Archive for January, 2015

Global Business Risks, Their Changing State

January 29th, 2015. Published under Enterprise risk management.. No Comments.

Michael D. Moberly    January 29, 2015   ‘A blog where attention span really matters’!

World Economic Forum reports, out of necessity, are generally framed in neutral 30,000 foot altitude contexts.  More specifically, the 2015 WEF Risk Report projects ten risk challenges which are likely to materialize in the coming decade. For me, I would be hesitant to catalog those projections as constituting ‘rocket science’.   What is a form of ‘rocket science’ however, is designing and executing viable strategies to, at minimum, mitigate those risks to merge the chasm of pleasing stake/share holders and companies becoming stagnatingly risk averse.

Among the contributors to – framers of the 2015 Risk Report, I suspect consensus was rather easily achieved. There are some important distinctions however that warrant pointing out, which are, through my lens anyway, significant business risks can manifest much more rapidly today, often ‘overnight’, and there are few examples such risks dissipate, even remotely, with equal rapidity. Instead, they persist, fester, and frequently exacerbate in their complexity and volatility, resembling reputation risks.

Should this be a reasonably correct perspective, it leaves me with the notion that, for greater numbers of global business risks, prevention and/or resolution are rapidly becoming increasingly illogical options, instead, temporary (risk) mitigation is the best most can hope for and can viably achieve.

As a strategic aid to unravel this phenomena further, it certainly would have been useful had the WEF directly addressed their projected business risks in light of the economic fact that today, 80+% of most company’s value and primary sources of revenue globally speaking, lie in – evolve directly from intangible assets!

Economic – Cyber Espionage, It’s The Intangible Assets Adversaries Are After!

January 22nd, 2015. Published under 'Safeguarding Intangible Assets', Economic Espionage. No Comments.

Michael D. Moberly   January 22, 2015   ‘A blog where attention span really matters’!

 What economic – competitive adversaries are really targeting…

Having been actively engaged in the intangible asset arena since the early 1990’s as an intangible asset strategist and risk specialist, I am continually hard pressed to understand why the administration, cabinet secretaries, government agency heads, corporate c-suites, and repetitive pundits consistently portray the target(s) of global economic (cyber) espionage as intellectual property, i.e., patents particularly.

My suspicions are that by continually portraying private sector information asset losses in IP-only contexts more attention is drawn to the issue and using IP-laced language to describe the threat and loss presumes ‘the audience’ would find it challenging to understand the intricacies and distinctions of stolen or misappropriated intangible assets, i.e., intellectual, structural, and relationship capital.

 It’s the intangible assets…The persistent initiatives of global economic and competitive advantage adversaries is targeting company’s intangible assets, particularly proprietary know how in the form of intellectual and structural capital that affords adversaries economic and often defense competitive advantages.

These assets are precisely what adversaries’ need, want, and therefore will aggressively and stealthily pursue because, because it is the quickest route to global competitiveness, sector dominance, and profitability while diminishing the reputation of the target (loser).

80+% global economic fact…There is no other time in business governance – management history when steadily rising percentages (80+%) of most company’s value, sources of revenue lie in – emerge almost exclusively, from intangible assets, e.g., intellectual, structural, and relationship capital, reputation, brand, R&D, contracts, and hybrid (proprietary) technologies, etc.

 Issued patents do provide legal standing, but little or no deterrence…Issued IP provides holders with (legal) standing to bring criminal and/or civil action against today’s inevitable infringement. But, patent holders should avoid assuming its’ issuance provides much deterrence because potential economic, competitive advantage, and reputational gains are too probable and lucrative to pass up. So, any notion that the proprietary know how underlying – embedded in patents is magically safeguarded, through conventional IP deterrent affects is, truth be told, substantially more myth than reality.

Assumptions to the contrary represent, in my view, wishful, naïve, and out-of-date thinking.

Think about it…Why would an economic – competitive advantage adversary, data mining operation, information broker, or competitor intelligence firm engage in the presumed risk of acquiring (stealing) a U.S. patent when essentially the same information will be published and available online through the U.S. Patent and Trademark Office?

Admittedly, pursuing the ‘patent route’ is often a business decision (WTO requisite) reflective of today’s globally aggressive, predatorial, winner-take-all, and go fast, go hard, go global business (transaction) environment.

Ultimately, those charged with safeguarding valuable proprietary information of a company or client would be respectfully encouraged to ask, how and which knowledge-based intangible assets originating with a company warrant higher levels and more sophisticated safeguards and resilience planning? The answer, that’s where practitioners are obliged to devote their resources and time!

Start-up – RBSU Success Dependent On Safeguarding Contributory Intangible Assets

January 21st, 2015. Published under 'Safeguarding Intangible Assets', Early stage companies.. No Comments.

Michael D. Moberly     January 21, 2015    ‘A blog where attention span really matters’!

For start-up management teams, the importance attached to launch their product or service cannot be overstated. It is important on many levels, one of which, it puts a new venture, on ‘the public stage’ and subject to all of the like – dislike variables which inevitably follow.

Should stake holder, prospective user, and investor reaction be favorable, launches can put a start-ups’ innovation a few steps closer to profitability, says Ans Heirman and Bart Clarysse formerly of Ghent University in their fine paper ‘Do Intangible Assets at Start-Up Matter for Innovation Speed?’

