Archive for 'Fiduciary Responsibility'

Intangible Asset Expertise

July 19th, 2017. Published under Design thinking., Fiduciary Responsibility, Intangible asset training for management teams.. No Comments.

Michael D. Moberly July 19, 2017 m.moberly@kpstrat.com A business intangible asset blog where attention span really matters.

Intangible asset expertise allows professional service firms to legitimately guide business leadership to overcome their reluctance to engage their intangible assets.

Reluctance and/or hesitancy to engage a company’s IA’s…is attributed in large part, at least in the U.S, to limited opportunities for business leadership and management teams to acquire operational familiarity (with intangible assets) at strategic-decision making levels. This includes university coursework in which intangible assets, for various reasons, still largely elude many MBA, business, and law school curricula.

Having made numerous presentations to business and law school students and faculty…in various contexts and venues about IA matters, their questions and comments suggests the preparatory familiarity and research regarding intangible assets is often rooted in context related to conventional accounting practices. Treating IA’s solely through the highly structured and rules oriented lens of conventional accounting and valuation, leaves little receptivity or incentive to examine IA’s in practical and contributory role and value contexts, i.e., impetus-momentum necessary to create competitive advantages, new sources of revenue, value, and efficiencies, etc.

It is little wonder then, current generations of entrepreneurs…business strategists and decision makers devote more time, attention, and resources the pursuing IP (intellectual property) side, i.e., patents, trademarks, copyrights, assuming they are the dominant, if not, only strategy for innovation conversion, revenue production, creating leverage, competitive advantage, and business sustainability. Notably absent from this strategy is recognition that all paths leading to intellectual property are paved with contributory and inter-connected intangible assets, i.e., various forms of intellectual, relationship, and competitive capital.

When I conduct seminars-presentations…on the contributory role and value of IA’s, it’s rewarding to introduce practitioners, most of whom are already variously successful, to practical recognition-application side of IA’s, especially those which have been produced by and embedded in a company’s products and/or services, but still may be variously overlooked or familiarity falls short of the assets’ effective-profitable-sustainable exploitation. For these and multiple other reasons, this contributes to consistent interest in and high attendance for my seminars and presentations. Both are supported of course by broadening realization that intangible assets are essential to business competitive positioning, thus important to learn about.

It’s instructive to recognize also, how business leadership and management team reluctance to engage their intangible assets manifests – is conveyed, e.g.,
• skepticism about outcomes and/or returns.
• concern that doing so would be (too) disruptive to a company’s
operating culture and processes
• satisfaction with current (past) practice.

I am not inferring…companies-businesses will never become successful, profitable, or sustainable without first thoroughly and consistently engaging their intangible assets. Experiential observations do indicate however that in numerous instances, if-when a company achieves success financially, or otherwise, such success will likely occur at a slower pace and unnecessarily incur various starts, stops, re-starts, wrong turns, missteps, miscues, and missed opportunities. Some missteps can be clearly and legitimately attributed to…

• operational unfamiliarity how to exploit and safeguard their
intangible assets.
• holding conventional and misleading assumptions about when, where,
and how company value, revenue, and competitive advantage
originate.

To draw a finer point on this issue, my experiences as an intangible asset strategist indicate company leadership who exhibit indifference to their internally developed IA’s, become fertile ground for…

• reputation – brand risks to materialize, and
• employee disenchantment influenced by confusing, redundant, and/or
cross purposed use of intellectual, relationship, structural, and
creative capital, thereby contributing little, if any value, revenue,
competitive advantage, or sustainability to a company.

Intangible Asset Side of Business Habituation Can Be An Impediment

February 13th, 2017. Published under Fiduciary Responsibility, Intangible asset training for management teams., Managing intangible assets, Uncategorized. No Comments.

Michael D. Moberly February 13, 2017 A business blog about intangible assets where attention span really matters!

Business acumen acquired from – retained through personal experience permits most of us to ‘encode’ repetitive activities and processes (we engage in) as habits, which, in turn, allows us to free up ‘brain space’ to learn new things. This encoding process is referred to as habituation.

