Intangible Assets and Business Pundits

April 26th, 2017. Published under Business Transactions, Communicating Risk, Intangible asset focused company culture.. No Comments.

Michael D, Moberly April 26, 2017 ‘A business intangible asset blog where attention span really matters’.

I suspect, not unlike numerous other skill set rich professions, those who have achieved operational familiarity and experience with IA’s (intangible assets) are quick to recognize when punditry and otherwise self-described SME’s (subject matter experts) weigh in on business matters such as IA’s, that clearly exceed their knowledge base and merely offer generalizations absent experiential specifics that result in sending misleading, simplistic, or even incorrect messages.

For example, I find it frustrating, and certainly a disservice when a pundit speciously characterizes an under-performing business, or transaction as being the consequence of a single misstep, miscue, or oversight by business leadership and/or management team. In part, that’s because my work has occasionally been construed as ‘michael claytonish’ ala ‘an intangible asset fixer’ (from the film titled ‘Michael Clayton’ played by George Clooney).

When clients describe the various services that I perform on their behalf (in the context of intangible asset strategist, risk specialist, and trainer), as ‘fixing their intangible asset circumstances’, that seems fitting.

On the other hand, not infrequently, when a business undertakes – executes what may appear to a pundit at the time, to be a particularly challenging, perhaps even overly risky business venture-transaction which is then reviewed by a competent and objective IA strategist and risk specialist, it will be revealed that a key – underlying reason for any subsequent under-performance or transaction withdraw, or failure is variously attributable to operational – circumstantial unfamiliarity with, how, when, why, where, and which IA’s were in play but, not acted on effectively, lucratively, or competitively, or worse, insufficiently safeguarded, monitored, or mitigated risks.

In short, the planning and execution of an under-performing transaction, its failure, or, one or both parties electing to ‘walk away’ is more often variously attributed to unfamiliarity, operationally speaking, with the intangible assets in play and most relevant to the projected outcome.

To be sure, IA unfamiliarity, which frequently translates as the omission of IA’s from transaction planning, execution, and due diligence, leaves their contributory role and value and anticipated sources of revenue and competitiveness (irreversibly) out of a business transaction’s ‘go, no go’ equation, and ‘off the transaction negotiating table’.

By doing this, the dominant drivers and ‘underwriters’ to most every business transaction, i.e., the IA’s which are inevitably in play, become vulnerable to various types-levels of risk, e.g., competitive advantage under-mining, rapid erosion of (asset) value, and/or asset compromise. Any one, or multiples of such risks, can negate or substantially minimize any projected-desired outcomes to a transaction, irrespective of sector or stage of execution.

Through my lens of experience, many challenges associated with resolving business process problems and/or poorly planned-executed transactions that originate in unfamiliarity with or not recognizing IA’s in play are redeemable. Through numerous engagements, I have concluded many such challenges are variously due to IA’s being ‘non-physical’ and therefore, outside conventional-human senses, i.e., see, hear, touch, smell, etc. Consequently, this (asset) ‘intangibility’ combined with the reality, IA’s are seldom, if ever reported on conventional financial statements or balance sheets, somewhat understandably, influences business leadership and management teams to exhibit hesitancy and reluctance to consider IA’s as relevant players and/or contributors to company value, competitiveness, revenue, or sustainability.

This author’s forthcoming book respectfully mitigates most, if not all such reluctance and hesitancy by ensuring thorough, relevant, and practical explanations and rationales are in place to address the various contexts – circumstances in which IA’s are in play through their contributory role and value.

It is true, a percentage of business leadership, remain variously dismissive and under-appreciative of IA’s, i.e., what they are, and how to utilize (exploit) them effectively lucratively, and competitively, in other words, their contributory role, value, and competitive advantages they can, and often do produce. Not so coincidentally then, when IA’s are treated dismissively or wholly neglected, their contributory value will be significantly weakened, conceded to competitors, or relegated to the non-denominational and virtually unusable ‘catch-all’ of goodwill.

Either way, I find there is no single mechanism to overcome these real and detrimental shortcomings, aside from seeking – achieving operational level familiarity with IA’s for which one has control, use, ownership, and (certain fiduciary) responsibility to safeguard, exploit, monetize.

Consistently however, practitioners that possess operational familiarity with their various IA’s in play to a transaction or initiative, i.e., as direct components – contributors to projected value, revenue, competitive advantages, and marketing and branding outcomes, also recognize – have operational insights about how IA’s have direct bearing on company value and revenue, which extends well beyond merely what’s posted on conventional financial statements and balance sheets.

The position conveyed here, and throughout my forthcoming book, is that exclusive reliance on conventional financial statements and balance sheets as strategic oracles for business operation and transaction planning, but, absent factoring essential IA-related data, will likely lead to arbitrary, subjective, and unsystematic tracts for execution. However, with the rapid expansion of effective, competitive, and lucrative business operability, i.e., IA intensity and dependency, provides credence and rationale due for business leadership and management teams to recognize IA’s contributory role and value, which this book and this author consistently argue, are warranted.

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