Archive for June, 2009
June 30th, 2009. Published under Analysis & Commentary: Studies, Research, White Pap, Business Applications, intangible assets. No Comments.
Michael D. Moberly June 30, 2009
The Ohio Supreme Court ruled that the use of protected trade secret information by a former employee who had memorized it during the course of his employment violated that state’s trade secret law. Specifically, the Court held that trade secret information does not lose its character as a trade secret (under the U.S. Trade Secret Act) merely because a former employee (a.) memorized it, rather than (b.) writing it down, or (c.) copying it in some ‘tangible’ medium. (Al Minor & Assoc., Martin Slip Opinion No. 2008-Ohio-292)
Those responsible for designing policies and procedures and executing agreements to sustain the proprietary status (secrecy) of a company’s information assets, this ruling will surely hasten more collaboration or even convergence of their respective responsibilities, especially in light of the economic fact that today, 65+% of most company’s value, sources of revenue, sustainability, and future wealth creation lie in – are directly linked to intangible assets and intellectual property.
The Ohio Supreme Court’s ruling will also likely serve as an impetus for information asset protection management specialists and intellectual property counsel to review the agreements, policies, procedures, and practices they have exectuted to…
1. Ensure they reflect the adage that ’all trade secrets start life as ideas’. In other words, its imperative that the origins of those ideas (trade secrets) are fully unraveled to reveal their status, stability, fragility, and sustainability. These actions are particularly relevant preludes to any transaction in which intangible assets and/or IP are in play – part of a deal, i.e., mergers, acquisitions, venture capital investments, coprorate-university alliances, etc. Unraveling assets’ origins (upfront) will mitigate the probability they will, at some point, become ensnared and/or entangled in costly, time consuming, and momentum stifling disputes or challenges.
2. Ensure employee exit interviews fully address the parameters of the Ohio Supreme Courts’ ruling about memorizing and subsequently using trade secrets. This is especially relevant to employees who have access to and/or utilize a company’s proprietary – competitive advantage information and trade secrets.
3. Elevate the relevance of non-disclosure and non-compete provisions in employment contracts’ insofar as ensuring those provisions are routinely updated relative to employee attrition, promotions and/or lateral movements within a company.
To be sure, the ruling will have significant impact how company’s should go about sustaining control, use, ownership and monitor the value of its proprietary information and trade secrets!
In summary, the Ohio Supreme Court said it is the information that is protected by the USTA, regardless of the manner, mode, or form in which it is stored, i.e., whether its on paper, in a computer, in one’s memory, or, exist in other mediums.
June 29th, 2009. Published under Analysis & Commentary: Studies, Research, White Pap, Fiduciary Responsibility, intangible assets. No Comments.
Michael D. Moberly June 29, 2009
Rob McLean’s fine article ’Intellectual Asset Strategy and the Board of Directors’ (IAM December/January 2006) still carries considerable relevance today, particularly his analysis that ’boards are frequently drawn into intellectual asset management issues (only) when there is a crisis, such as a lawsuit involving IP rights’. Unfortunately, ‘few boards’, McClean points out, ‘deliberately allocate time to intellectual asset issues as a matter of course’.
There is a growing body of anecdotal evidence however, that indicates boards and management teams of most all company’s, regardless of size, lack interest and/or appreciation for the (a.) fiduciatry responsibilities associated with stewarding, overseeing, and managing intellectual (intangible) assets, and (b.) administrative necessities that intangible assets become routine fixtures (action items) on board and management team agendas. One consequence of this lack of interest and appreciation for intangible assets in terms of their contributions to (company) value, sources of revenue, sustainability, and future wealth creation, is that a lot of (company and/or transaction) value is literally overlooked, neglected, or dismissed and ultimately left on the proverbial negotiating table unrecognized by its rightful owner.
With respect to boards’ and their management teams’ actually engaging intellectual property and intangible assests as (a.) business management decisions, rather than (b.) separate legal processes, Mr. McLean describes four levels of awareness and understanding…
Level I – boards’ and management teams are generally unaware of the importance of intellectual (intangible) assets and related strategies relative to company strategy or competitive industry trends.
Level II – boards’ and management teams may be peripherally aware that intellectual (intangible) assets have some importance in strategy and competitive trends at the company level.