Habituation however, may not always translate – manifest as (business) improvements, new practices, or creating much needed efficiencies. Instead, in its extreme, ‘habituation’ that manifests as unquestioned adherence – attachment to perpetuating past practice and/or convention, without considering some may be variously obsolete, nearing irrelevance, or wholly uncompetitive, can, quite literally, push economic realities, ala IA’s, off ‘the proverbial table’ and strategic planning radar screens to be obstructions to business competitiveness, sustainability, and viable paths to creating value and (new, additional) sources of revenue.

When one recognizes how to differentiate habitual (sometimes trivial) details from those which are genuinely relevant, competitive, and value-revenue creating, ala IA-related, vs. merely continuing to approach-execute certain practices and/or processes because ‘we have always done it this way’ (with no intent-desire to change) is habituation, perhaps in its most extreme form.

There are many good and relevant reasons why we (our brains, personalities) are receptive to habituation. One is, if habituation were absent, proponents would argue we would likely be destined to consistently taking notice of and acting on relatively inconsequential minutia – details of work. Doing so would likely impede, if not limit our work effectiveness and efficiency. That’s because, presumably it would leave little time or inclination to notice or learn new things, i.e., change that could favorably affect the way we approach, engage, execute (our) work-job.

A relevant, all-be-it comedic example of this is (comedian) Jerry Seinfeld’s career which his followers recognize has largely been built on making light of the supercilious minutia of life behaviors and processes which most of us accept and comply with as mere unquestioned realities, i.e., this is the way someone decided it should be done, and it may never rise to a level that prompts us to question why!

Yes, it’s a generalization, but, many successful business persons, are often ‘wired’ to not just notice changes in habits, life expectations, and tolerance, and re-cast them in question contexts, i.e., ‘what could be’? For example, ask, what product-service could be developed, reconfigured, modified, etc., to ‘scratch an itch’ affecting significant and diverse percentages of populations, how much will it cost to produce and market, how quickly can it be brought to market, and what are the risks of doing so, and, if so, what, when, where, and how will they materialize?

These, so-called ‘wired’ individuals, often go multiple steps insofar as anticipating, seeking, embracing, and internalizing change, and how to translate same to develop, monetize, and commercialize discoveries, technologies, and products, embedded with IA’s, often, long before it materializes in a Jerry Seinfeld comedy sketch. Wired individuals are inclined to recognize-distinguish ‘benefits and beneficiaries’ in futuristic contexts vs. recognizing its existence and affects after the fact.

In one sense, this-is-why I frequently characterize my work, as strangely as this may appear to some, as consistently viewing business-company operability through an intangible asset lens. More specifically, during engagements, I respectfully examine actions and perspectives conveyed by business leadership and company management teams in the context of how, why, where, when, and circumstances in which (their) IA’s are used – leveraged (or, not) and how either impacts or contributes to a specific outcome favorably or unfavorably.

It’s not particularly challenging, I find, for business pundits to equate (critique) a company’s missteps or miscues subjectively as missed opportunities. On the other hand, it’s substantially more challenging to correctly define and collaboratively resolve challenges – risks related to business value, sources of revenue, competitive advantages, and reputation that originate – are embedded in non-physical (intangible) assets, which, irrespective of their contributory value, are seldom, if ever, mentioned.

So, when I am engaged with-by clients and companies about their IA’s, i.e., to facilitate-enable lucrative and competitive treatments-applications, I recognize, respectfully so, there have likely been multiple and various circumstances arise previously that singularly or collectively elevated awareness and importance of particular-IA’s. When this occurs, it allows those experiencing – achieving IA operational familiarity, substantially and operationally, better positioned to recognize-examine their IA circumstances to determine if such preludes were and remain present, i.e., determine-assess if, when, where, and how IA’s are being acknowledged and utilized effectively, lucratively, and competitively.

Why am I addressing this? It’s because forward looking-thinking business leaders and management teams are becoming more adept at recognizing – distinguishing processes, initiatives, risk, transactions, and challenges, etc., through IA lens, all-be-it often filtered through conventional sense of (tangible asset) physicality. In the pre-knowledge worker era, obviously previous-to recognizing IA’s contributory role and value to businesses and companies, it was largely assumed that innovation, transaction success, mitigating risks, and/or resolving challenges could be accomplished by simpler (physical) techniques, e.g., deciding which knobs needed adjusting, which screws needed tightening, or which moving parts needed lubrication, etc. In other words, physical methodologies were routinely attached to both the execution and resolution side.

