Archive for 'Intangible asset teaching and training.'

Intangible Asset Strategist, Risk Specialist, and Trainer!

June 23rd, 2017. Published under Intangible asset strategy, Intangible asset teaching and training., Intangible asset training for management teams.. No Comments.

Michael D. Moberly June 23, 2017 m.moberly@kpstrat.com ‘A business intangible asset blog where attention span really matters’.

I am an intangible asset strategist, risk specialist, and trainer.  Much of my work commences with the premise that business leadership and management teams have fiduciary responsibilities to routinely and objectively ask and ultimately ensure…

is this company effectively positioned, insofar as possessing the
necessary expertise and skill sets, at the ready, to identify, unravel, develop, exploit, and extract as much value, revenue, and competitive
advantage as possible from its intangible assets, while simultaneously monitoring – mitigating risks and safe-guarding each assets’ value, sustainability, and materiality…?

Should the question not be asked or the actions not occur, or fail, little else may matter, because IA (intangible asset) value, competitive advantages, and sources of revenue, etc., will inevitably be vulnerable to rapid erosion, being undermined, and go to zero!

As such, an intangible asset strategist, risk specialist, and trainer can deliver lucrative and sustainable benefits to a company by…

1. Providing guidance when – where necessary for utilizing IA’s, i.e., extracting value, delivering competitive advantages, strategic planning, and measuring asset performance.

2. Adding predictability to business transaction outcomes, projected returns, and exit strategies whenever-however-wherever IA’s are in play by…
a. assessing IA stability, defensibility, value, and sustainability contexts.
b. conducting pre – post transaction due diligence to ensure competitive advantages, synergies, efficiencies, and value of the IA’s remain stable.
c. reducing the probability that project-transaction momentum can be stifled by mitigating circumstances that can…
i. ensnare and/or entangle the assets in costly and time consuming legal challenges.
ii. undermine/erode asset value and performance.
iii. adversely affect asset reputation ‘risk points’.

5. Integrating IA valuation, reporting, and accounting in company governance.

6. Organizing IA intelligent ‘company culture’ that aligns – converges with company’s mission, business objectives, and strategic planning.

7. Implementing organizational resilience (continuity, contingency) planning that encompasses mission essential IA’s to provide quicker recovery following a significant business disruption or reputation risk.

8. Bringing clarity to specific IA factors, i.e., recognition, valuation, separability, transferability, life-value-functionality cycles, risk, and value chain monitoring.

Intangible Asset Explanation!

June 22nd, 2017. Published under Intangible asset teaching and training., Intangible asset training for management teams., Intangible assets contributory value.. No Comments.

Michael D. Moberly June 22, 2017 m.moberly@kpstrat.com ‘A business intangible asset blog where attention span really matters’.

There are certain objectives intangible assets (IA) strategists, trainers, and risk specialists have when engaging clients, two key one’s are…

• ensuring their rationales to business leadership and management teams
for achieving IA operational familiarity resonate, on their terms and
in their context, and

• explaining IA’s contributory role, value, and relevance to their
products, services in terms of competitiveness, revenue, value, and
sustainability.

To be sure, there are numerous business concepts and practices which are less challenging to explain than IA’s (intangible assets) especially to those who have no, or hold only an introductory familiarity with IA’s. Either usually translates to being unaccustomed to distinguishing and exploiting assets, intangible and otherwise, insofar as recognizing and assessing their contributory role and value to a specific project or company as a whole.

I have learned, at least some of the challenges eluded to above are variously related to the variously obscure, cryptic, and somewhat off-putting language used to describe (operationalize) intangibles in business operational contexts, e.g., they

• are non-physical ‘things’ with no set monetary value.
• lack conventional sense of physicality.
• assessing and monitoring and IA’s role, value, and performance within
a company, using conventional methodologies, often produce misleading
and inaccurate indicators.

Admittedly, in many sectors, IA practices are perceived and interpreted as being largely theoretical and absent practical relevance, best espoused in university lecture hall. Yes, IA’s do lack physicality and bear no ’brick and mortar’ (tangible) components, nor are they readily amenable to conventional methods of measurement, management, valuation, and accounting collectively making explanation and rationale murky and suspect.

