Archive for December, 2016
Michael D. Moberly December 31, 2016 ‘A business blog where attention span really matters’!
The methodology I developed to assess the contributory role and value of IA’s (intangible assets) is designed to influence – guide clients toward recognizing how-ways in which IA’s underwrite their company’s-businesses value, serve as starting points for generating revenue, competitiveness, and future wealth creation. This methodology commences by identifying-examining, among other things…
- centers or clusters of standalone, under-utilized, under-valued, or under-performing IA’s.
- how or whether key IA’s are (collaboratively) effectively interwoven to favorably influence a particular project, initiative, or transaction.
- how the IA’s collectively – collaboratively contribute to a company’s overall IA intensity and dependency.
- the compatibility of its IA’s with the company’s mission (statement), strategic planning, and its cultural – structural capital.
- the prevalence and speed which particular risks, threats, vulnerabilities, and liabilities manifest to adversely affect any-all IA’s in play.
- evidence of IA losses, compromises, materiality changes, and presence of current and/or horizontal risks.
- projected returns from its IA’s and contributions to the company’s competitive position within its market-sector.
- IA’s contributions to producing synergies, efficiencies for the company.
- how-ways which IA’s contribute to executing (new) market entry planning.
- evidence of IA’s contribution to enterprise wide (IA intelligent) company culture.
- how-ways which IA’s are incorporated into business continuity/contingency (organizational resilience) planning.
- life, value, functionality, and risk cycles of IA’s in play.
Regardless of the venue which clients-companies prefer for the delivery of IA advisory services, I consistently draw their attention to this ‘contributory value’ process. In large part, that’s because I believe this methodology reveals far more than conventional snap-shot-in-time portraits of IA assessment. IA’s contributory value is the asset’s assessed relationship, connection, collaboration with other IA’s within a company. After all, today, and for the foreseeable future, only 20+/-% of the stock price of S&P companies is explainable via conventional balance sheet – financial statement (book value).
The contributory value methodology framed above is executed with the view…
- that IA’s can exist as standalone or integrated clusters-bundles of intellectual, structural, relationship capital, and
- how those IA’s contribute to (current, future) projects, products, services, ventures, R&D, efficiencies, materiality, competitive advantages, and/or revenue streams, including foundations (or, building blocks) for company’s future wealth creation and sustainability.
The rationale for encouraging IA assessments – valuations be conducted using this ‘contributory value’ approach is to…
- provide business leadership with the frequently overlooked aspects about the integral role IA’s play in a company or transaction.
- develop descriptive paths (roadmaps) for company IA values, and materiality to be readily recognized, monitored, measured, safeguarded, and ultimately preserved, i.e., banked.
- provide business leadership with much needed and practical insight to optimize IA’s in timely (bottom line) relevance.
Michael D. Moberly December 30, 2016 ‘A business blog where attention span really matters’!
In the mid-to-late 1990’s, I had the good fortune and perhaps good sense, while faculty engaged in security-asset protection studies at Southern Illinois University, to read-study early products of a multi-year project undertaken by The Brookings Institution titled ‘Understanding Intangible Sources of Value’. This project was authored by a strong troupe of subject matter experts. In my judgment, ‘Understanding Intangibles’ remains a very insightful and illuminating treatise equal to the fine work on IA’s (intangible assets) developed-produced at prominent UK and Swedish institutions.
Then, as well as now, ‘Understanding Intangibles’ prompted debate and signaled change, away from tangible – physical assets to non-physical, intangible assets as the foundations to most company’s value and sources of revenue. In no small part, this change grew out of recognition that conventional financial statements and balance sheets, with their traditional reporting-accounting of tangible assets, to the exclusion of IA’s (intangible assets), no longer captured – painted an inclusive portrait of company’s actual financial wealth or health. That’s because growing percentages of companies globally, were engaging and benefitting from the ‘knowledge-technology era’ (which large segments of the world were immersed at the time). This era was largely spear-headed by the infinite depth, breadth, and range of IA’s, broadly categorized as being comprised of intellectual, structural, and relationship capital.
From the ‘knowledge-technology era’ emerged a shift to – dominance of IA’s, and perhaps, not so coincidentally, influenced further sophistication, influence, and growth of the…
- transformation of entire industry sectors, i.e., transportation, financial services, and telecommunications, etc., from regional and national, to global entities.
- development and integration of new technologies and companion (efficient) work processes.
- accessibility to globally coordinated and instantaneous (air, sea, land, and rail) supply and product-service distribution chains.
- the ability for new companies to enter markets – industry sectors and secure rapid returns and competitive advantages by the prudent investment, acquisition, development, and monetization of strategic IA’s.