Today, however, it’s a globally universal economic fact that 80+% of most company’s value (sources of revenue, competitive advantage, etc.) lie in – evolve directly from IA’s. A logical extension of this economic fact is that the value and/or pricing of a transaction is reflected in the IA’s in play. This has relevance on several levels, perhaps the most significant is the necessity for business leadership – management teams to recognize the intangible (invisible – non-physical) elements in value, competitiveness, and sustainability, etc., and address them accordingly. (The above was substantially modified by Michael D. Moberly from Tony Fadel’s, March 2015, TEDTalk titled ‘The first secret of design, is noticing’.)

Intangible Assets, What Companies, Management Teams Are Obliged To Know Now!

February 11th, 2017. Published under Board oversight, Business Transactions, Fiduciary Responsibility, Intangible asset strategy. No Comments.

Michael D. Moberly February 11, 2017 A business blog where attention span really matters!

Integral to business operability, and certainly as a prelude to undertaking – engaging in any new initiative or transaction wherein IA’s are ‘in play’, i.e., bought, sold, acquired, or traded, etc., leadership and management teams are obliged to know, with sufficient specificity, how to distinguish, measure, and monitor…
• what IA’s are, their rightful owner-originator, and which IA’s are in play.
• IA’s contributory role to value, revenue, competitive advantages, and asset commercialization opportunities.
• IA value and performance throughout their respective life, value, materiality, and functionality cycles.
• and, identify and mitigate IA risks in both pre, and post (transaction) contexts, particularly risks which, if materialized, would undermine – erode asset value, a project’s momentum, and most, if not all, competitive advantages.

Today, with ‘keystroke capability’, businesses can rapidly engage in global competition and enter new markets, each variously enabled by at will access to ‘always on’ worldwide (intermodal) supply and distribution channels ala air freight carriers, containerized ocean-rail shipping, and e-commerce.

These comparatively new, but, very integral enablers – components to global trade are consistently tweaking their ‘logistics’ through inputs of intellectual, relationship, and structural capital, ala IA’s, to create more efficiency, speed, capacity, and on-time delivery. Such capabilities permit mature, new, and emerging businesses alike, regardless of size, sector, location, product, or volume, to distribute their products and services whenever and wherever markets exist, or are emerging, and do so rapidly and absent the burdensome expense and time to independently configure conventional supply-distribution channels.

The at will availability-access to these now ‘infrastructured’ intermodal services represent factors that further influence business leadership to look – think more forwardly, e.g., consider where, when, how, and which type-category of IA (ala, collaborations of intellectual, structural, and relationship capital, etc.) should be introduced to produce the most effective, competitive, and profitable outcomes.

A parallel aspect to these ‘infrastructered’ intermodal assets, is recognizing the necessity to consistently invest in developing, acquiring, and integrating nuanced-specific IA’s to accommodate continuous improvement, create efficiencies, sustain-build competitive advantages, increase-stabilize company-IA value, and utilized-exploited to develop new-additional sources of revenue.

An especially important capability, of course, is being able to determine their (IA’s) impact on – relationship to company-shareholder value. This value, in my judgement, and that of others, should no longer be limited by either the content or how conventional balance sheets and financial statements are framed. Instead, company (business) value should convey whether-or-not, i.e., a measure of how well, a company develops, safeguards, uses, and exploits IA’s under its control, e.g., as coordinated spring boards, building blocks, and/or paths to elevating (asset) value, revenue, competitive advantages, and wealth creation potential.

It is indeed an understatement, to assume business operability today is enmeshed in anything less than a ‘sea change’ as its operational interface with IA’s rise routinely. The IA phenomenon is, what I refer to, euphemistically, as an ‘inevitable unknown’. By that, I mean, there were numerous indicators appearing within and throughout companies and businesses, often, in advance of the publication of respected studies which surfaced IA’s actual (contributory) role and value, had more attention been paid.

So, another upshot to this total economic shift to IA’s is business leadership directing – allocating proportionately fewer resources to company’s physical-tangible assets and more resources to IA’s in play, i.e., their development, monetization, and exploitation of (their) competitive-creative capital.