Level III – boards and management teams may have a high-level understanding that intellectual (intangible) assets have some importance in strategy and competitive trends at the company level.
Level IV – boards and management teams have a detailed understanding of the role that intellectual (intangible) assets and strategy play in strategic planning at both the company and business unit level.
Speaking volumes, McLean believes that if boards and management teams ’are being honest, most would characterize themselves at (just) Level I or II’.
As insightful as the ’level approach’ is, its equally important to send unequivicol messages to boards and management teams that say, however full your respective company management plate is, consistent stewardship, oversight, and management of intangible assets, with special emphasis on sustaining, enhancing, positioning, leveraging, and extracting value from them, should be permanent fixtures on business agendas.
June 26th, 2009. Published under Analysis & Commentary: Studies, Research, White Pap, Business Applications, intangible assets. No Comments.
Michael D. Moberly June 26, 2009
An intangible asset assessment is not merely a warmed over version of an intellectual property audit. Rather, an intangible asset assessment produces actionable outcomes largely geared toward identifying, assessing and, most importantly, utilizing a company’s intangible assets to further contribute to (company) revenue, value, competitive advantages, and sustainability. The assessment itself should include flexible protocols that reflect each company’s nuanced circumstances relative to the contexts/formats in which their intangibles’ are produced, exist, and contribute to value.
Intangible asset assessments can have multiple purposes and objectives, often depending on the company and its management teams’ familiarity with and receptivity to engaging and utilizing their intangible assets, i.e.,
1. recognize what intangible assets a company already has and produces and how those assets influence – contribute to company value, revenue, competitive advantages, image, goodwill, and reputation, etc.
2. bring economic and competitive advantage clarity to intangibles for near term and strategic application by demonstrating how to effectively utilize, leverage, and/or bundle the intangible assets to further contribute to (extract) value.
3. describe ’best practice’ management, stewardship, and oversight techniques to ensure the assets’ value, use, control, and ownership are (a.) sustained throughout their respective functional life/value cycle, and (b.) aligned with core business competencies, mission, and strategy (vision).
4. identify and mitigate risks-threats that elevate the vulnerability-probability that the assets will become ensnared and/or entangled in costly, time consuming, and momentum stifling legal challenges and disputes that can undermine and/or erode their value and competitive advantages.
June 25th, 2009. Published under Analysis & Commentary: Studies, Research, White Pap, Business Applications, intangible assets. No Comments.
Michael D. Moberly June 25, 2009
The stewardship, oversight, and management of a company’s intangible assets should no longer be considered passive or optional responsibilities, i.e., I’ll do it when I have time, when I see competitors doing it, or when the government enforces its mandates to do it. Neither should those responsibilities be delegated (relegated) to the unitiated, i.e., those who are dismissive of the economic fact that increasing percentages (65+%) of most company’s value, sources of revenue, competitive advantages, and sustainability lie in – are directly linked to intangible assets!
Too, managing, overseeing, and stewarding a company’s intangible assets need not be extradordinarily time consuming or resource intensive undertakings. Rather, what’s required upfront is merely being receptive and committed to learning what intangible assets are and how they interact with – contribute to a company’s value, revenue, brand, competitive advantage, image, goodwill, reputation, and sustainability, etc.
There are five fundamental and relatively straightforward steps to better management of a company’s intangible assets:
1. Conduct a thorough assessment of internal processes, practices, and procedures through an intangible vs. tangible asset lens to identify and unravel each assets’ status, i.e., primarily its stability and contribution to revenue, competitive advantages, and overall value of the company.
2. Develop a ‘map’ of the company’s intangible assets, i.e., producers, location, value, contributions, and internal-external linkages.
3. Develop and integrate (stewardship, oversight, and management) techniques to ensure the value and revenue attributed to the intangible assets is sustainable, i.e., their value, control, use, and ownership is protectable, defendable, and preservable!
4. Identify specific strategies to better utilize those assets, i.e., position, leverage, and extract value and align them with a company’s core business and strategic planning!
5. Put in place practices to consistently monitor the assets, i.e., to sustain, maximize, and extract as much value as possible.
(This post represents significant modifications by Michael D. Moberly from the research of Nick Bontis.)
June 24th, 2009. Published under Analysis & Commentary: Studies, Research, White Pap, Business Applications. No Comments.