I find some business leaders and management teams, even though they have invited me to lead conversation about their IA’s, find it personally-professionally challenging to step outside their ‘past practice’ comfort zones and their formative b-school curricula to actively engage IA’s. Finding motivation and rationale to consider contemporary alternatives being espoused easily gets translated as ‘why change what seems to work nicely, thank you’?

Business leadership are generally driven by a sense of pragmatism for meeting quarterly objectives and achieving returns-on-investment, and are also quick to exercise risk aversion when either appears in jeopardy. These operational characteristics-behaviors, while admirable and often rewarded accordingly, also contribute to skepticism about embracing practices which depart from the norm.

Still, the objectives are clear…articulate what intangible assets are, what they aren’t, the various forms they take, and depending on how and when they’re effectively applied and exploited, can lay valuable and strategic foundations to elevate a company’s value, sources of revenue, competitive advantage, market position, and sustainability.

IA strategists and risk specialists in-the-course of conducting seminars, training, and small group briefings are obliged to advise company-business leadership to acquire, develop, and have at the ready, a repertoire of expertise regarding intangible assets designed to proactively address issues and risks which can rapidly materialize particularly in business environments where IA intensity and dependency have indeed, become the norm.

After all, it is an irrefutable economic fact that 80+% of most company’s value, sources of revenue, competitiveness, growth potential, and sustainability lie in – emerge directly from IA’s.

Thanks for taking your time to read!

Leadership Attention Span, A Necessary Intangible Asset

June 19th, 2017. Published under Design thinking., Intangible asset teaching and training., Intangible asset training for management teams.. No Comments.

Michael D. Moberly June 20, 2017 m.moberly@kpstrat.com ‘A business blog where attention span really matters.’

Readers of this blog will notice the premium paid to ‘attention span’ which has become a moniker for much of my work. Advocating longer-focused attention span is not intended to convey arrogance or condescension to readers, instead, it is intended to underscore my belief that there are numerous worthy concepts, theories, models, and hypotheses, etc., that business leadership are variously obligated to acquire sufficient familiarity to make an informed judgment about it relevance to their company or business, its products and/or services, and the types of transactions it may engage. IA’s, for example, conceptually and practically, warrant levels of thought and reflection that extend beyond the brevity of talking points associated with the proverbial ‘power point’ slide deck. The rationale for doing so is embedded in the economic fact that 80+% of most company’s value, sources of revenue, competitiveness, and future wealth creation potential lie in – emerge directly from IA’s. Being inattentive or dismissive of this irrefutable economic fact is done so at a leader’s peril and that of her company.

As articulated in an April 2017 TED Talk by computational neuroscientist Mehdi Ordikhani-Seyedlar, ‘attention is not just about what we focus on, it’s also about what our brains filter out’. It sure would be useful to understand which-what information our respective brains ‘filter’, and why, and presumably absent a conscious effort.

Admittedly my interest in our brain’s ‘information filtering’ feature is somewhat self-serving. For example, I believe the subject matter (IA’s issues) I endeavor to communicate through my blog and books has merit and relevancy to business leadership, management teams, and companies irrespective of sector. I am hard pressed to understand the espousal of any rationale that seeks to explain away why each-and-every business (university) major and practitioner who aspires to be competitive and successful should not take a strong and personal interest.

Certainly, Google Analytics provides important analysis, particularly regarding the what, when, and for how long, i.e., ‘number of clicks and/or visitors’ to online publishing. These ‘analytics’ do not, however, shed light on or otherwise distinguish ‘the why’s’, which, for any author, holds special importance relative to how they frame and write about certain aspects of their on-going research interests.