For all the forward-looking insights that surfaced through the Brookings Institution’s ‘Intangibles Project’ and complimentary research conducted in the EU, there is no indication these projects were undertaken solely or even primarily, to influence revisions to conventional (IA) reporting, accounting, taxing, or the standards, statues, and regulations the relevant professions are obliged to uphold. But, to be sure, notions to that affect have occurred.

Intangible Asset Global Shift

February 10th, 2017. Published under Fiduciary Responsibility, Intangible asset training for management teams., Intangibles as strategic assets. No Comments.

Michael D. Moberly February, 10, 2017 A business blog where attention span really matters!

Indeed, country economies have rapidly entered and connected to an era irreversibly intertwined, at all levels and functions, in which IA’s (intangible assets) are the overwhelmingly dominant ‘players and actors’ as sources of revenue, value, competitive advantage, and sustainability, all of which I believe, we are in the early stages.

This translates as most companies and businesses, irrespective of sector, are, whether recognized or not, have shifted economically away from reliance on – applications of tangible-physical assets to being irreversibly attached to – dominated by intangible – non-physical assets. In other words, the IA era which influenced growing percentages of business – company leadership and management teams to engage their IA’s (functionally, operationally, competitively, and monetarily), some for the first time, is now indeed, for many, a permanent component to c-suite agenda’s.

That is not to suggest dependence – reliance on (conventional) tangible – physical assets has been completely eliminated to the point of absence. Instead, it means business leadership are variously (fiduciarily) obliged to recognize that business competitiveness, value, and revenue generation, etc., require IA inputs to achieve desired outcomes.

Starting 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 (chapters) of a multi-year project undertaken by The Brookings Institution titled ‘Understanding Intangible Sources of Value’. The principle investigators-authors of the project, several of whom I engaged at the time in discussion for clarity and insight, were a strong troupe of forward looking-thinking professionals. Most, to my recollection, were not exclusively schooled in economics per se, but never-the-less, experienced and respected practitioners who clearly understood the impending prominence – dependence on IA’s. For me, that Brookings’ project remains a very insightful treatise, certainly equal to the fine work on IA’s developed-produced at prominent institutions in the UK and Sweden.

To be sure, IA’s, still prompts some debate in certain quarters, debate that is less about the existence and presence of IA’s, and their contributory role and value they consistently play in business operability, innovation, and transactions, etc., and more about how to report IA’s relative to convention and profession specific standards, practices, and statutes.

Arguably, the IA ‘sea change’ for business, grew out of various consternations that conventional financial statements and balance sheets largely dominated by ‘tangible assets’ and to the exclusion or, at the very least, minimization of IA’s. Among the key arguments of IA proponents, aspects of which remain today, is that continued adherence to conventional asset reporting and accounting, (that essentially excludes IA’s) is insufficient, insofar as painting a complete and accurate portrait of a company’s financial wealth, health, potential, and competitive standing. This argument is all-the-more-relevant now, given the economic fact that substantial percentages (80+%) of most company’s value, revenue, and competitive advantage derived directly from IA’s.

Companies and Management Teams Can Run, But They Can’t Hide From Intangible Assets!

January 2nd, 2017. Published under Fiduciary Responsibility, Intangible asset strategy, Intangible asset training for management teams.. No Comments.

Michael D. Moberly   January 2, 2017   ‘A business blog where attention span really matters’!

Let’s be clear, IA’s (intangible assets) are thoroughly and irreversibly embedded in business operability as enablers and sources of value, revenue, and competitive advantage which manifest as variations-collaborations of intellectual, relationship, and/or structural capital.

One perspective I hear voiced about IA’s with some frequency in routine encounters with company-business leadership and management teams is their over-dramatization of a perception that the introduction of IA’s to company operability requires substantial company-wide adjustments as preludes to execution.  Too, their perceptions are often conveyed with a sense of enormity, i.e., execution will entail significant outlays of time, resources, and managerial, operational, and even cultural change before returns may be realized.  Such perceptions, unfortunate as they are, will likely persist as long as business leadership and management teams approach ‘change’ to convention, past practice, or company culture, ala executing on their IA’s, through the traditional lens of (a.) how long will it take, (b.) how much will it cost, or worse, (c.) assuming their company neither produces nor possesses any IA’s that produce value, enable new sources of revenue or competitive advantage.

