Archive for December, 2009
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.
Michael D. Moberly December 7, 2009
Malcom Caldwell (author) describes three characteristics (principles) to his 2002 book, The Tipping Point which I believe is, in many ways, analogous to the current intangible asset phenomena. The Tipping Point, Caldwell says, is merely the ‘biography of an idea’ and the best way to understand the emergence of - transformation of an idea, in this case, the notion that intangible assets have universally and irreversibly replaced tangible (physical) assets as most company’s primary source of value, revenue, sustainability, and foundations for future wealth creation, is to think of that transformation as an epidemic. That is, ideas, products, and messages, Caldwell posits, spread in a manner comparable to a virus.
Caldwell describes the ’tipping point’ as the moment when a critical mass, a threshold, a boiling point has been reached. Of course, I’m referring to the point when management teams, D&O’s, and investors conclude (sense, observe) the ‘tipping point’ has been reached which prompts - influences them to act. With such consistenly incontravertable evidence and economic facts emerging from the global knowledge-based economies that 65+% of most company’s value, sources of revenue, sustainability, etc., lie in - are directly related to intangible assets and intellectual property (IP), why hasn’t this reality (the tipping point of recognizing intangible assets) become more fully embedded in – integral to management team, D&O, and investor (business) strategy? Don’t these realities and facts genuinely manifest themselves as clear and consistent signs that a critical mass, a threshold, a boiling point has not only been reached, but should be exploited?
Respectfully, intangible assets are not easy concepts to articulate or apply in business contexts, i.e., profits, revenue, value, etc. Those unfamiliar with their existance beyond the single application of ‘goodwill’, or unaccustomed to identifying them and/or measuring their performance-contribution to a company’s value, revenue, sustainability, or future wealth creation frequently misperceive-misinterpret them as merely representing esoteric or theoretical concepts best espoused in university lecture halls than in c-suites and boardrooms. After all, intangibles do lack a conventional sense of physicality and they totally lack any ‘brick and mortor’ context.
Management teams, boards, directors and officers, and investors; the ‘tipping point’ for utilizing and exploiting intangible assets has arrived! It’s contagious, its the reality that little causes can have a big effect in companies, and positive change can happen, perhaps not gradually, but at one dramatic moment!
Michael D. Moberly December 3, 2009
Respectfully, its evident that in a significant percentage of conversations I have with business decision makers and management teams about ‘intangible assets’ they are quick to express (perpetuate) the conventional (singular, largely accountancy) view that intangibles merely constitute – reflect a company’s ’goodwill’.
In the increasingly global ‘knowledge-based’ economies wherein its an economic fact that 65+% of most company’s value, sources of revenue, sustainability, competitive advantages, and foundations for future wealth creation lie in – are directly linked to intangible assets, perpetuating the notion that its all attributable to – comes under a single heading of ’goodwill’ no longer captures (reflects) the depth, breadth, and/or contributions of a company’s intangible assets. Unfortunately, for those company’s and management teams that cling to these conventional (narrow) views/perspectives about intangible assets, its unlikely they will be receptive to exploring the full range of intangible as noted below and their special relevance to their company.
Actually, Weston Anson (CONSOR) has organized intangible assets into recognizable categories, which I have taken the liberty of adapting and enumerating into fifteen primary categories, i.e., (1.) internally developed technologies, (2.) special advertising and marketing concepts, (3.) engineering designs and technical know how, (4.) proprietary issues related to customers and clients, (5.) competitor intelligence/research, (6.) real estate (certain property) rights, (7.) employee training, (8.) domain names, website design, etc., (9.) certain aspects of a company’s products and/or services, (10.) a company’s identity, reputation, image, (11.) special competitive aspects of contracts and agreements, (12.) intellectual property, (13.) R&D, (14.) particular competitive advantages within the HR arena, and (15.) the company’s collective intellectual capital. (Please note each category has numerous subsets and/or sub-categories.)
In today’s global business context, intangible assets:
1. are the economic benefits anchored in a company’s intellectual capital and the distinctive features, processes, procedures, and/or programs evolving from that intellectual capital.
2. is the understanding how to effectively apply that know how to deliver competitive advantages and create value for the company.
Few would argue, if/when a company’s intangibles are overlooked, dismissed, or neglected, it amounts to much more than merely missing a single opportunity!
Michael D. Moberly December 1, 2009
Lest we forget, its an economic fact – business reality that 65+% of most company’s value, sources of revenue, sustainability, and foundations for future wealth creation today lie in – are directly linked to intangible assets. With such significant value being embedded in a company’s intangible assets its imperative that management teams have, in place, effective strategies to (a.) consistently identify, utilize and enhance those assets, and (b.) safeguard those assets, i.e., sustain their control, use, ownership, and monitor their value and materiality.
Here are some key best practices that apply to every company, regardless of size, worth, or industry sector:
1. Bring personal, managerial, operational, and fiscal clarity to the term ’intangible assets’.
2. Identify (determine) the types and categories (range) of intangible asset that exist in your company, e.g., go to http://kpstrat.com and ‘click on’ brochure in menu and scroll to ‘Examples of Intangible Assets’.
3. Unravel the developmental origins of those intangibles and create a company specific ’tool’ to assess their status, i.e., their fragility, stability, durability, sustainability, contributory value, and ownership. It’s important to note that the development/production of intangibles is routinely tied to people (employees).
4. Determine how (or if) those assets are consistently being captured and utilized (or, under-utilized, not utilized) within the company, e.g., determine specifically how they contribute to – linked to enhancing particular operations, processes, an/or procedures by delivering efficiencies and/or competitive advantages, enhancing customer/client relations, influencing additional revenue sources, etc.
5. Determine how (if) the development and use of intangibles within your company are (effectively) aligned and integrated with the company’s core (strategic) mission.
6. Regularly communicate your company’s ‘intangible asset strategy’ to employees and institute mechanisms to ingratiate that strategy as a ‘company culture’.