Michael D. Moberly June 24, 2009
Serious financial times, like today’s recession, demand equally serious strategies to elevate the probability company’s will survive! Since the economic downturn began, there have been countless business management playbooks and articles produced describing a variety of presumably ’shovel ready’ strategies for countering – mitigating adverse affects of the recession. But, while there is no other time in modern business management history when intangible assets are more relevant to a company’s sustainability, strategies focusing on better utilization of those assets are frequently overlooked.
Interestingly, intangibles’ constitute frequently valuable and potentially monetizable assets that most company’s already possess which, with familiarity and skill, can be utilized - leveraged to not only genuinely help weather this recession, but also lay substantive foundations for a more successful post-recession future.
Management teams retaining a bricks and mortar – tangible asset orientation however, may find it challenging to appreciate just how a company’s intangible assets can represent viable paths to survivability? It’s difficult to dismiss the economic fact though, that increasing percentages (65+%) of most company’s value, sources of revenue, and competitive advantages today lie in – are directly linked to intangible assets!
Better utilization of company intangible assets now, is a beneficial exercise, the fundamentals of which include:
– learning the various forms intangible assets take and how to identify, unravel, and assess the intangibles a company has already produced and/or acquired.
- identifying the various ways which intangible assets contribute to – deliver (company) value, revenue, competitive advantages, and serve as foundations for future growth and sustainability.
- identifying best practice (stewardship, oversight, and management) techniques necessary for positioning, leveraging, and extracting value from intangibles.
Better utilization of intangible assets may not be the silver bullet that will single-handedly allow a company to survive the recession completely unscathed. However, management teams and company’s that acquire an appreciation and operational familiarity for intangible assets will be rewarded because their initiative will truly produce multipliers and deliver returns!
June 23rd, 2009. Published under Analysis & Commentary: Studies, Research, White Pap, intangible assets. No Comments.
Michael D. Moberly June 23, 2009
All too frequently the contributions and competitive advantages intangible assets deliver to a company are overlooked, neglected, or outright dismissed. There are a variety of reasons for this, the larger one probably being their lack of physicality which presents management teams with challenges insofar as measuring their performance and value and fitting them on company balance sheets.
In most instances though, a company’s intangible assets are akin to the proverbial ‘can’t see the forest for the trees’. That is, while they’re often openly embedded in routine operations, processes, and functions, they frequently fall under the conventional ‘mba’ radar that tends to focus on tangible-physical assets.
Familiarity though, with a company’s intangible assets, will contribute to producing numerous multiplier effects and risk mitigators, five of which are…
1. Adding predictabiliy to business transaction outcomes when intangible assets and IP are in play by recognizing (assessing) such factors as asset stability, fragility, sustainability, and defensibility which, in turn, elevates the probability for sustaining their control, use, ownership, and value pre – post transaction.
2. Reducing the vulnerability and criticality to costly, time consuming, and momentum stifling legal challenges and/or disputes by recognizing circumstances early that can ensnare or entangle the assets in ways that will impede, erode, or undermine their value, competitive advantages, and/or performance.
3. Providing a foundation for more effective use of intangibles through synergies with knowledge management programs, the balanced scorecard approach, and reporting and valuation mandates in Sarbanes-Oxley and FASB 141, 142.
4. Building a ‘company culture’ focused on producing and sustaining its intangibles and providing timely recognition about their use, performance, ownership, and value.
5. Developing more effective business continuity – contingency plans by including a company’s intangible assets to achieve stronger and quicker recovery strategies following a significant business disruption and/or natural disaster.
June 22nd, 2009. Published under Analysis & Commentary: Studies, Research, White Pap, Business Applications, Fiduciary Responsibility, intangible assets. No Comments.
Michael D. Moberly June 22, 2009
’In The Dark: What Boards And Executives Don’t Know About The Health Of Their Businesses’ is the title given to a survey conducted by Deloitte and The Economist Intelligence Unit which produced three, somewhat conflicting, findings:
1. The survey’s first key finding is that company boards and senior management are recognizing the importance/necessity of monitoring (their company’s) non-financial performance indicators. The survey respondents identified four factors that drive them to monitor their company’s vital signs, (a.) increasing global competition, (b.) growing customer influence, (c.) greater awareness of risks to company reputation, and (d.) accelerating product innovation. (Please note all four factors are intangible assets!)