The speed which an innovation arrives at its launch stage is also important insofar as attracting initial rounds of investment. Another increasingly crucial factor that affects the speed which start-up innovations’ are positioned for launch is early recognition for safeguarding an innovations’ enabling and contributory intangible assets which in most instances are embedded in – underlie the innovation itself, i.e., intellectual, structural, and relationship capital or the proprietary know how and processes.

Unfortunately, I have observed many start-up management teams, be they RBSU’s or independent, imprudently directing their aspirations to seeking the issuance of a patent. Routinely, innovators rather naively assume ‘the patent route’, standing alone, will serve as sufficient safeguards for their innovation. And, most, if not every investor prefers, if not demands, an innovation be patented as a prelude to favorable investment consideration..

What innovators tend to discount or altogether overlook are equally valuable (enabling) intangible assets that routinely serve as the underlying foundation to every innovation. It’s now quite routine that 90+% of start-ups’ – innovations’ sources of value, revenue, and ‘building blocks’ for growth, profitability, and sustainability to reside in – evolve directly from intangible assets.

Even though Heirman and Clarysse’ paper was published in 2004, it still carries much relevance insofar as making a convincing case that antecedents to innovation, i.e., speed emminates from recognizing, safeguarding, and managing key intangible assets, again particularly, the intellectual, relationship, and structural capital.

Heirman and Clarysse also make a very favorable case that other equally important intangible assets, which they refer to as ‘pre-founding R&D efforts’, e.g.,

  • innovation team tenure,
  • the experience level of the start-ups’ founders and management team members, and
  • third party collaborations, are also important contributors to innovation speed.  

To this perspective, Heirman and Clarysse collected a dataset on 99 research-based start-ups (RBSUs) and applied an event-history approach. From this they found that experienced entrepreneurs understand that innovation speed is important for many reasons, i.e.,

  • attracting – acquiring early investment to achieve more (greater) financial independence,
  • achieving broader external visibility and legitimacy for their innovation as quickly as possible, and
  • delineating the innovations’ competitive advantages as early as possible.

I agree with both Heirman and Clarysse that innovation R&D cycles can vary widely based on, among other things, the number and phases of product development, along with specialized technologies that may be required.  Being an intangible asset advocate and strategist no surprise here.

Collectively, this confers additional credence on the view that identifying inter-connected clusters of contributory intangible assets is important insofar as they may re-emerge at some point as enablers to another RBSU innovation. In other words, RBSU management teams should avoid dismissing or neglecting intangibles as if they are a single use asset. Too, it’s perfectly feasible that certain intangibles can be extracted from an already launched innovation to become independent sources of value and revenue.

Heirman and Clarysse also found that RBSUs frequently differ with respect to their starting conditions, for example…

  • start-ups which are further in their product development cycle (at founding) will likely launch their initial innovation (product) faster.
  • innovations that require a beta-version (test) will obviously experience slower product launch times.
  • experience level of startup founders and management team members can lead to faster launch times.
  • a start-ups’ alliance with other firms does not significantly or favorably affect innovation speed.
  • startups which collaborate with universities (perhaps as a spin-off, etc.) generally lead to longer innovation development and launch times.

As always reader comments are encouraged and welcome!

Islamic Intangible Asset and IP Law

January 19th, 2015. Published under Islamic IP, Uncategorized. No Comments.

Michael D. Moberly    January 19, 2015    ‘A blog where attention span really matters’!

It’s easy to find law firms with operational familiarity with G8 intellectual property laws, but, quite challenging to find firms’, particularly within the U.S., with IP practices that are attaching – sensing much urgency for acquiring a comparable level of (in-house) expertise with respect to Islamic (and Sharia) IP law. The underlying rationale for such initiatives lie in…

  • numerous geo-strategic and historical indicators that suggest that’s precisely what horizonal thinking-looking IP practices should be doing.
  • IP (and other forms of intangible asset) law inevitable requisites to enhancing – expanding IP practice space.
  • 80+% of most company’s value, sources of revenue, and ‘building blocks’ for growth, profitability, and sustainability globally lie in – directly emerge from intangible assets such as IP.

Collectively, these realities make it prudent for law firms’ to achieve business operational familiarity with non-western IP.

In other words, IP and other forms of intangible assets are now routinely – consistently in play, i.e., tactically and strategically integral to negotiation and outcomes of business development, operation, growth, profitability, sustainability, and most transactions.

Fortunately, there are a few academic papers that describe the foundational intricacies of Islamic IP and Sharia influence. A particularly useful paper which I frequently reference is authored by Silvia Beltrametti, titled ‘The Legality of Intellectual Property Rights Under Islamic Law’. religious

While I am confident Beltrametti paper was not intended as an instrument to sort out conventions of Islamic, western, and Asian IP (intangible asset) law for inevitable convergence, her work does provides countless definitions, explanations, and otherwise extraordinary useful insights,

Among other important aspects Dr. Beltrametti conveys is that Islamic IP rights are in their earliest stages of promulgation and/or regulation. A crucial question which I wonder is whether political turmoil and vitriolic rhetoric will subside at some point whereby the devout principles underlying Islamic (Sharia) law, particularly IP and other forms of intangible assets, can reach a point of intellectual, operational, and respectful convergence.