Is there something I am missing? It is, after all, settled (irrefutable) economic fact that 80+% of most company’s value, sources of revenue, competitiveness, and sustainability today lie in – emerge directly from intangible assets. This economic fact should translate, in conjunction with attention span, as if-when IA’s are recognized, developed, utilized, and exploited effectively, most every company-business can be positioned to achieve projected outcomes and returns. To do so, requires an attention span with varying levels of thought, reflection, perhaps making some adjustments and re-positioning of IA’s. In other words, be routinely engaged in horizonal thinking and strategic planning = attention span!

The TEDTalk given by Dr. Mehdi Ordikhani-Seyedlar, whose expertise lies in investigating, tracking, and monitoring various patterns occurring – present in our brain. He aspires to apply his research to develop computer models which can be used to treat human functionality challenges such as ADHD and to those who have variously lost their ability to communicate.

As business leaders, we should be obliged to focus on a specific topic and/or subject beyond the vagaries of abbreviated attention spans. Unfortunately, human attention span has been minimized, often characterized as the preference to have important, far-reaching subject matter – concepts condensed and delivered with as much brevity as possible, i.e., the proverbial elevator pitch. Too, attention span is also conveyed through dramatized surges of simplified key words purposefully designed to seize-capture one’s fleeting – multi-tasking span of attention which many have come to assume is a perfectly acceptable business norm.

Of all the product-subject marketing practitioners I have come to be acquainted, I am hard pressed to identify (recall) any who does not hold-advocate this perspective in terms of branding and/or capturing the attention of an audience in seconds, not minutes. Often associated with such perspectives is the perceived requisite that targeted audience attention can only be accessed by incorporating – sewing fear, uncertainty, and/or doubt, i.e., FUD factors. Through my lens, however, the relevance and practicality of important (lucrative, competitive) concepts should not, and perhaps cannot, be fully appreciated, distinguished, or rationally-objectively assessed if-when it’s based largely on the brevity of a presentation, explanation, or by infusion of fear, uncertainty, or doubt.

To date, Dr. Ordikhani-Seyedlar’s research suggests that influencing humans to pay closer attention to something may not be all that simple. The reason he points out, lies variously in our attention being simultaneously pulled in many different directions. Rather amazingly he notes, it is actually-impressive if – when an adult can remain focused on a specific subject for an extended period-of-time. Presumably, the length of a person’s attention (span) correlates to one’s personal-professional interest in a particular, subject or topic. He also adds that one’s attention span is affected by what and which information our brains are trying to filter out, which I translate as important – relevant, but as-yet, unexplained element.

Dr. Ordikhani-Seyedlar says there are two general ways we direct our attention…
• First, there is overt attention, that is, people ‘move their eyes’
toward something in-order-to pay attention to it.
• Second, there is covert attention, which he describes as people
paying attention to something, without moving their eyes, presumably
our eyes are variously fixed in a particular-direction.

To explain this, Dr. Ordikhani-Seyedlar applies an analogy, which I have adapted somewhat, to people driving an automobile. He says, when driving, a driver’s overt attention, i.e., the direction of their eyes, are (generally) forward looking. That makes sense. A driver’s covert attention, on the other hand, is, or should be, scanning the periphery, presumably looking for and assessing potential risks, but not necessarily the specifics.

To be sure, there are numerous other inferences which can be drawn from Dr. Ordikhani-Seyedlar’s research. One which I have special interest is analogized from the 1960’s television show ‘Dragnet’ and the memorable and oft repeated statement uttered by Sgt. Joe Friday (principle actor) when questioning victims and/or witnesses to a crime, i.e., ‘just the facts mam’

In my judgment, ‘just the facts’, e.g., brief sound bites, visuals, or abbreviated key word synopsis, seldom translate to meaningful, effective, and comprehensive recognition or understanding and the all-important relevance to and influence on outcomes. So, Sgt. Friday’s ‘just the facts, mam’ is likely to overlook relevant – important underliers to motives and ultimately solving a crime, not unlike the long form blog posts published here which I believe serve readers.

Comments are most welcome at Michael D. Moberly m.moberly@kpstrat.com.

Marketing Intangible Assets To Skeptics

February 8th, 2016. Published under Intangible asset strategy, Intangible asset teaching and training., Intangible asset training for management teams.. No Comments.