2. The survey’s second key finding is that despite the growing importance/necessity expressed by company boards and senior management to measure (their company’s) non-financial performance indicators – vital signs, many are struggling to do so because of (a.) the lack of sophisticated (sufficient) monitoring measures, and (b.) some doubts that they truly matter!
3. The survey’s third key finding was that an overwhelming majority of the survey’s respondents (board members and senior management) described (a.) customer satisfaction, (b.) service quality, (c.) efficiency and effectivness of business processes, (d.) brand strength, (e.) innovation, and (f.) quality of relationships with external stakeholders as being essential drivers to their company’s success. (Please note again, each of the six factors are intangible assets!)
Today, each of the survey’s key findings can be effectively addressed (mitigated) by elevating overall familiarity with intangible assets, particularly, company specific intangibles that have been developed, produced and/or acquired. And, once greater clarity, relevance, and context for intangible assets is acheived, i.e., strategies for identifying, unraveling, sustaining, positioning, leveraging, and maximizing value, it will be become much clearer to boards and senior management:
- what type of (company specific) performance indicators need to be developed and executed in order to monitor those non-financial (company) vital signs, and
- the level of stewardship, oversight, and management necessary (of the intangibles) to effectively act on those performance indicators.
June 15th, 2009. Published under Analysis & Commentary: Studies, Research, White Pap, Looking Forward. No Comments.
Michael D. Moberly June 15, 2009
Information asset safeguards must be flexible and maneuverable! Most information asset safeguard initiatives are one dimensional. They tend to remain constant throughout the life – value cycles of the assets being protected and do not fluctuate with gradational (routine, periodic) changes in their value, relevance and/or currency to on-going or future company programs or projects. Exacerbating this, in today’s hyper-competitive and nanosecond global business environments, is the reality that the value and relevance of information assets, in general, is becoming increasingly compressed and short-lived relative to their support for and/or linkage-contribution to specific (company) tasks, processes, or operations. Therefore, business information asset safeguards must be sufficiently flexible and maneuverable to reflect fluctuations in, not only value and relevance, but also, risks, threats, and vulnerabilities as well.
Avoid ‘pushing the future off the table’! Each day company’s are presented with urgent, near term challenges that create pressure to push the future off the table. One consequence is that, lacking effective strategic planning, disproportionate weight is given to the persistant chorus of sources offering largely speculative and worst-case scenario snap shots about particular risks and threats to business information assets and/or information systems. While the potentially devastating consequences of these pronouncements should not be dismissed, neither should they serve as the exclusive rationale for the design and execution of business information asset safeguards. Instead, adopting capability and value-based strategies represents more forward looking, efficient, and holistic approaches for safeguarding valuable and (company) critical information than those sometimes narrowly focused and time-bound mini-risk/threat assessments.
Safeguarding business information assets should also be about fostering relationships! Any company initiative to sustain control, use, ownership and value of their business information assets must include efforts to foster positive relationships by engaging the originators, developers, users, and owners of that information. One reason for a company’s lack of emphasis on fostering such relationships is the perception that computer/IT system security equates with information asset security when, in fact, it does not! Computer/IT security, while critical to most every company, would best be characterized as complimenting, rather than dominating, strategies to safeguard company information assets.
June 12th, 2009. Published under Analysis & Commentary: Studies, Research, White Pap, Business Applications, Due Diligence and Risk Assessments, Fiduciary Responsibility. No Comments.
Michael D. Moberly June 12, 2009
The business transaction landscape is no longer shaped solely by the flow of physical-tangible goods and services rather by the flow of information and intangible assets! Corporate and institutional value has literally shifted away from collections of physical (tangible) assets to collections of information and know how-based intangible assets, e.g., intellectual capital which, in itself, has become quantifiably valuable and a stand alone commodity for which sustaining control, use, ownership, and consistently monitoring value are paramount and integral to business’ near-long term success, profitability, and sustainability.
The rules of engagement have changed! The predatorial elements (impact, consequences, losses) attributed to the globally persistent business intelligence and data mining industry’s are unfortunately routinely omitted from most business information asset protection and management equations. Initiatives (programs) to effectively safeguard and manage business information (intangible) assets must include practices to mitigate these technologically sophisticated, predatorial, and global phenomena.