Some significant challenges are embedded in Sharia law’s primary sources; the Qur’an, the Sunna, Ijma and Qiya which are often applied synonymously with Islamic law as a whole.

Still, what I and I suspect many readers would agree, there are substantial challenges that will require time, trust, and commitment to resolve, assuming of course, there will, at some point be the political will, perhaps born out of mutual economic necessities, for the firmly embedded historical and spiritual perspectives to…

  • ameliorate the dominance of Western IP law
  • respectfully encompass Islamic perspectives of intellectual property rights, and
  • incorporate its interpretive flexibility and adaptability..

Conceivably, either could be respectfully applied to reflect global realities such as the economic fact that  80+% of most company’s value, sources of revenue, and ‘building blocks’ for growth, profitability,  competitiveness, and sustainability today reside in or emerge directly from intangible and IP-based assets.

As always readers comments are most welcome.

Intangible Assets and Counterfeit Apparel

January 13th, 2015. Published under Product counterfeiting., Reputation risk.. No Comments.

Michael D. Moberly   January 13, 2015   ‘A blog where attention span really matters’!

Here I contrast consumer’s expectation of sporting contest authenticity to growing consumer receptivity for purchasing counterfeit apparel and accessories. My views were inspired by a Frank DeFord commentary on National Public Radio and Dr. Dan Ariely’s book titled, ‘The Honest Truth About Dishonesty: How We Lie To Everyone, Especially Ourselves’ whom I have spoken.

Mr. DeFord says most sports fans care about and expect player and contest authenticity. They want contests to be genuine battles’ of player and coach tactics, wit, skills, preparation, training, and physical and mental ability and stamina, i.e., the intangible assets embedded in our sports psyche.

Growing percentages of sporting event consumers do not consistently exhibit preference for authenticity with respect to seeking-purchasing counterfeit (sports) apparel, i.e., indifference.

Dr. Dan Ariely’s research (Duke University) describes social-psychological principles that influence consumer receptivity to buying apparel and associated accessories which they know to be counterfeit prior to purchase which he designed various (human) experiments that focus on the forces that are at work, i.e.,

  • external signaling – the way we broadcast to others who we are by what we wear.
  • self-signaling – despite what we tend to think, we don’t have a clear notion of who we are but, generally hold a privileged view of our preferences and character.

The inference being, when we knowingly purchase counterfeit apparel one may act differently than those who purchase authentic apparel. For example, one’s conventional moral constraints are likely to loosen when we knowingly purchase, accessorize, and wear counterfeit goods. Once those moral constraints loosen, Ariely suggests, we become more receptive to the ‘oh, what the hell’ effect with many consumer rationalizations. For me, this begs the question, which is more powerful – influential, the…

  • negative self-signaling emanating from wearing counterfeit apparel?, or
  • positive self-signaling that comes with wearing genuine – authentic apparel?

Ariely also points to the potency and value of external signaling which can be substantially diluted as more legitimate – authentic supply chains become variously polluted with counterfeits.

Based on my own experience, the value of external signaling, as an intangible asset becomes even more diminished and/or undermined as the ‘quality’ of counterfeit apparel elevates and becomes difficult for consumers to distinguish from authentic branded/manufactured products.

Again, self-signaling and external signaling are clear examples of intangible assets whose value is connected to consumer preference via the proprietary intellectual and structural capital and trademarked logos, etc., embedded in authentic (licensed) apparel.

Presumed consumer preference for authenticity is slowing evaporating, to the point that buyer concern whether apparel is counterfeit is becomes secondary to cost, an aspect which is particularly troublesome for me. Too, I see nothing on the horizon that suggest otherwise. The cause of course will be a reflection (consequence) of changes in consumer attitudes about external signaling and self-signaling.

Having devoted a significant percentage of my professional career to safeguarding intangible assets, the increasingly efficient global product counterfeiting industry has already ‘geared up’ to accommodate consumers whose inclinations are changing. Ultimately, apparel designers and manufacturers must recognize that the positive effects derived from external and self-signaling represent the ‘intangible asset glue’ that hold company value, revenue, reputation, and brand, etc., together!

As always, reader comments are welcome and respected, and please read and submit a review of Mike’s newest book ‘Safeguarding Intangible Assets’




Intangible Assets in Russian Companies

January 13th, 2015. Published under Managing intangible assets. No Comments.

Michael D. Moberly   January 13, 2015    ‘A blog where attention span really matters”!

I had the pleasure to communicate/converse with Dr. Tatiana Garanina of St. Petersburg University recently to discuss her research titled ‘Value Creation in Russian Companies: The Role of Intangible Assets’.  What follows is a collaborative summary of that discussion.

