Michael D. Moberly    April 27, 2010

An increasingly important requisite to a successful launch of new innovation or product is, as Apple knows better than most, not permitting prototypes to be left in bars.   For Apple, long recognized as the epitome of corporate secrecy, that particular incident was, to be sure, an anomaly. 

An increasingly important requisite to successful launches of a new product or innovation today, is not overlooking the economic fact-business reality that 65+% of the value underlying that launch are intangible assets!

Apple clearly understood this well, by virtue of the remote ’shut down’ capabilities it incorporated into its prototypes and could be executed once the absent minded engineer alerted the company to his blunder.  In the R&D world of prototypes and new product launches, be assured, there is no lack of adversaries, competitors, and a variety of other entities who are well positioned to instaneously exploit, if not influence, such opportunities (misques).

Thus, the effectiveness and success of new product-innovation launches today are increasingly dependant on protecting and sustaining control and use of any and all distinguishing and competitive advantage delivering features, i.e., those intangible assets embedded in the innovation-product.

The premature disclosure or compromise of any distinguishing or competitive advantage delivering feature or component, particularly in about-to-be launched innovation or products, will, for most company’s, present a substantial and generally irreversible economic - competitive advantage blow by, among other things, (a.) putting the company in the untenuous (undesirable) position of having to decide whether to waylay an already announced launch date, or (b.) advance a launch date in a not-so-disguised defensive effort to deflect or absorb any adverse publicity stemming from the reality that the product - innovation has probably already fallen into the hands of adversaries and/or competitors, been dissected, and the findings disseminated.  Depending on what the ‘finders’ objectives are, those findings may enter the public domain.

But, if/when the genie gets out of the bottle, an essential requisite for commencing recovery is no delay in discovering and/or being alerted to the incident.  Delays will complicate and weaken a company’s (legal) position and the possibility of achieving even a reasonably favorable outcome, i.e., retrieval of the intangible assets.

Integral to the asset - value recovery process is having conducted, in advance, a thorough intangible asset - competitive advantage assessment of the new product - innovation to identify each of the ’genies’ embedded in the product-innovation and what will be required to return them to their bottle while reducing the probability they could/would be acquired by adversaries or competitors in the interim.

A specialized intangible asset - competitive advantage assessment can position management teams to deliberate and act on two important points:

   1. The circumstances, priorities, and options relative to trying to (re-) establish ownership and/or (re-) obtain control and use of the, by now, economically - value hemorrhaged asset.

   2. Strategies to try to stop and/or mitigage further economic -competitive advantage hemorrhaging (of the assets), i.e., devaluation, undermining, public scrutiny and criticism, shareholder value, consumer goodwill, company reputation, etc.

Far too many companies lose, inadvertently relinquish, and/or become entangled in extraordinarily costly, time consuming, and momentum stifling legal disputes and challenges over the ownership, control, use, and value of their intangible assets and IP.  Frequent reasons are that management teams (a.) dismiss the fiduciary responsibilities of addressing the persistent and stealthy risks-threats to those assets and their value, and (b.) underestimate the role and contribution which their intangible assets make to successful and sustainable launches of new companies, ideas, and products!

I welcome your thoughts and perspectives.

Michael D. Moberly   April 9, 2010

In a 2006 ACCA study, the principle investigators (Chris Martin, Julie Hartley) stated that in most instances a company’s intangible assets could be imitated - replicated, presumably by competitors or other economic/competitive advantage adversaries, given (a.) sufficient time, (b.) resources, and (c.) incentives to do so.  So far, no big surprise here.

More specifically, the research report stated that (intangible) asset imitation correlated to the assets’ (1.) technological complexity, (2.) obsurity, or non-obviousness, and (3.) cost of replication.  Again, a pretty straight forward perspective.

The significance of this study, in my view, does not lie so much in the reality competitors will attempt to imitate/replicate others’ intangible assets, which occurs routinely.  Rather, the significance of this study is that it points to management/leadership team and board fiduciary responsibilities to exercise consistent  oversight and monitoring of their intangible assets’ status, i.e., value, revenue producing, and competitive advantage delivering capabilities.