Michael D. Moberly   February 8, 2016   ‘A business blog where attention span really matters’.

Respectfully, one would think at this point, with it being a globally universal economic fact that 80+% of most company’s – organization’s value, sources of revenue, and building blocks for growth, sustainability, and profitability today evolve directly from IA’s (intangible assets) any challenge related to bringing management teams and boards to the ‘intangible asset’ table would be minimal.  That message still demands clarity today, i.e., explanation, confirmation, and demonstration of IA’s contributory role and value to company’s – organization’s insofar as achieving financial and competitive advantage benefits.

For IA strategists like myself, that challenge often lies in getting management teams and boards to recognize (a.) the IA’s their company/organization actually produces and possesses and (b.) the contributory roles (to value, revenue, competitive advantage, etc.) and (c.) providing sufficient rationale and guidance for taking action.

For a percentage of still skeptical – unconvinced management teams and boards (about IA’s) the all but assured benefits and competitive advantages accruing from their effective use-application is misinterpreted as not occurring until some distant point in the company’s – organization’s future.  IA strategic planning practiced by this strategist is presented-executed with a near term emphasis that minimizes any rationale to delay engaging one’s IA’s financially – competitively or be dismissive about or otherwise trivialize the benefits.

There are techniques applied in seminars and/or training to influence greater – broader (management team, board) receptivity to effectively applying their IA’s.  Two important techniques are (a.) ensuring management teams and boards recognize what IA’s are, and (b.) achieving sufficient operational familiarity to identify, unravel, assess, position and otherwise consistently use-exploit IA’s profitably and competitively.

This entails, among other things, developing a (more) coalescing approach that encourages more company – organization management teams and boards to engaged and act on their IA’s.  In other words, positioning IA’s for becoming routine action items on c-suite discussions and strategic planning agendas.

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 Asset Conscious Business Community

August 17th, 2015. Published under Intangible asset teaching and training., Intangible asset training for management teams.. No Comments.

Michael D. Moberly    August 17, 2015    ‘A blog where attention span really matters’.

An important initial step to…achieving a more IA conscious business community, lies in bringing more operational clarity to what IA’s are, what they’re not, and how to consistently identify and how to assess and utilize them effectively. Unfortunately, there remain some challenges in the business community insofar as defining and explaining precisely what intangible assets are, how, by whom, and when they are produced, and perhaps most importantly how they contribute to an organization’s value, sources of revenue, competitiveness, and sustainability. After many years of work, research, and client engagements in the IA arena, even with more experienced, astute, and successful management teams, the words ‘intangible assets’ are seldom part of their routine discourse, integrated in their lexicon.  The reasons respectfully vary, along a continuum of…

  • not fully understanding or appreciating what intangible assets actually are.
  • being unaccustomed – uninitiated to identifying, assessing, or exploiting IA’s compared to tangible assets.
  • erroneously assuming IA’s are the (exclusive) domain of accountancy and/or intellectual property (legal) counsel.
  • wholly dismissing IA’s because they’re not sensed as constituting standalone assets or commodities because they are not routinely reported on company balance sheets or financial statements, unless ‘lumped together’ as goodwill.

Thus, recognizing the necessity to engage and exploit an organization’s IA’s or determine – measure their contributory value or performance which unfortunately, but frequently perceived as being neither necessary or justifiable, even though today 80+% of most organization’s value, sources of revenue and ‘building blocks’ for growth, sustainability, and profitability lie in –  evolve directly from IA’s. These are economic facts – business realities that absolutely should not be dismissed, overlooked, or disregarded as somehow being irrelevant to leaders – decision makers professionally or the organization they may own and/or oversee. As noted above, even the most astute and experienced organization leaders often mistakenly characterize IA’s as being…

  • more aligned with – the exclusive domains of accountancy or legal.
  • mere theories best espoused in university lecture halls than actionable agenda items in boardrooms, c-suites, and among strategists.