Aside from fiduciary responsibilities conveyed in Stone v. Ritter, which directed attention to the stewardship, oversight, and management of company’s IA’s, business leaders and management teams may act as dismissively as they wish with respect to whether they engage their IA’s or not!

My experiences suggest that when company leadership exhibits hesitancy and/or reluctance to engage their IA’s, outcomes can vary.  Yes, one is, their company may eventually ‘muddle through’.  But, when they are inevitably influenced-prompted by logic and competitiveness to engage their IA’s, such actions often manifest in crisis and/or urgency contexts.

Proceeding with IA execution, absent sufficient operational familiarity with IA’s will likely surface numerous disenchanting missteps, miscues, frustration, and minimal patience which influences an initial focus on near-term outcomes.  Such circumstances, in turn, minimize confidence in going forward, i.e., IA conversion to sources of revenue, value, and competitive advantage, in strategic contexts. Quality and thorough IA operational familiarity remains the most important step off point for execution.

It is true, some company leadership and management teams believe they can still run from their IA’s.  But, many more are finding it increasingly challenging to continue to hide from (ignore, dismiss) their IA’s!  After all, it is a globally universal economic fact that 80+% of most companies value, sources of revenue, and ‘building blocks’ for future wealth creation, competitiveness, sustainability, and profitability today, lie in – derive directly from IA’s.  No hiding or running from this, unless, that is, failure is an option!

Growing numbers of us are employed in sector-specific organizations in which growing percentages of company’s which are IA intensive and dependent.  More specifically, the contributory value many of us make to our  employer – company (as employees, individuals, professionals) manifest as forms-variants of intellectual, relationship, competitive, collaborative, creative, and/or structural capital, ala IA’s.  Of course, I am not suggesting people-employees are mere collections of exploitable IA’s, indeed, we are much more than that.  In comparison, it is reasonable to consider that many of the (personal, professional) returns one receives from their education, employment, skill sets, family, leisure, etc., are genuinely intangible.  Individually – collectively each serve as potential pathways to (personal) satisfaction, fulfillment, sense of dignity, and self-worth, etc., not terribly unlike a businesses very valuable reputation, brand, image, and goodwill, etc.

In business management and organizational behavior contexts, acquiring-possessing attributes such as these and having them manifest through work (product) should come as no surprise!  Shouldn’t the same be applied to company-business operation?

Through my lens as an IA strategist, risk specialist, and trainer, for every transaction, operation, or initiative a business or company undertakes and/or engages, there are (fiduciary) responsibilities to maximize, extract, and safeguard as much value and competitive advantage as possible from the IA’s in play!  This is important because it is an undisputed, irreversible, and globally universal economic fact that, for an overwhelming percentage of companies today, 80+% of their value, sources of revenue, and pathways for sustainable growth, wealth creation, competitiveness, and reputation, lie in – draw directly from collaborations of, usually existing-internal IA’s.

In other words, growing percentages of businesses-companies, irrespective of sector, size, revenue, or maturation, are now IA intensive and dependent. This means IA’s are integral to company operability and sustainability. For example, intellectual, structural, and relationship capital as types-categories of IA’s, can manifest as operation and/or transaction specific knowhow and efficiencies, which should generally be considered proprietary. As such, IA’s are now far more than mere tools to manage other (usually tangible-physical) assets.  Instead, IA’s can be standalone or collaborative commodities with varying cycles of contributory value, functionality, materiality, and risk attached.  (Adapted by Michael D. Moberly from the work by Anne Wells Branscomb.)

Intangible Asset Training Delivers Multipliers To Companies and Management Teams

November 12th, 2016. Published under Fiduciary Responsibility, Intangible asset training for management teams., Managing intangible assets. No Comments.

Michael D. Moberly November 12, 2016 ‘A blog where intangible assets meet business’!

1. Align IA development and use with a company’s strategic planning and core (business) mission and product/service lines.

2. Foster a company-wide IA culture that facilitates asset monitoring and more timely awareness of misappropriation, competitive advantage undermining, and asset value dilution.

3. Forge stronger relationships with legal counsel, auditors, and accountants on all matters related to intangibles and non-financials.

4. Strengthen convergence with knowledge management programs and balanced scorecard initiatives

5. Kick start company-wide strategic planning to achieve fuller utilization, accounting, and value from IA’s.

6. More efficient and effective use of legal counsel and IT resources…

7. Facilitate alignment of financial – risk management planning with asset monitoring, safeguards, and monitoring core strategic objectives that contribute to assessing performance of IA’s.