Think differently about past practices and conventions! The laws associated with intellectual property enforcements are largely reactive, not proactive, and typically apply after, and if, an information loss has occured and acknowledged by its’ rightful owner (holder). IP holders are almost solely dependant on their respective levels’ of awareness and alertness to the assets’ vulnerability, probability, and criticality to loss and/or compromise and their willingness and resources to aggressively pursue suspected wrong doers. Business information asset protection and management therefore, must be much more proactive in order to reflect and accommodate the nanosecond nature of information flows and transactions, i.e., practices, procedures, and policies must be in place, on the front end, to sustain control, use, ownership, and monitor value.
June 11th, 2009. Published under Analysis & Commentary: Studies, Research, White Pap, Business Applications, Fiduciary Responsibility, Intangible Asset Value. 1 Comment.
Michael D. Moberly June 11, 2009
Why is it important to ensure a company’s intangible assets are aligned with its core business, and why would such an exercise be a worthy use of a management teams’ time? There are five good reasons!
1. 65+% of most companies’ value, sources of revenue, sustainability, and future wealth creation, irrespective of (company) size or industry sector, lie in – are directly linked to intangible assets…
2. unlike the issuance of a patent or trademark by the government, there are no other confirmations made that say ‘additional company value lies in other intangible assets’ which management teams have the sole responsibility to identify, unravel, assess, position, leverage, maximize, and extract value…
3. company’s that do not recognize how integral intangible assets are to sustaining core business will leave competitive advantages, revenue, and value on the negotiation – business transaction table…
4. left unrecognized and un-utilized, a company’s intangible assets will become readily available (vulnerable) for competitors and adversaries to acquire and exploit and, once gone, intangibles become largely irreplaceable, irretrievable, and extraordinarily costly and time consuming to re-build…
5. when thoughtfully and effectively executed, the act of aligning intangible assets with core business will produce processes, practices, and a culture that is able to identify, assess, position, and ultimately execute opportunities to maximize and/or extract value from intangibles at earlier stages of their respective value and functional life cycles.
Good, first steps to aligning a company’s intangible assets with its core business is to bring clarity, relevance, and context to intangibles, i.e., they are…
- embedded in a company’s distinctive processes, procedures, and practices and its overall culture in ways that set it apart from its competitors by creating efficiencies, enhancing internal-external relationships, and providing special competitive advantages in the market place. (Michael Moberly)
- unique knowledge a company and its employees possess and the special value that comes with the understanding and ability how to use it best. (McKinsey)
Management teams can kick start the process of aligning their intangible assets with their core business by considering this guidance, (a.) determine who, how, and where intangibles are being produced and/or exist internally, and (b.) identify relationships, connections, and/or contributions (value) those assets produce (internally, externally) relative to benefitting a company’s core business, i.e., its products, services, brand, goodwill, image, reputation, and revenue etc.
Five broad examples of positive, company-wide outcomes resulting from aligning a company’s intangibles with its core business are:
1. mining and applying employee expertise, technical know how, and institutional memory for inter-business unit applications to address/solve current problems, challenges and/or contribute to new/existing products and services vs. hiring outside consultants…
2. extrapolating (proprietary) employee training materials to marketing, sales, and customer service units to elevate familiarity and/or understanding of certain products, services, or even conducting ’trouble shooting’ to elevate goodwill, reputation, image, sales, and/or introduce new – prospective customers to those products and services…
3. making company websites especially ‘user relevant’ to (a.) build and enhance loyalty, (b.) explain new services and products, and (c.) facilitate the introduction and marketing of other relevant opportunities of interest to website users…
4. critically examining the findings (insights, perspectives) from competitor-market research and focus groups for relevance beyond traditional (exclusive) application to marketing, sales, or new product development units…
5. reviewing and extrapolating insights gleaned from all business units about ’what works and what doesn’t work’ to become more efficient, competitive, and less likely to pursue paths of ’reinventing the wheel’…
Aligning a company’s intangible assets with its core business and strategy means recognizing that most all decisions related to the utilization of intangible assets, i.e., IP, know how, and competitive advantages, etc., are business decisions, not solely legal processes! Therefore, management teams are obliged (as fiduciary responsibilities) to exercise more management, oversight, and stewardship of those assets and the internal and external network of connections and relationships those assets produce.