Dr. Garnina’s research revealed that…

  • as much as one third of all investment solutions occurring in Russia are related to a company’s (existing) intangible assets.
  • business decisions-transactions allow management teams to make more accurate income and profitability projections including shareholder value.
  • management teams of leading (Russian) companies are more apt to acknowledge and understand that the key sources of their company’s value creation are irreversibly rooted in intangible assets.
  • Dr. Garnina distinguishes intangibles in Russian companies on the basis of their composition and structure which hrough her and co-researchers’ analysis of 43 (sampled) companies, intangibles were distinguished intangibles in five aggregated fields, i.e.,
  • mechanical engineering
  • extractive industry
  • power engineering
  • communication services, and
  • metallurgy.Drs. Garanina and her co-researcher Dr. Volkov also found that leading (Russian) companies are endeavoring manufacturing cost reductions, hence value creation, which translates as reductions in the value of their tangible/physical assets. Doing so advances another trend, which producing more intangible assets, i.e., intellectual, structural, and relationship capital, proprietary know-how and creativity.Some rovocative perspectives, offered by Drs. Garanina and Volkov offered are
  • Dr. Garanina astutely points out a key challenge for (Russian) management teams today creating conditions that will lead increasing the value of (their) intangible assets and therefore the value of their entire company, something which has global relevance far beyond the Russian border.
  • Admittedly, value creation through intangible assets represent a new component for business development in Russia but has yet to witness significant successes, particularly for companies still expressing reliance on conventional tangible (physical) assets. The leadership of these firms were less able to cope with the globally competitive markets.
  • related to the composition and structure of intangible assets, particularly intellectual capital. In many other research papers I have read, researchers describe the structure and/or composition of intangible assets and then try to define the primary component that (most) affects the assets’ ‘contributory’ value. Drs. Garanina and Volkov claim there is no known uniformity, i.e., means, mechanisms, etc., to address this aspect in Russian business as yet.
  • their views on (intangible asset) market capitalization value over periods of time. Even though, a number of theoretical works have stressed the strategic importance, as well as the role of intangibles as key value drivers for company’s competitiveness (Edvinsson, Malone, 1997; Sullivan, 2000; Wenner, LeBer, 1989); there remain, the authors believe, an absence of approaches to evaluate those mechanisms in terms of how intangible assets actual contributory value to a company. (Carlucci, Schiuma, 2007).

An obvious result, Garanina concludes is that more studies are needed in order to better understand…

  • the relationship between intangible assets,
  • the way these assets are clustered, and
  • their contributory role in value creation

As always, reader comments are welcome and respected, and please read and submit a review of Mike’s newest book ‘Safeguarding Intangible Assets’


Introspection, A Valuable Intangible Asset!

January 12th, 2015. Published under Managing intangible assets. No Comments.

Michael D. Moberly    January 12, 2015     A blog where attention really span matters!

A managerial resolution for 2015…Should you still be looking for a 2015 resolution, try engaging in more ‘introspection’!

Peering inward…Introspection means taking time to recognize the prudence of, at least periodically, directing ones thoughts inward, that is, to think about our actions, reactions, and responsibilities and how they relate outside our respective circles of professional specializations.

Professionally, I am convinced the managerial responsibility to be introspective is a valuable and positive intangible asset!  That is, a leader or management team’s recognition that introspection is a necessary and quite valuable attribute to possess, and, in the context of this post, a positive, strategic, and personalized intangible asset!

Knowing what you know and what you don’t know…Introspection as characterized by James Drogan, business professor at SUNY’s Maritime College is…

“…knowing what you know, knowing what you don’t know, and knowing who knows what you don’t know and  knowing, when things are going really well, you’ve probably missed something”.

For some readers I suspect, the language Professor Drogan used to characterize introspection, may sound eerily reminiscent of former U.S. Defense Secretary Rumsfeld’s response to a question posed to him during a Pentagon briefing regarding fighting in Iraq and Afghanistan, which to date, remains frequently characterized as being smug, arrogant, or perhaps somewhat dismissive, at the 30,000 foot altitude anyway, of the increasingly challenging events the U.S. military were experiencing in both countries.

Intangible value of introspection…On a more relevant note, Martin Christopher, Emeritus Professor of Marketing & Logistics at Cranfield’s School of Business (UK) and author of Logistics and Supply Chain Management, states that…

 “introspection is valuable, important, and perhaps even critical to successful business operations”.

I am wholly in agreement with Professor Drogan’s important characterization of introspection as well as the value which Professor Christopher attaches to introspection.

Introspection among colleagues, co-workers, superiors, and decision makers…It’s important to not go astray from my intended premise, which is, effective and consistent introspection by management teams and decision makers is a strategically valuable asset, albeit intangible, which most any organization and their management teams should aspire.

One example, during my 20+ years in academia is that I routinely observed students, both graduate and undergraduate, rapidly review and presumably assess written assignments in a manner similar to their approach to essay exam questions. In both circumstances, I sensed students had a felt need to speedily regurgitate all they assumed they knew about a topic, then leaving it to my interpretation, which I presume they hoped would track their intent.

I am confident many management teams and business decision makers have observed similar behaviors exhibited by colleagues. I am confident such habits, to be kind, have minimal introspective thought processes at work. Through my lens, introspection is absolutely necessary for effective, profitable, and sustainable business operation, particularly in today’s aggressively competitive, predatorial, and global business (transaction) environment.  So, introspection, should it become a respected attribute to a company’s overall management can also be a very positive and valuable intangible asset that favorably contributes to most any decision maker and/or managerial role.