8. Bring consistency to business accounting and auditing by describing IA’s in revenue conversion – competitive advantage contexts.

9. Provide foundation for developing business continuity and contingency (organizational resilience) planning specific to IA’s to achieve quicker and more complete economic recovery following catastrophic events.

10. Elevate company’s stature and goodwill (reputation) among its customers, suppliers, and investors and gain attention of audiences well beyond a company’s traditional market space.

11. Identify ‘leverage points’ in negotiating IA insurance coverage and premiums…

Intangible Asset Impact Analysis

July 29th, 2016. Published under 'Safeguarding Intangible Assets', Fiduciary Responsibility, Intangible Asset Value, Managing intangible assets. No Comments.

Michael D. Moberly July 28, 2016 ‘A blog that intersects intangible assets with business’!

As I have endeavored to convey since my initial post to this blog in mid-2006; the importance for business decision makers to recognize that, in each transaction they engage, correctly identifying, assessing, and mitigating risk to the IA’s (intangible assets) which play increasingly significant roles insofar as being consistently positioned to achieve the projected and sustainable outcomes!

The reason, steadily rising percentages (80+%) of most transactions’ value, projected sources of revenue, future wealth creation and competitiveness reside in – evolve from IA’s. That’s an objective and replicated economic fact, not business cliché or hyperbole. So, when business transaction management (M&A, due diligence) teams, etc., overlook, or elect to dismiss and relegate relevant IA’s, for whatever reason, i.e., IA’s not routinely reported – integrated in balance sheets or financial statement, it’s tantamount, in my judgment, to ignoring how/where value is created, revenue is generated, and sound strategic planning should originate.

In growing numbers of instances, engaging, identifying, assessing, valuing, and mitigating risks to IA’s most relevant to a transactions’ and/or operations’ projected and presumably lucrative outcome rises to a fiduciary responsibility ala Stone v. Ritter.

For decision makers, the implications are clear; an immediate charge to themselves and their transaction management team is to determine if IA’s are being correctly incorporated – addressed in the various tasks, i.e., due diligence, asset inventory, audit, and valuation, etc. Should decision makers find their transaction teams are doing neither, it’s fair to suggest achieving operational familiarity with business’s IA’s by sector and type of (reason for initiating a) transaction, would be a prudent undertaking and would produce revelatory insights that can be immediately applied to further transaction negotiations, i.e., mitigating risks by ensuring ownership, control, use, and value – competitive advantages of the relevant IA’s will be sustained.

As regular readers of this blog know, there is an abundance of business economic research (NYU’s Stearns School of Business, The Brookings Institute, and key UK universities) that consistently paint convincing and objective portraits about the that if and/or when a merger, acquisition, or other type of transaction ‘goes south’, evidence of impending problems and challenges will surface quite early and will likely stem from one or more intangible assets.

Each parties’ transaction management-oversight team is variously obliged to work collaboratively to reveal, unravel, and assess contributory relevance and value of IA’s. The reason, IA’s routinely and variously embedded and interact on multiple levels within an enterprise. In other words, IA’s (particularly intellectual, relationship, structural, and competitive capital) will very likely apply to multiple business – operational activities, initiatives, and projects. However, IA’s contributory role and value to routine business operations and/or a specific transaction can – will – may fluctuate, sometimes quite rapidly and not always for the better.

A technique I developed to determine and potentially remediate adverse (IA) fluctuations in a timely manner, relative to their dominant contributory role and value in transactions in a timely manner is to ensure an ‘IA transaction impact analysis’ is fully integrated into the (transaction) due diligence process in both pre and post contexts. As information derived from the (transaction impact) analysis is communicated to decision makers, a more definitive portrait of projected outcomes will arise, particularly materialization of risks which can adversely affect one or more of the IA’s in play.

The rationale for incorporating an IA transaction impact analysis for M&A’s and other types of business transactions is to better position decision makers to identify – become aware of risk circumstances – scenarios which, if they materialize, may impair or otherwise adversely affect the transaction via the IA’s in play.