Another critical hurdle to explaining the relevance and importance of IA’s…to organization decision makers evolves from the reality that IA’s are just that, they’re intangible. But, intuitively their presence, absence, or changes can be sensed (measured) as declines in and/or erosion of an organization’s reputation, image, goodwill, intellectual – competitive capital, etc. So, regardless whether these assets are intangible or not, it often boils down to management teams’ inclination and curiosity to identify, unravel the origins, assess, manage, monitor, and measure these increasingly critical, valuable, and certainly strategic assets. Years of conversations with organization owners and management teams…I find all know their sector competitors, particularly those which have effectively and profitably exploited their IA’s compared to those who haven’t, can’t, or won’t. But, when expressing same, seldom will there be any reference to the term ‘intangible asset’. Instead, actual IA products, i.e., reputation, brand, and goodwill will be uttered, the reason, I suspect, is they are not aware the former are actually types/categories of IA’s. For these and other reasons, IA specialists-strategists like myself…who regularly conduct briefings, awareness training, seminars, and/or consult with organization leaders about their IA’s, should always be prepared to field an array of skeptical, even dismissive, but necessary questions, particularly regarding IA valuation, reporting, and (assets) contributory value. IA specialists-strategists must also assume responsibility…for bringing as much clarity as possible to IA’s, e.g., articulating and demonstrating smarter rationales and more effective techniques for organizations to engage their IA’s, i.e., capture, utilize, manage, monitor, and monetize, and/or commoditize their intangible assets. This includes, as noted previously, clearly distinguishing…

  • what intangible assets are and what they’re not.
  • the various forms – categories of IA’s.
  • how IA’s originate and develop, and equally important,
  • how and when IA’s can be effectively and profitably applied as ‘building blocks’ to enhance an organization’s value and create (new) sources of revenue and competitive advantages.

In today’s 24/7 globally predatorial and competitive business environment…it would be expressions of wisdom should organization management teams and their boards aggressively seek – be receptive to strategies – techniques to specifically engage and exploit IA’s to the fullest extent possible. One bottom line though is, some organizations find it challenging to step outside their conventional comfort zones to engage concepts and strategies which…

  • they have no formal or current awareness training.
  • depart rather significantly from past practice and conventional asset reporting and accounting practices, and
  • remain well under mba – business school radar.

Successful companies are typically operated by successful management teams, or so the adage goes. For the most part, successful management teams are realists and pragmatists, but still, forward looking-thinking risk takers. Understandably, their brethren, who may not be quite as successful and reluctant to knowingly engage risk, may be quite satisfied with past-current practice and therefore be skeptical and reluctant to ‘take their IA’s out for a ride’! When such skepticism translates into organizations and management teams becoming restrictively tied to practices and strategies of a tangible (physical) asset era versus the current, and for the foreseeable future, global business economy who’s future is solidly pegged to IA’s which are irreversibly embedded and climbing rapidly in all aspects of transactions, trade, and competitiveness. The former are just not likely to experience the growth, profitability, value, and revenues which most are still capable should they elect to shuffle away from practices thought to still be reliant – dependent on tangible (physical) assets.

Intangible Assets in B-School Curriculum

May 14th, 2015. Published under Intangible asset teaching and training., Intangible asset training for management teams.. No Comments.

Michael D. Moberly    May 14, 2015   ‘A blog where attention span really matters’!

The absence of intangible assets in B-school curriculum is tantamount to business education heresy. Some years ago, while preparing to teach a management course, I framed and sequenced course materials to reflect my determination and eagerness to introduce MBA students not merely to IA’s, but strategies related to managing them, mitigating risks, sustaining ownership, and understanding their competitive content and contributory value.

It’s essential IA’s be incorporated as teaching-learning elements to b-school’s undergrad and graduate programming, if, for no other reason than steadily rising percentages (i.e., 80+%) of most companies’ value, sources of revenue, and ‘building blocks’ for growth, profitability, and sustainability evolve directly from these non-physical asset class, particularly, intellectual, structural, and relationship capital, brand, reputation, goodwill, competitive advantages, and intellectual property, etc.