Introspection is not self-doubt…Managerial introspection is not merely an exercise to confirm what one already believes to be true, rather introspection is a tool for self evaluation and review of pending activities or strategies. Introspection can be rooted in one’s desire to identify and assess a particular, usually strategic, path that provide a means to achieve an objective inner assurance, given the ever increasing array of potential variables, that a particular course of action is appropriate and that relevant obligations have been acknowledged.  In other words, introspection encompasses a strong sense of personal self-confidence which allows a manager – decision maker to be intellectually and operationally receptive to…

“knowing what you know, knowing what you don’t know, and knowing who knows what you don’t know and  knowing, when things are going really well you’ve probably missed something”

More specifically, Donald Clark raises other relevant issues about managerial introspection  in ‘After Action Review’, as he correlates introspection to learning…

“…what worked, what didn’t work, why it didn’t work,  what one needs to do about it to make it work and work better, and what one should do differently the next time’? 

Introspection is managerial self-confidence…I believe most management team members and business decision makers can practice introspection providing there is an environment in which self-confidence is appreciated and respected not confrontational arrogance  Unfortunately, I am short on examples of business leaders or managers who have successfully crossed the chasm of arrogance to introspection.

But, introspection is not solely about adding individual contributory value to their organization, rather, by extension, making a company more valuable, thus, an intangible asset positive!

What happens when managerial introspection is absent…When the elements of introspection are absent from a company’s routine strategic – tactical deliberative processes, i.e., ‘after action reports’. Through my lens, the absence of managerial – leadership introspection can be significant, particularly when it becomes a precursor for reputation risks to materialize.

Too, my experience suggests that in far too few instances do those in leadership roles recognize introspection to be an important skill set integral to personal, professional, and intellectual growth that will serve them and their company well.

Most readers are adept at projecting potential adverse outcomes for projects and transactions when leaders and managers lack of introspection.  The consequences can be severe, leading to the failure of a new business initiative, transaction, or an entire company.

It’s far from being a secret that people, as well as business managers and leaders possess an innate proclivity for gravitating and endeavoring to replicate tasks – behaviors which resonate as being…

  • relevant to a current challenge or problem, or they sense are
  • strategically necessary, i.e., personally, professionally, to achieve success.

But, through all of this, let us not overlook two things…

  • the economic fact that 80+% of  most company’s value, sources of revenue, and ‘building blocks’ for growth, profitability, and sustainability globally lie in or evolve directly from intangible assets, and
  • a manager or leaders’ desire and ability to be introspective is a respected and valuable intangible asset.

As always, reader comments are welcome!

Reputation Risk Management Using OPSEC

January 7th, 2015. Published under Reputation risk.. No Comments.

Michael D. Moberly    January 7, 2013    ‘A blog where attention span really matters’!

What is OPSEC…

As a methodology, OPSEC (operations security) emerged in 1967, during the Viet Nam war, when a small group representing relevant branches of the U.S. military were tasked to determine how adversaries, i.e., Viet Cong and the North Vietnamese Army, were obtaining information about forthcoming combat (air, ground) missions and able to use that intelligence to mitigate risk (damage) to their assets and personnel.

Among other things, the group learned in most numerous instances, there were ‘indicators’, i.e., routine and readily observable preparatory activities that signaled a pending military operation as well as its target. As adversary proficiency in identifying ‘indicators’ grew, they were able to distinguish indicators further on the basis of their relevancy to mission planning and preparation in addition the capabilities, intentions, and probable targets of the U.S. combat unit in which the indicators originated.

OPSEC’s purpose…

The original purpose for employing OPSEC in U.S. military and intelligence communities respectively, still today, is to deny the much larger number of adversaries advance notice of pending operations and their targets by exercising caution insofar as altering and/or disguising heretofore routine preparatory information, processes, and communications related to mission planning. This includes occasionally introducing subterfuges.

OPSEC’s relevance to reputation risk…

The principles of OPSEC, not unlike their Viet Nam era origins, but with some obvious adaptations, are very relevant to revealing company reputation – brand risks, particularly those which are festering under the surface, but when they rupture, often with the aid of communication mediums can instantaneously materialize with such sufficiency to…

influence rapid adverse reactions from investors, consumers, and other stakeholders throughout companies’ respective supply and production chains to rapidly place a project, product, or business initiative at financial, reputational, and competitive advantage risk and/or peril.

OPSEC principles are readily translatable to the private sector…

The principles of OPSEC remain widely practiced today primarily in the world’s intelligence communities, military mission planning, and have not gone unnoticed by most terrorist organizations. Respectfully, but fortunately, OPSEC’s very effective simplicity is resonating in the private sector, particularly in circumstances where secrecy and confidentiality for such transactions as R&D, product launches, and M&A’s, etc., are critical to execution and achieving projected revenues, efficiencies, and competitive advantages

Well practiced – executed OPSEC is not reliant on any particular IT application or system. In point of fact, its principles are the operational antithesis of the technical rigidity associated with computer/IT security (software) programs as well as overly presumptive deterrents and enforcement associated with intellectual property law.

Instead, OPSEC is dependent on project – enterprise wide internalization of its principles at each relevant level to consistently examine relevant activities, behaviors, and communications ‘through the eyes of global economic and competitive advantage adversaries’

Experience suggests, once the principles of OPSEC are articulated with timely examples of application specific (business) circumstances, management team reluctance for trying OPSEC on a project basis, dissipates and with further training, becomes intuitively practiced as self-evident assessment and analysis.