Effective starting points to achieve this, in my judgment, are for management teams and boards to:

1. Be less passive and assuming about the development and evolution of their company’s intangible assets.

2. Adopt a much more proactive and aggressive role in developing and utilizing intangible assets as sources of value, revenue, and growth.

3. Put in place practices to effectively protect and monitor the assets (contributory value and performance) throughout their value and functionality cycles.

The key underliers to this lies with management team and board foresight and leadership to recognize two things, (a.) the inevitability that competitors and adversaries will endeavor to imitate others’ intangible assets if/when possible, and (b.) the importance of taking time during the (intangible) asset development and utilization process to integrate often times inexpensive, but critical features that will not only reduce the assets’ vulnerability to imitation, but also create disincentives to imitation, e.g., making the asset more:

1. Technologically complex that dis-incentivizes adversaries because replication requires incurring costs for the aquisition of new, perhaps specialized, technologies.

2. Obscure and non-obvious to competitors and adversaries in ways that they cannot readily observe or deduce.

3.  Costly to replicate by requiring time, resources, and costs comparable to the learning and development processes the originator of the asset experienced.

For management/leadership teams and boards today, the above represents not only prudent business practices, but fiduciary responsibilities as well.

Michael D. Moberly   March 22, 2010

This post is about competitive advantages.  First, it’s important to recognize that a company’s competitive advantages (business differentiators) are, in fact, intangible assets.  Second, in today’s globally predatorial, aggressive, and winner-take-all business (transaction) environment, a company’s competitive advantages must be durable.  That is, their status, stability, fragility, defensibility, materiality, sustainability, and value should be routinely monitored and assessed relative to (a.) vulnerability to duplication/replication, and for (b.) protection and improvement.

I have found the following definitions beneficial insofar as helping management teams and boards frame- conceive their company’s competitive advantages…

1.  they’re unique blends and/or collections of attributes, processes, assets, relationships, history, and even market conditions that a company exploits to differentiate itself, and thus create value. (Michael Porter).

2. they lie in the unique proprietary knowledge employee’s possess, and the special value that evolves from understanding of how to apply that (unique) knowledge that provides the real edge. (McKinsey)

Of course, in both definitions, the word ‘unique’ is, and should be the common framing point.  But, with increasing frequency, sustaining competitive advantages is challenging for company management teams and boards, in part due to the realities that significant percentages of (a.) all new products, and (b.) business service improvements and efficiencies can be, and usually are, duplicated, replicated, or diffused to global competitors in briefer periods of time from the point they became operational.  In other words, competitive advantages, like most other intangibles are consistently vulnerable and at risk!

As effectively conveyed by Ed Adkins (mystrategicplan.com) developing competitive advantages isn’t always easy or straightforward, because, in many instances, competitive advantages are developed (over a period of time) by recognizing and then nurturing a company’s strengths.  In some instances, this longer internal process, can render them more difficult to replicate, or, at least not replicated as quickly.

Regardless, when 65+% of most company’s value, sources of revenue, foundations for growth and sustainability directly evolve from intangible assets, e.g. competitive advantages, ensuring they’re routine action items on management team and board agendas for oversight, will be beneficial! 

Michael D. Moberly   December 17, 2009

In this knowledge-based economy, two significant phenomena have emerged which individually and collectively exacerbate the challenges, and add complexity, to our respective campaigns to more effectively protect proprietary information, competitive advantages, intellectual property, and other increasingly relevant and valuable intangible assets, i.e.,

1. the global interaction between economics, intangible assets, technologies, and the persistent demand for growth in company ‘bottom lines’ and country GDP and trade.

2.  the reality that the business (transaction, innovation) landscape is no longer shaped solely by the flow of physical goods and services, rather by the development and flow (buying, selling, trading, merging, exchanging, etc.) of intangible assets. 

These realities, or ‘the new rules of engagement’ foster many new and asymmeric challenges to safeguarding those assets, e.g., (a.) ensuring they remain intact and/or bundled for the most effective, efficient, and profitable use, (b.) their value is sustained to produce/deliver sources of revenue, sustainability, and future wealth creation, and (c.) the control, use, and ownership of those assets remain indeterminately with the rightful holders/owners!