I advocate IA ‘transaction impact analysis’ to focus primarily on what I find to be the three challenging IA’s to sustain – preserve their (projected, assessed) contributory role and value, particularly post-transaction, i.e., intellectual, relationship, and structural capital.

Transaction management team members undertaking – engaging in the ‘impact analysis’ are obliged to possess strong operational familiarity with (IA) risk mitigation and containment, i.e.,
• to recognize the inter-relatedness of IA’s insofar as their contributory role, value, and associated risks.
• how IA’s can become impaired, misappropriated, infringed and vulnerable to risk.
• to assess the probability that particular risks can-will materialize.
• how specific risks can adversely affect projected economics, competitive advantages, and/or synergies of a
transaction.
• to assess the resiliency and sustainability of key IA’s.

Equally important, this ‘transaction impact analysis’ can reveal a range of risk circumstances/scenarios for decision maker consideration while retaining options to proceed with…
• viable plans for risk mitigation, as well as,
• aspects which re-negotiation may be warranted in light of the now known risk(s) and/or asset impairment(s).

The objective remains the same…to facilitate more secure, profitable, and sustainable transactions going forward, not impede them.

Assessing Intangible Assets

May 26th, 2016. Published under Due Diligence and Risk Assessments, Fiduciary Responsibility, Intangible asset assessments/audits.. No Comments.

Michael D. Moberly May 26, 2016 ‘A blog where attention span really matters’!

What Are Intangible Assets…
Company and institutional value has shifted from collections of physical (tangible) assets to synergistic assemblages of non-physical IA’s (intangible assets) rooted in – evolving from intellectual, structural, relationship, and competitive/entrepreneurial capital.

However, unlike conventional IP (intellectual property), i.e., patents, trademarks and copyrights, there is no certificate issued by the government that says ‘these are your IA’s and competitive advantages’. Instead, the responsibility for identifying, assessing, safeguarding and otherwise preserving the value of those assets is a fiduciary responsibility for each company – organization and its management team.

Margaret Blair and Steven Wallman, previously associated with the Brookings Institution’s ‘intangibles project’, serving as that project’s principle investigators, along with Jonathan Low, describe IA’s as…“non-physical factors of production that contribute to or are used in producing goods or services, or as factors expected to generate future benefits for the individuals or firms controlling the assets”.

I see, with increasing consistency IA’s are the product of uncoordinated, unplanned, variously collaborative, and occasionally serendipitous actions of knowledge relevant individuals, and not necessarily the result of a decision arising from a dedicated capital allocation. Specific examples of IA’s are described with considerable specificity in numerous posts at my ‘Business IP and Intangible Asset Blog’ and distinguished in some 14+ categories.

The relevance of IA assessments…
An IA assessment is a methodical, insightful, and ultimately prescriptive tool for identifying, unraveling, and distinguishing the contributory – competitive value of key – strategic IA’s that underlie (serve as the foundation to) a company’s stability, profitability, and sustainability, and reputation.

To be sure, IA-specific assessments remain relatively new. They have largely born out of necessity, that is, the economic fact – global business reality that 80+% of most company’s value, sources of revenue, and sustainability lie in – evolve directly form IA’s, no longer tangible-physical assets. As such, a new, non-conventional approach (method, model) to identify and assess those assets was needed; distinguishable from conventional IP valuations and inventories. To accommodate IA’s, this approach must, of course, be sufficiently flexible to (reveal) identify IA’s in a variety of inter-linked and global circumstances and contexts in which they’re being used and the formats in which they exist.

Professional Service Firms and Intangible Assets

May 23rd, 2016. Published under 'Safeguarding Intangible Assets', Business Transactions, Fiduciary Responsibility, Professional service firms.. No Comments.

Michael D. Moberly May 23, 2016 ‘A blog where attention span really matters’!

The rationale underlying any business initiative – transaction should always be to maximize and ultimately extract as much value as possible from the assets in play because it’s an economic fact that…

…80+% of most organization value, sources of revenue, sustainability, competitiveness, and wealth/profit creation today lie in – directly evolve from IA’s (intangible assets).

It is then, an organization’s IA’s that will most always be in play because they are integral to both…
• transaction value, and
• near term outcomes.