The distinguishing factors are, traditional practices, processes, and preparatory activities are framed through the eyes of global economic and competitive advantage adversaries. This means management teams and employees alike, are obliged to consider how the various steps, processes, and procedures they engage traditionally associated with executing a transaction or new business initiative in which the elements of secrecy and surprise are essential, will be translated when known by economic and competitive advantage adversaries.

Business rationale for incorporating OPSEC in your company…

For me, the most compelling rationale for integrating the principles of OPSEC to any business initiative, operation, or transaction insofar as mitigating, if not eliminating, reputation – brand risk lies in this economic fact…

80+% of most company’s value, sources of revenue, and ‘building blocks’ for achieving competitive advantages, profitability, growth, and sustainability evolve directly from intangible assets, i.e., intellectual, structural, and relationship capital, reputation, brand, image, and goodwill.

OPSEC is a practical, discreet, and intuitive process…

Having been consistently engaged in the information asset safeguard arena for 25+ years, I can say with considerable assuredness that global economic and competitive advantage adversaries have honed, to near perfection, their skills in business information (asset) analysis and compromise at their very earliest stages of development.

For example, it is possible today, often with the aid of specialized (competitive intelligence) software, to distinguish minutia of subtle and indirect indicators, i.e., information and processes that alert competitors to imminent business initiatives or transactions prior to any actual ‘go – no go’ decision has been made. What’s of equal value to competitors is the knowledge that an initiative or transaction is being considered and/or planned as compared to its actual execution.

By having this analysis, economic – competitive advantage adversaries can be better positioned to compromise, counter, or otherwise undermine the coveted and critical elements of secrecy and surprise.

State, corporate sponsored, and legacy free players engaged in economic-competitive advantage intelligence…

Understandably, state and corporate sponsored, as well as independent (legacy free) players globally, are predatorily persistent and aggressively engaged in competitive intelligence activities. Again, the objectives, for the most part are consistent, i.e.,

  • to reveal the plans, intentions, and capabilities which, if executed, would allow a competitor or client to achieve an economic and/or competitive advantage.
  • serve as the basis for competitors to mount various strategic actions specifically intended to at least moderate, if not wholly undermine any advantage a competitor believed they would achieve.

Aides to achieving those objectives lie in an array of off-the-shelf scanning technologies which can keep information acquisition and analysis at ‘arms length’ and within the parameters of legality and business ethics, yet available for prompt and effective analysis. Aside from these scanning technologies, some conventional competitive intelligence methodologies remain unethical at best, if not illegal depending in part the country they are being executed.

That said, I have heard management teams variously rationalize competitive intelligence activities as…

  • being the world’s second oldest profession.
  • every company – nation is doing it, why shouldn’t I.
  • the stakes of business initiatives and transactions have become so high that achieving ‘second place’ is neither an admirable nor profitable consolation.
  • my stockholders and stakeholders compel me to do it.
  • there is a consistent global market for business and competitive intelligence and analysis.

The term OPSEC is not routinely uttered in many c-suites or board rooms…

Admittedly, the term OPSEC is not routinely uttered in many c-suites or board rooms. My experience however has allowed me opportunities to effectively integrate OPSEC principles in several (private sector) engagements. Admittedly, some business management teams convey a dismissive attitude toward OPSEC by…

  • by questioning its cross-over (military to private sector) relevance, or
  • because it conjures off-putting connotations based on its Viet Nam war era origins.

Neither should deter exploring it further or incorporating it as an action item on either agenda.

But, let’s be clear, OPSEC is not a subterfuge for companies to conceal materialized reputation risks from public – regulatory scrutiny regardless of their causation. In other words, the principles of OPSEC are not a modus operandi for silence

OPSEC objectives to mitigate-eliminate risk to reputation and brand…

Instead, the principles of OPSEC are very proactive and call for consistent, thorough, and objective examination and unraveling of ways companies may be inadvertently or indirectly exhibiting indicators of pending business activities/transactions which are best executed if secrecy and surprise remain present without premature disclosure, e.g., the

  • initial objective then for companies practicing OPSEC are determining whether any exhibited indicators could, upon analysis, manifest as reputation risks,
  • second objective is to modify and/or eliminate the indicators, and the
  • third objective is to recognize that deploying OPSEC is not intended to wholly displace conventional (reputation) risk management initiatives, rather to compliment them!

I’m confident few management teams, c-suites, and boards would disagree with the view that a financially favorable (company) reputation plays an increasingly significant role toward achieving – meeting projected desirable outcomes to business initiatives and/or transactions, the probability of which elevates when the principles and practices of OPSEC are accepted, consistently applied, and appropriately practiced.

Ultimately, company management teams need to recognize the ever increasing array of techniques and circumstances in which specific risks – threats can materialize to temporarily or irreversibly dilute the (contributory) value of a company’s reputation and brand simultaneously.

Some proprietary intangible assets will not fit requisites of trade secrecy…

Management teams are obliged to recognize there are contributory and underlying intangible assets in play to a company’s brand and its reputation, some of which do not fit the requisites of trade secrecy. Those assets can however retain proprietary status and remain out of the public domain through effective use of OPSEC, e.g., for sufficient periods of time to allow companies to ensure their R&D is complete, new product launches are prepared, and other (contributory) intangible assets are positioned to achieve maximum surprise, projected revenues and competitive advantages before sector competitors (globally) can mount distractive counter move(s) to undermine all or a portion of those anticipated benefits.

