work in late 1982, that universities and open scientific communication had been the source of very little of the problem of technology transfer to adversaries. The Corson Panel did acknowledge however, there had been a net flow of scientific information from the U.S. to other countries. This, they claimed, was consistent with the more advanced status of U.S. science. But still, the Corson Panel reported noted there was serious doubt as to whether adversaries could actually reap significant and/or direct military benefits from this information flow in the near term.

In late 1982, when the Panel’sreport was published, little was known about the steadily growing interest by business and government alike, in matters related to competitiveness and economics outside of traditional military or defense-related espionage issues. At the time, the increasingly sophisticated and specialized profession known as ‘competitor and economic intelligence’ was literally in its infancy, and there is no public evidence that members of the Panel recognized or gave credence to this phenomenon since neither was characterized, at the time, as either global in scope or a routine business practice as they certainly are today.

A contributing factor this assessment was that, at the time, the largely government sponsored intelligence empires still focused most of their acquisition and analysis attention on military, defense, and political subjects, not business, industry, economic, or competitiveness matters. (Scientific Communication and National Security. A report prepared by the Panel on Scientific Communication and National Security Committee on Science, Engineering, and Public Policy. National Academy of Sciences, National Academy of Engineering, and the Institute of Medicine. National Academy Press, Washington, DC. 1982)

Today, however, in the ‘global economy,’ no longer is there any practical or useful distinction between national economic relations and international economic relations. Most national economies, like that of the U.S., are no longer islands where domestic preferences alone dictate outcomes. (Gregory, Sean. Economic Intelligence in the Post-Cold War Era: Issues for Reform. 1997 and William Warner, University of Kentucky)

And, while most government sponsored intelligence agencies today retain a general mission for external intelligence collection, many, if not most, have refocused their attention to include acquisition of economic intelligence versus exclusively military-defense related targets. (Broadly attributed to David Major, The Centre for Counterintelligence and Security Studies)

Intangible Asset Due Diligence

April 23rd, 2014. Published under Due Diligence and Risk Assessments. 3 Comments.

Michael D. Moberly    April 23, 2014    ‘A long form blog where attention span really matters’!

Conducting intangible asset due diligence is essential because today, as much as 80+% of most company’s value, sources of revenue, and competitive advantages, etc., lie in – evolve directly from intangible assets. That’s a globally universal economic fact! Too, the various transactions a company routinely engages, one can be assured, intangible assets will inevitably be in play and therefore their status can affect any transaction outcome.

Intangible asset due diligence is not an exercise that is useful only after a company suspects or experiences the materialization of a risk, i.e., misappropriation, infringement, etc., or is notified they are a defendant to a lawsuit!

Equally important, intangible asset due diligence, given the complexities involved, should not be a mere confirmatory review that certain intangibles are present using a generic, one-size-fits-all checklist.

Intangible asset due diligence is obliged to provide decision makers with…

  • actionable recommendations for making sound business decisions about preserving, managing, positioning, and extracting value from the assets in play.
  • an objective sense of the targeted assets’ fragility, stability, defensibility, and value insofar as projections of deliverable revenue and competitive advantages.

When conducting intangible asset due diligence, a first responsibility is to understand the target company by becoming familiar with its intangibles, i.e., the underlying intellectual, structural, and relationship capital particularly.

When should companies conduct their intangible asset due diligence? In most circumstances, its best to engage in preliminary due diligence should be conducted as a prelude to any transaction in which specific, i.e., the sought after intangibles will be in play. Thus, intangible asset due diligence should be analogous to asset monitoring and conducted in both pre and post transaction contexts.

How will intangible asset due diligence benefit your company? In any business transaction in which intangible assets will be integral to the outcome, due diligence can enable and facilitate a more secure and profitable transaction (not impede it) by providing decision makers with clear and timely insights, i.e.,

  • Identifying embedded – under-the-radar risks, vulnerabilities, and operational complexities that contribute to impairing or entangling knowledge-based assets and serve as preludes to costly and time consuming disputes and challenges…
  • Identifying and unraveling internal centers, chains, or clusters of intangibles and competitive advantages and assess the adequacy of safeguards.
  • Bringing operational – economic clarity to the target company’s intangible assets, intellectual property, know how, brand, and competitive advantages, etc.
  • Identifying efficient – effective protection – value preservation measures that are aligned with a transactions’ objective and the company’s strategic business plan, i.e., projected returns, exit strategy, as well as the life – value cycle of the assets in play.

Reader comments and inquires are always welcome at 314-440-3593 (St. Louis) or m.moberly@kpstrat.com

Invention Commercialization Critical Questions Affecting Outcome

April 12th, 2014. Published under Intangible Asset Value, Intangibles as strategic assets, Managing intangible assets, Uncategorized. No Comments.