This economic fact – business reality presents various fiduciary obligations to PSF’s and company decision makers irrespective of whether they are the originator, owner, buyer, or seller, etc.,

…to know, with the necessary specificity, what IA’s are and how to identify, unravel, and sustain their control, use, ownership and value throughout their respective economic, competitive, and/or functionality cycle and certainly a relevant pre-post (transaction) period of time.

Seldom can asset value maximization – extraction be fully achieved using conventional, generic precepts, checklists, or mere confirmatory reviews of registrations and filings. That’s because, the pillars of any organization’s IA’s are it’s…
• intellectual,
• structural,
• relationship, and
• competitive capital.

…which are routinely embedded in operations, processes, and/or functions that create efficiencies, competitiveness, brand, and value, etc., and generally lie under most conventional business radar.

So, when the motive – objective for parties is to initiate and/or be receptive to a transaction, there must be skill sets applied in advance to identify, unravel, preserve. maximize, and extract as much value as possible from the relevant assets in play, particularly, the IA’s. It’s prudent then for PSF’s (professional service firms) retained to support-oversee such transactions, regardless how small or periodic they may occur, possess current operational skill sets necessary to…

…strategize about ways to achieve sufficient operational familiarity with IA’s to respectfully engage business clients to recognize, assess, and distinguish their composition and contributory role and value in the global market space, particularly if/when the assets are effectively integrated, bundled, and safeguarded in both pre and post transaction contexts.

In far too many transactions, IA functionality – contributory value is overlooked, improperly assessed, misunderstood, or neglected insofar as the integral and contributory role they consistently play as sources of revenue, value, and competitive positioning.

The ‘Business IP and Intangible Asset Blog’ is designed to elevate awareness – bring operational familiarity to IA’s in the irreversible global business environment where 80+% of PSF’s business client’s value and sources of revenue actually lie.

To dismiss the importance for PSF’s to integrate this dimension into their practice area – service deliverables will, at minimum, manifest as adversely impacting firm’s billable revenues, competitive positioning, brand, and attractivity. On the other hand, offering IA services to existing and prospective clients is nearing a requisite for being consistently recognized as horizonal in the delivery of relevant and effective services to business clients in 2016, and for the foreseeable future.

The root of such services lie in preparing – positioning business clients to identify, preserve, safeguard, and extract value, efficiency, competitiveness, and sources of revenue from their IA’s. And, doing so, will most certainly, favorably affect their sustainability and outcomes to any transaction they wish to enter.

Reporting Intangible Assets

January 21st, 2016. Published under Board oversight, Communicating Risk, Fiduciary Responsibility. No Comments.

Michael D. Moberly   January 21, 2016 ‘A business blog where attention span really matters’!

When-where ever there is institutionalized indifference about the treatment of IA’s (intangible assets) at the hands of organization-company boards, management teams, legal, security, marketing, and accounting, etc., there will be a comparable stifling of curiosity for pursuing the actual contributory role and value of IA’s apart from the growing fiduciary responsibility to engage IA’s beyond the singular catchall of goodwill as described in Stone v. Ritter, 911 A.2d 362 (Del. Supr. 2006).

Yes, it remains quite true, IA’s are seldom, if ever, reported on company balance sheets or financial statements, a reality which I suspect will change in the not too distant future. In large part, the change away from (IA) indifference and dismissiveness to acknowledgment and engagement will be influenced (also) by necessity, e.g.,…

  • to provide more complete portraits of organization value, competitiveness, sustainability, and performance.
  • otherwise, organizations will be left unnecessarily holding far too many unknowns, uncertainties, and risks.

Not being trained in organizational psychology per se, it would be a reach to state with absolute certainty why, how, or the depth of (organization) ‘IA deniers’. As an intangible asset strategist and risk specialist, experience rather clearly suggests however, that the rigid inflexibility I encounter with ‘IA deniers’ will be challenged as IA intensive – dependent organizations become the norm, coupled with the managerial requisite for…

  • making consistently effective decisions whenever, wherever, and however IA’s are in play which compliments organizations interest in attracting go fast, go hard, go global management teams.

Mr. Moberly is an intangible asset strategist and risk specialist and author of ‘Safeguarding Intangible Assets’ published by Elsevier in 2014, m.moberly@kpstrat.com View Mr. Moberly’s videos on YouTube at ‘safeguarding intangible assets’ or his CNN and CNBC videos at his webpage http://kpstrat.com