OPSEC is a dynamic methodology for addressing risks to reputation and brand…

Management teams of intangible asset intensive and dependant organizations are obliged to recognize that reliance on conventional (stationary) safeguards, particularly trademarks, copyrights, and patents are, while presumptively required, generally insufficient insofar as a standalone safeguard methodology in today’s simultaneously aggressively, globally predatorial, and instantaneously competitive business, R&D, and transaction environments. That is, the strength of the onetime deterrent effects and presumed self-enforcement of conventional intellectual properties, i.e., patents particularly, are, through my lens anyway, approaching irrelevance aside from their providing reactive (legal) standing for litigation when, not if, infringement and/or theft occurs

Somewhat unlike conventional IP, OPSEC’s guiding principles remain very much intact, relevant, malleable, and bolstered by continued employee awareness and interest in…

  • examining – scrutinizing their preparatory behaviors, processes, communications, and activities through the eyes of their economic and competitive advantage adversaries.
  • continually fine tuning and making relevant adjustments to keep pace with new twists and variations of risks to intangible assets, i.e., reputation and brand.
  • risks/threats emanating from variously sophisticated state sponsored entities, legacy free players, corporate (business/competitive) intelligence programs, insiders, and the proliferation of independent ‘desk top’ competitive intelligence and information brokering operations.

OPSEC in practice…

As readers will find in the example below, a company’s ability to sustain the elements of secrecy and surprise, against the ever present reality of persistent reputational and brand risks lurking and probing for vulnerable targets, serves to enhance a company’s stature and become valuable and respected signals that will resonate throughout a market sector. Collectively, this contributes to a company’s reputational value and strengthens its relationship capital.

Too, as readers know, there are several industry sectors where enterprise wide – project secrecy and integrity with respect to R&D planning, marketing, and launch execution are sacrosanct. That is, they are mission critical underliers to achieve profitability and enhance reputation and brand.   The warp operating speed of the tech sector in particular, is a good illustration wherein safeguarding intellectual, structural, and relationship capital is related to most every projects ultimate success, and, by extension, a company’s reputation and brand.

As the world knows, the U.S, not unlike numerous other (G-8) countries, there are multiple ‘silicon valleys’, perhaps one of the more notable is California’s San Jose area where there are also untold numbers of sophisticated and globally predatorial competitor – business intelligence operations ongoing and have been since the Valley’s inception. That, coupled with a somewhat incestuous employee hire – downsize – fire – layoff – rehire environment, maintaining comprehensive project – product R&D and launch secrecy for a substantial period of time is, to be sure, a routine, but highly significant undertaking encompassing countless variables.

A colleague of mine, Mr. Greg Acton, CPP, CISM, is very deservedly, a highly sought after security executive throughout California’s Silicon Valley. Several years ago while Greg served as Global Chief Security Officer for a leading technology communications firm, he and his team were tasked with the responsibility for enterprise wide security – secrecy for a developing product and its projected launch at the annual ‘consumer electronics’ show, which is one of tech sector’s most desired and coveted product launch and showcase venues. As expected, Mr. Acton’s two year effort proved completely successful.

That is, there was no evidence of unauthorized – premature disclosures, adverse leakages to the tech ‘underground’ or media anyone of which, had they occurred, would have invariably and rapidly led to unmanageable speculation, little or no consumer – sector surprise, probable product piracy, significantly diminished competitive advantage in the products’ market space, and most certainly a much sullied and perhaps irreversible downward spiral to its reputation and brand as well as undermining – deflating the 300% increase in stock price Acton’s company enjoyed immediately following the products’ public unveiling at the show.  In addition to the company’s rapid stock spike, the VP of marketing informed Greg, in a congratulatory manner, the company had spent $1M on marketing the products’ lead up’ to the consumer electronics show.

In return for sustaining secrecy of the project for the two years prior, the VP also estimated the company received fifty times that amount in free advertising during and immediately following the show.  Collectively the efforts of Mr. Acton and his team solidified the product’s price point premium and the company/s brand and reputation. A strategy relied on to accomplish this feat was, in large part rooted in Greg and his teams operational familiarity with and application of the principles of OPSEC.

OPSEC’s key to success…

As noted previously, there are numerous ‘off-the-shelf’ tools and firms today which variously purport to mitigate reputation and brand risk. Respectfully, some firms and individuals offering such services, through my lens, constitute do-overs of previous, now less lucrative careers that (a.) emphasize tactically reactive approaches, versus (b.) strategically proactive processes, often emanating from the principles and practices of OPSEC.

Understandably, experience points to numerous management teams which have already staked out their company’s position about how to address – respond to materialized reputation and brand risk(s). For the most part, I find those positions are more closely resemble the former, i.e., ‘a’, vs. the latter, i.e., ‘b’.

When ‘a’ prevails, regardless of management team rationale, I encourage them to separately ask legal counsel, marketing, and accounting how much it will cost to try to retrieve their companies’ compromised or substantially diminished reputation and/or brand once risks have materialized and begin taking their financial and reputational toll.