- aggressive and predatorial market-sector entry tactics practiced on a global scale by ‘legacy free’ players and countries.
Collectively, these and other simultaneously occurring phenomenon intensified a global business investment and transaction environment, in which IA’s are consistently in play. Similarly and inevitably, certain parallel demands on companies would surface. That is, businesses seeking strategically sustainable tracts would be obliged to be continually engaged in innovation, ala IA’s, as one requisite to remaining relevant, competitive, and financially sound coupled with the necessity to develop and introduce new products, services, create efficiencies, and add-on’s through increasingly higher levels (quality) of IA inputs.
Of the numerous positive-lucrative outcomes to this phenomenon, one is that business innovation, competitiveness, value, revenue, profitability, and sustainability were being acknowledged by the forward looking-thinking business leaders as injecting and commoditizing targeted and relevant IA’s, particularly intellectual, structural, relationship, and creative capital at the right place, at the right time!
A second positive-lucrative outcome to this phenomenon was that IA’s were being universally recognized as primary conduits-foundations to business innovation, competitiveness, value-adds, and creating new sources of revenue. The realities, pressures, and intensity of global competition continued to pivot on IA’s. Spearheading companies that were already (effectively, efficiently, successfully) engaging their IA’s, as well as those businesses on strategic paths to do so, would, in all likelihood, remain operationally sustainable, competitive, and profitable.
Importantly, investments in the development and utilization of relevant and innovative IA’s would provide resonate clarity to the economic fact – business operation reality that 80+% of most company’s value, sources of revenue, and ‘building blocks’ for growth, sustainability, and future wealth creation were being fueled, almost exclusively, by business decisions rooted in enhanced awareness and appreciation for the contributory role and value of IA’s.
The prominent work of Baruch Lev (NYU, Stearn School of Economics) in the IA arena cannot be understated as being a consistent and forward looking-thinking contributor.
To be sure, his work continues to impact-influence the intangibles community which, in many respects, I believe, is encapsulated in his remark…’if intangibles are so risky, their benefits so difficult to measure and secure, and their liquidity (tradability) so low, how did they become the most valuable assets most companies possess’?
Michael D. Moberly December 29, 2016 ‘A business blog where attention span really matters’!
Business leaders and management teams are obliged, now, perhaps more than ever, to acknowledge the prudence of ‘banking’ (monitoring, preserving) the equity held within their company’s IA’s. That equity, ultimately manifests, aside from value and potential sources of revenue, etc., as reputation, image, goodwill, and relationship capital. Seldom, if ever, does IA ‘equity’ materialize very rapidly. Instead, it evolves over periods of time as consumers-customers-clients attach favorable and long term relationships with/to a particular product, service, or, in some instances, a specific employee, ala IA.
There are some companies and their management teams, of course, who, for a variety of reasons and rationales, have yet to distinguish or associate these attributes (assets), intangible as they are, as contributing to, or even being sources of value and revenue. Other business leaders, based on my experiences, remain dismissive of IA’s, particularly in the context of reputation and generating customer-client-consumer ‘equity’ that is capable of being saved or banked. Again, my engagement experiences coupled with volumes of client centered research bear out the perspective that business leadership who remain dismissive of their company’s IA’s and their ‘equity’ potential, will likely experience unnecessary challenges to profitably operate and compete in IA intensive and dependent environments, now common to the ‘go fast, go hard, go global’ space.
Another consequence to business leadership’s dismissive approach to the necessity for – practice of ‘banking’ IA equity, is that they will be hard pressed to develop a comprehensive portrait of their company’s real financial – competitive advantage health. In other words, the ‘portrait’ they will likely receive from conventional accounting will be incomplete at best, if it does not fully address-include IA’s. In addition, on the transaction side, if IA development, safeguards, value, competitiveness, and equity are not routine discussion and/or action items on c-suite agendas, this too will contribute to understating IA’s contributory role and value to business transactions, particularly (again) for IA intensive and dependent firms, which a growing percentage clearly are.
Collectively, these circumstances frequently elevate company-business propensity to the materialization of risk which can adversely affect companies in many different ways, one being reputation, e.g.,
• dilute value of the key IA’s, ala reputation, image, and goodwill which are routinely in play, and
• undermine anticipated-projected synergies and competitive advantages, by
• making key (in play) IA ‘s substantially more fragile and vulnerable to risk.
Each circumstance represents an example of where-when the respectful guidance and services of an experienced IA strategist and risk specialist can favorably intervene to reduce the probability, vulnerability, and criticality of adverse events-risks materializing.