Michael D. Moberly    April 12, 2014   ‘A long form blog where attention span really matters’.

Often, the unrecognized and under-valued intellectual and structural capital initiators to intellectual property rich corporate – university R&D collaborations are the  numerous intangible asset underliers, i.e., intellectual and structural capital which inevitably play a significant role in an invention and/or technology transfer initiatives, in general.

But, when the stewardship, oversight, and management of an invention’s (IP’s) contributing – supporting intangible assets are neither acknowledged nor safeguarded, at the outset, those asset’s value, competitive advantages, value, and sources of revenue which they may have the potential for producing for their holder can quickly be undermined, substantially diminished, or even ’go to zero’!

To avoid or substantially mitigate the vulnerability, probability, and criticality which such asset risks will materialize, I find a quick, but effective, project-wide (self-) assessment is useful.  The assessment consists of eight managerially focused questions with each designed to respectfully influence R&D project leaders, inventors, researchers, and technology transfer – commercialization teams to genuinely reflect on how, whether, and to what degree the key – relevant intangible asset initiators have, thus far, been managed, utilized, and safeguarded.

Admittedly, a rather transparent agenda to this assessment is elevating (managerial) awareness and operational familiarity with the economic fact that 80+% of most invention’s, and eventually startup and/or spin-off company’s value, projected sources of revenue, and ‘building blocks’ for successful (asset) commercialization evolve directly from the initiating – supporting (underlying) intangible assets, not IP per se.

An unfortunate, but persistent reality (risk) is that intangible assets can quickly become mired in costly, time consuming, and momentum stifling challenges and disputes or become subject to misappropriation or infringement if left unacknowledged, or negligently meld into the public domain – open sources.  As suggested, when either occurs, the asset commercialization potential (of these intangible assets, including the IP itself) can be irreversibly lost or, at minimum, severely obstructed in their contributory role.

The assessment…

I routinely find clients can complete this assessment in 7-10 minutes.  Readers are encouraged to not infer the speed in which the assessment can be completed and its brevity, i.e., seven questions minimizes its significance and benefits.  In framing this (self-) assessment I recognize that more comprehensive assessments do not necessarily produce – influence superior or more genuine (personal) reflection that translates to action and more profitable outcomes, particularly with respect to the oversight, management, and status of the key (most critical and contributing) intangible assets.  Too, I am respectfully, and humbly confident the assessment itself, as well as each of the nine questions can echo throughout an enterprise to the point they become routine discussion and action items in conference rooms, board rooms, technology transfer offices, and particularly amongst the scientists, researchers, and inventors who stand to benefit from effective and consistent stewardship, oversight, and management of the research they initiated.

Seven critical questions affecting invention commercialization outcomes…

As corporate – university R&D project management teams engage the assessment questions below they are encouraged to recognize that intangible assets, primarily in the form of intellectual and structural capital are not always specific to a single invention.  Instead, they may ultimately become initiators – underliers to other projects as well as being integral to most every stage of the instant invention process, i.e., at the (a.) idea formation stage, (b.) invention and product development stage, and (c.) commercialization (technology transfer) stage.

Assessment questions…

  1. Are intangible assets consistent discussion (action) items in management team meetings?
  2. Can research project management teams and the relevant inventors distinguish – or find consensus about the specific intangible asset(s), i.e., intellectual, structural capital, emanating from the initial research, and now have measurable contributory value to the product being proposed for commercialization to create sources of revenue, competitive      advantages, reputation, market space, etc.?
  3. Are project managers – management teams maintaining an inventory (audit) of the contributing (underlying, supporting) intangible assets that emanate from and/or drive the invention/commercialization process?  If so, are those processes being regularly re-assessed, updated?
  4. Do the inventory-audit updates specifically include an assessment of how, whether, or which intangible assets sustain value, materiality,  relevance, and mitigate risks to the invention itself, the  commercialization process, and the inevitable spin-off – startup company’s core mission and strategic planning?
  5. Have invention commercialization project managers identified which (contributing) intangible assets hold the highest probability for investor attractivity, value, and sustainability, price points, fees, royalties, etc., if they were sold, licensed, or used in a strategic alliance and/or joint venture?
  6. Have invention commercialization project managers and inventors identified which invention relevant intangible assets, particularly      intellectual and structural capital are most vulnerable to risk, e.g., pre and post commercialization, technology transfer, and business transaction to infringement, misappropriation, premature leakage, counterfeiting,  etc.?
  7. Have invention commercialization project managers implemented an organizational resilience (continuity – contingency) plan that specifically includes (a.) contributory intangible asset risk/threat mitigation, and (b.) rapid recovery from the adverse impact of materialized risk(s)?