Again, for companies to be consistently successful in today’s increasingly aggressive, competitive, and predatorial global business (transaction) environment, it’s important to routinely, systematically, and critically examine processes, activities, behaviors, and communications associated with company R&D, strategic planning, and product – service launch etc., through the eyes’ of economic and competitive advantage adversaries, to…

  • assess the adversary’s motivations, intentions, and capabilities to actually detect and exploit relevant intangible assets, and
  • eliminate, or substantially mitigate projects’ routine – accustomed preparatory activities, behaviors, processes, and communications that individually or collectively constitute ‘indicators’.

Correctly assessing both of the above can measurably decrease the respective ‘foot prints’ which most business initiatives unwittingly, but inevitably leave.

Stone v. Ritter, does it make OPSEC a fiduciary responsibility…?

Again, I respectfully, but strongly encourage management teams representing intangible asset intensive and dependant companies in which reputation and brand play valuable and integral roles, to objectively examine the principles of OPSEC for their suitability, regardless whether the firm is mature, maturing, Fortune ranked, early stage, a promising start-up, or small-medium size.

With fewer exceptions, any company’s actions and processes, i.e., indicators related to new products, services, or technologies will expose the underlying intellectual, structural, and relationship capital, and by extension, reputation and brand to an array of increasingly irreversible and certainly costly risks. Having processes and practices in place to mitigate, deny, and/or eliminate such risk is now akin to a fiduciary responsibilities that management teams, c-suites, and boards bear, i.e., See Stone v. Ritter,  911 A.2d 362, Del. Supr. 2006

An objective reading of the Stone v. Ritter concludes sustaining control, use, ownership, and monitoring value, materiality, and risk to intangible assets throughout their respective life, value, and functionality cycles is a responsibility management teams and c-suites should not dismiss or overlook.

OPSEC advocate and intangible asset strategist and risk specialist…

Taken further, through my lens as an OPSEC advocate, intangible asset strategist, and risk specialist, the fiduciary responsibilities emanating from Stone v. Ritter, also entails initiatives to discover, disguise, counter, and/or change even the most subtle of ‘indicators’ which, if they were recognized and used by an economic – competitive advantage adversaries, are all but sure to deny, or at least undermine and dilute the financial, reputational, and competitive advantages a company projected.

I am sure there are circumstances in which some organization may conclude it’s in their marketing – launch playbook to discreetly leak information about pending projects to spark consumer interest and elevate anticipation. For those companies that find such strategies are productive, I encourage them, before execution, to ensure their backside is duly covered.

But still, to allow ‘indicators’ to be externally observed and acquired either inadvertently or through negligence, will, with confidence, end up in the hands of competitors, providing them with ample time to mount counter initiatives. In large part this is due to the absolute proliferation of entities, organizations, and individuals globally engaged in the acquisition, analysis, and trading-brokering of business – competitive intelligence.

OPSEC, more art than science…

Deployed OPSEC can fit any company or managerial metric requirement even though its principles and benefits are largely intangible they can still be objectively measured.

Attempting to assign a contributory value to OPSEC (for a particular business operation or transaction) in traditional return-on-security-investment terms often becomes an exercise in trying to ‘quantify the negative’. For example, prior to a company implementing OPSEC its management team would prudently ask…

  • what risks will be prevented, eliminated, or mitigated?
  • how will those benefits manifest and be subject to measurement?

Instead, I encourage clients to reframe our initial engagement discussion and incorporate questions for ‘quantifying the positive’, e.g., what contributory value – competitive advantage enhancements will emerge following OPSEC’s implementation that otherwise would not have occurred? This, I believe is a more insightful and strategic methodology for assessing – measuring the impact of OPSEC.

OPSEC, increasing receptivity and confidence…

There remain a significant percentage of management teams, who have yet to be initiated to the asymmetric and extraordinarily rapid materialization (fire) of reputation-brand risks. That said, with more regularity, I find management teams who respectfully display a sort of vicarious intrigue with the principles of OPSEC which I attribute, at least in part, to the reality that OPSEC’s origins are rooted in secretive military operation planning and mission execution.

But also, I attribute management team receptivity to OPSEC due to its…

  • understandable and instinctive, but often overlooked obviousness, and
  • peoples base desire to address and sustain secrecy absent condescending reliance on non-disclosure and/or and confidentiality agreements.

The term (acronym) OPSEC has consistently been in the language action repertoire of the military and intelligence communities for 40+ years. But, as noted previously, the term OPSEC is seldom uttered in c-suites or boardrooms in favor of ‘mba light’, sometimes cryptic, and ever changing ‘buzzword’ language and phrasing.

One phrase that won’t change however, is the economic fact that 80+% of most company’s value, sources of revenue, and ‘building blocks’ for growth, profitability, and sustainability lie in or emerge directly from intangible assets’.

True, some millennial entrepreneurs, business owners, and decision makers find OPSEC’s 40+ year existence and its origins in military and intelligence circles as rationale for its obsolescence and irrelevance in somewhat of a context of contrasting cyber warfare to‘boots-on-the-ground (conventional) warfare.

Again, considering 80+% of most companies value and sources of revenue and competitive advantages today lie in intangible assets, it only seems prudent, in light of the increasingly sophisticated, surreptitious, aggressive, predatorial and global nature of economic-business competitive intelligence activities that company policy makers and action oriented management teams have an intellectual curiosity, coupled with fiduciary responsibilities, to sufficiently and consistently safeguard their company’s key, and in some instances, most valuable intangible assets, i.e., reputation and brand.