For starters, initiatives - action plans designed to safeguard intangible assets should be flexible and maneuverable, not one dimensional, nor static. That is, intangible asset safeguards should focus on sustaining control, use, and ownership of those assets relative to (a.) their respective life-value-function cycles, and (b.) their continued materialiy, i.e., relevance, linkage, contribution to current/future projects, competitive advantages, and company value.

Michael D. Moberly   December 11, 2009

A reality of many security-asset protection initiatives executed in companies is that a significant percentage are more reactive than proactive.  While there are many understandable reasons for this, its imperative for know how (intangible asset) intensive-dependant companies operating in go fast, go hard, go global nanosecond business (transaction) environments become exclusively proactive and forward looking in their practices to safeguard their assets by recognizing…

1. the necessity to anticipate, assess, and secure the resources necessary to counter the increasingly  diverse and persistent risks and threats to company’s intangible, rather than, tangible (phyiscal) assets.

2. the (general, specific) deterrents presumed to be naturally evolving by-products of asset protection systems and/or technologies are frequently marginalized today by (a.) the shear volume of risks-threats, (b.) their technological - predatorial sophisticatation, and (c.) the asymmetric finesse in which those risks and threats are executed.

Why is this model necessary for IP-intangible asset intensive companies?.  It’s because, in most situations, the consequences - adverse affects of intangible asset (IP) losses, compromises, value/competitive advantage undermining are immediate and frequently irreversible, i.e., once lost, compromised, or undermined, the value, revenue, competitive advantages, and/or strategic positioning those assets brought to a company are seldom, if ever fully recoverable in a timely manner to recoup (lost) competitive advantages and/or market position.

Therefore, on-going practices, procedures, and/or systems to sustain (protect, preserve) control, use, ownership and monitor the value and materiality of a company’s intangible assets, should routinely be on c-suite and board agendas and high (fiduciary) priorities for security directors (CSO’s), legal (IP) counsel, and CFO’s.

Michael D. Moberly   December 9, 2009

Chief Security Officers (aka corporate directors’ of security) are typically charged with identifying viable strategies (solutions) for protecting ‘what matters’ most to their company (employer).  There are numerous variables that enter that equation, i.e., actually determining - reaching consensus about where security resources are best (should be) directed.  

Sometimes ‘return on security investment’ (ROSI) enters into the equation mileau, while other times those variables evolve around the nuances of an industry sector, past practice, perspectives of the c-suite and/or general counsel, or are driven by ’events and challenges of the day’ posed by increasingly sophisticated, predatorial, and global adversaries with a truly asymmetric repertoire for executing harm.

While company’s (and CSO’s) have been consistently concerned with, and generally sucessful in (a.) protecting company assets that deliver value and profits, and (b.) mitigating those risks/threats that adversely affect the consumation of that value and profit making ability, there has been a significant shift in the source-origin of that (company) value and profit potential.  The dominant sources-origins of company value and revenue are no longer centered in tangible-physical assets, rather in a range of intangible assets that company’s produce and/or acquire.

In fact today, its an economic reality (globally speaking) that 65+% of most company’s value, sources of revenue, durability, and foundations for future wealth creation and sustainability lie in - are directly linked to (a company’s) intangible assets, not its tangible (physical) assets.

C-suites and CFO’s correctly gravitate to - focus on, as a matter of fiduciary responsibility, their company’s sources of revenue and value.  So, it is incumbent on CSO’s to acquire the relevant insights to their company’s intangible assets and/or find intangible asset protection specialists who can respectfully provide experienced perspectives necessary to affect that transition - cross that chasm to genuinely meet the asset protection and security challenges being presented by knowledge-based economies, e.g, (a.) the ability to anticipate the nuanced and extraordinarily sophisticated risks-threats to intangible assets, (b.) recognize the various ways those risks-threats can adversely affect the intangible assets being targeted, and (c.) develop effective tools to sustain (protect, preserve) indeterminate control, use, ownership, and value of the ever growing array of intangible assets.