In sum, are there processes – procedures in place, with respect to the invention commercialization process to…

  • ensure mission critical (intangible) assets hold (their) value, deliver revenue, or remains relevant to the spin-off company’s core mission and strategic plan, and
  • remain aligned with the development and/or acquisition of additional intangible assets necessary to achieve the inevitable spin-off company’s core mission, and strategic (market) planning?
  • identify who is responsible and how will such responsibilities will be executed regarding the on-going management, monitoring and measurement of intangible asset performance relative to sustaining – enhancing company value, sources of revenue, competitive advantages, reputation, etc.

Reader comments and inquires are always welcome at 314-440-3593 (St. Louis) or m.moberly@kpstrat.com 

 

Reputation Risks Secondary Actors

April 10th, 2014. Published under Reputation risk.. No Comments.

Michael D. Moberly    April 10, 2014    ‘A long form blog where attention span really matters’.

Reputation risks can produce secondary actors.  Most examples of materialized reputation risk which draw my attention emanate from online discussion groups, business magazines and various other (media) sources in which usually there are often well warranted critiques of mishandled calamities of Fortune ranked firms.  Too, those discussions are frequently framed in 50,000 foot altitude language, no doubt, in part, because when Fortune ranked firms experience a ‘reputation risk’, inevitably, there are two commonalities that eventually come to light, i.e., the risk…

  • has often been known and festering for a period of time within the company but not acted upon.
  •  is of sufficient magnitude that media attention is warranted and obligated, i.e., automobile safety recalls.

But usually, the media attention and subject matter expert discussions and critique meld away because in a few weeks as other companies experience reputation risk events.  Somewhat unfortunately, little of such discussion or critiques are conveyed at the 50 foot altitudes where reactions to an exposed reputation risk can assume a much more personal context.  Too, at the 50 foot altitudes employees are far removed from the company’s c-suite and its official line it has adopted.

This leaves one to conclude that, at the 50 foot altitudes,  reactions may be more revenge and/or retribution orientation. Yes, these terms may be harsh but I am hard pressed to identify words or language that better reflects what sometimes occurs. More specifically, companies experiencing significant events – oversights which adversely affect their reputation ought not assume that mid to lower management personnel may not engage in reactions that specifically reflect the official company line.

As an example, let’s examine the multiple reputation risk challenges experienced by Toyota over the past few months – years, including another massive recall announced yesterday.  The initial risk Toyota experienced that lead to recalls, dealt with untimely (vehicle) acceleration.

Well, a long standing academic unit at Southern Illinois University Carbondale is an Automotive Technology program which is, by all accounts an excellent program.  For years the Auto Tech program has been the butt of ignorant and disrespectful jokes, often emanating internally, insofar as being characterized as ‘truck driver training or a shade tree auto mechanic school’.  Of course, nothing could be further from the truth.  This academic unit has won far more than its share of national awards for both its technology prowess and its partnerships with every automobile manufacturers including Toyota which donated automobiles and held two positions on the programs’ board of advisors.

Perhaps with some irony, a faculty member of the Auto Tech program who’s specialty – expertise was in automobile ignition systems had recently purchased a Toyota, as it would happen, shortly after the company’s ‘acceleration problem’ came to light.

With customary research curiosity, this faculty member brought his Toyota into the Automotive Technology program ‘shop’ and set out to try to find the cause of the ‘sudden unintended acceleration’ problem (perhaps caused by faulty ignition switches) using his own newly purchased Toyota Tundra as the ‘test’ subject.

Not wishing to belabor the point, this professor did, in fact identify a technical theory as to what was causing the dangerous acceleration problems. He put his findings – theory to paper and sent it the National Highway Transportation Board fully expecting that would be the end of it.  But no, the following week he received a call from a Congressional oversight committee and found himself testifying before Congress a few days later.

One may think such research coupled with an invite to testify before a Congressional committee would be a good thing, right?, with University administrators being thrilled with the national recognition it would achieve.  But, not in this instance, Toyota representatives arrived on the campus soon after, and in possession of the professor’s entire (Congressional) testimony in which they set about to critically review ‘line by line’.  Needless to say, the Toyota officials were not pleased, and perhaps even more unfortunately, neither were SIUC’s administration which cast doubt on the professors’ continued employment as was his research, which by the way, NASA scientists, who were also researching the same problem, strongly supported.  Before the Toyota officials departed campus, they took back the vehicles they had donated to the Automotive Technology Program’s and also resigned their two seats on the program’s Advisory Board.

Probably every reader of this blog would not find the above particularly surprising or necessarily out of character for multi-national firms to react in such a direct and revengeful manner.  After all, it was indeed adversely affecting not just their reputation, but their ‘bottom line’.

But, what I find even more interesting is why would administrators of such a large university, unwittingly open their doors to potentially be on the receiving end themselves of (academic research) reputation risk, seemingly absent thought given to the time honored principles of academic freedom?