Such risk circumstances highlight the over-arching premise that management teams, boards, and even stakeholders have (fiduciary level) obligations (ala Stone v. Ritter) to routinely and objectively ask; is this company effectively positioned to develop and sustain current skill sets and experience to…
• identify, unravel, assess, develop, bundle, utilize, and extract as much value and competitive advantage as
possible from its IA’s under its control.
• safeguard and monitor IA value and identify and mitigate risks which, if-when materialized, will
adversely affect assets’ contributory role – value, and sources of revenue.
It’s reasonable for business leadership to consider then, if these purposefully acquired skill sets are not be regularly practiced, little else may matter, because IA value, competitive advantages, sources of revenue, and IA’s underlying equity that’s in play, can very rapidly erode, be undermined, compromised, or worse, the asset’s value, and by extension, its equity, go to zero!
Michael D. Moberly December 28, 2016 ‘A business blog where attention span really matters!
As an IA (intangible asset) strategist, risk specialist, trainer, and speaker, it is my passion to guide companies and clients to recognize the business imperative to develop, assess, safeguard, and exploit their IA’s and convert them to sources of revenue, value, and competitive advantage!
As an IA strategist, the primary emphasis much of my work, on behalf of businesses and client’s, is its focus on ‘the revenue and competitive advantage side’. I find many companies and management teams invariably contend, some dismissively, others receptive to engaging the nuanced challenges and difficulties regarding their IA’s.
In the (IA) conversion processes, challenges may also emerge over control, use, ownership, and origination of particular IA’s. The materialization of either can impede not only the conversion process, but also, the projected and profitable execution of new initiatives or transactions when IA’s are in play, or possibly even provoke a party to, quite literally walk away. In today’s go fast, go hard, go global work (process) environments, unraveling and resolving business challenges or disputes about the utilization and value of IA’s warrant rapid and multi-faceted attention linked to strategic outlook and planning.
I am not suggesting all business challenges derive from misunderstandings or misgivings about IA’s, or, for that matter, adversely affect IA’s in play. However, accepting the universal economic fact that 80+% of most company’s value, sources of revenue, and ‘building blocks’ for growth, sustainability, and future wealth creation today, lie in – derive directly from IA’s, it’s prudent to expect there will be more business challenges related to the manner-in-which key – in play IA’s are – can be developed, acquired, valued, monetized, safeguarded, and applied in every conceivable type of transaction.
Moreover, IA development, valuation, application, and safeguards are being realized-accepted as business operation norms, not to be cordoned off as the exclusive (do not touch) domains of legal counsel and/or accounting. This makes it all-the-more essential to have, at the ready, sufficient IA operational familiarity from which deliberate, lucrative, tactical, and competitive decisions will emerge rapidly, and at will. Collectively, IA operational familiarity will mitigate most potentialities for the materialization of risk, impediments, and/or adverse (uncompetitive, non-producing) outcomes to new initiatives or transactions.
Large percentages of business relationships and transactions today develop-advance on-the-basis-of ultra-valuable and competitive advantage IA’s being in play. As such, the stakes and outcomes are consistently high. It is here that I believe, respectful and genuinely collaborative IA strategists – specialists, as myself, are positioned to…
• provide counsel – guidance for identifying, unraveling, and assessing (IA dominated) circumstances, and
• develop lucrative-competitive strategies to benefit company’s and/or client’s, mitigate risks, and identify
opportunities for further exploitation of IA’s.
To be sure, paradigms, ala the globally universal (business) shift, wherein today, 80+% of most company’s value and sources of revenue arise from non-physical – intangible assets, and substantially less so from physical – tangible assets warrants, in my judgment, respectful training, ample proof of concept, examples of successful application, and indeed, leadership. Unless or until I am invited into a business or client mass to execute each, excuses by leadership to ignore or dismiss IA’s and their contributory role and value that’s rooted solely in convention or past practice, is indeed, short-sighted.
My sense of being professional, i.e., a consultant, risk specialist, trainer, and speaker regarding matters related to IA’s is…
• not founded solely on a conventional business model of maximizing numbers of engagements and calculating-differentiating costs and revenue.
• to serve as a learned venue to respectfully articulate and elevate businesses operational familiarity with their IA’s, which is being achieved through my 720+ long form posts at the ‘Business IP and Intangible Asset Blog’ I created in 2006, and the 70+ national and international presentations, seminars, and invited (small group) discussions.
• to avoid commencing any engagement by undemocratically assuming my experience, intellect, and work products exceeds or subordinates comparable qualities held by companies, firms, management teams, and clients.
• to emphasize – demonstrate IA development must strategically mesh with revenue generation, value creation, and competitive enhancement.
• to bring relevance and clarity to IA operability that is embedded with respectful guidance for applying IA’s strategically, profitably, and mitigate, as much as possible, the inevitable risks.