Upon commencing this MBA course, I quickly introduced students to intangible assets and affirmed they would be integral learning objectives to the course. Just as quickly, it became clear, with one exception, that, for even the most experienced and employed students, intangible assets were not part of their lexicon, repertoire of talent, or skill sets, save for one student who did acquire a limited, but far from operational familiarity for specific types-categories of intangible assets once they were pointed out. But that familiarity was generally limited to intellectual property (patents primarily), reputation, and brand.  Student generally characterized    intangibles in standalone – individualized contexts, not reliant on or connected to other company assets.

End of course teaching assessments coupled with student responses to essay questions related to intangible asset issues revealed challenges remained, particularly achieving a sufficient (operational) grasp of intangibles in several key areas, e.g., how…

  • IA’s could be subject to a collective framework of (asset) management, stewardship, and oversight.
  • to recognize and assess IA’s contributory value (to a company, a particular product, service, or other broader initiative.
  • to distinguish particular IA’s as contributing to – being drivers of specific  sources of revenue, and
  • the assets’ could be persistently vulnerable to various and asymmetric risks which, once materialized, would erode and/or undermine company value, the benefits of competitive advantages, (company, product) reputation, and new product launches, etc.

Respectfully, IA’s represent a variously challenging concept to grasp and apply in value-add, revenue generation, monetization, and exploitation contexts, to name just a few.  As for this course, I sensed then, and still do, that an important conceptual hurdle to understanding intangible assets along with achieving some level of operational familiarity, may reside in the word ‘intangible’.  That is, IA’s lack a conventional sense of physicality, unlike tangible (physical) assets which one can see, touch, and report on balance sheets and financial statements.

Again, respectfully, this was, for these MBA students, their initial introduction to IA’s. In part, their lack of familiarity is a reflection of shortcomings in the larger business community that still struggles with how to effectively and efficiently engage and utilize the intangible assets their company – organization produces or acquires.

As the nine week course progressed, a significant percentage of the students appeared to concede the role, function, and contributory value of intangible assets.  It’s worth noting, one student with an especially progressive career in financial services, clearly conveyed he was grasping IA’s, however, he consistently challenged, even resisted the positive spin I was endeavoring to espouse regarding the relevance and contributory value of intangible assets across all industry sectors.

This particular student articulated his reticence by describing numerous multi-million dollar loan and acquisition transactions which he personally oversaw, throughout which there was absolutely no mention, recognition, or accounting of intangible assets being in play, in either valuation, collateral (securitization) or due diligence contexts.

At the conclusion of the last class, this student said to me in a respectful, yet very definitive tone…”I understand what you’re saying Mr. Moberly about IA’s, but I just don’t see IA’s ever becoming an issue in my bank as you are suggesting they should and will, at least while the current (bank) officers remain in place. In my bank, it’s solely about identifying and assessing the value of physical assets as collateral”.

Of course, the point to all of this is, does the same attitude and perspective hold true for business management teams, c-suites, and boards, in general?  To be sure, attitudes toward and fundamental operational familiarity with IA’s is changing as the economic fact – business reality becomes clearer, i.e., 80+% of most company’s value and sources of revenue emanate from IA’s.

Introducing intelligent, seasoned, and already successful business decision-makers, boards, and management teams to intangible assets, and that the time they devote to learning about intangibles, their valuation, and strategies to effectively use and extract value from them, along with the necessity to safeguard and monitor the assets’ value, risk, and materiality are indeed worthy of their time. Unfortunately however, intangible assets remain somewhat of a hard sell!

 

 

 

 

Intangible Assets: Better Explanations – Definitions Will Make Them Part Of Business Management Lexicon!

December 6th, 2012. Published under Intangible asset teaching and training., Intangible asset training for management teams., Intangibles as strategic assets. No Comments.

Michael D. Moberly   December 6, 2012

Readers, let there be no question, I am a strong and unapologetic advocate of intangible assets!

One of the more frustrating aspects to my and numerous colleagues various work, research, and professional association initiatives intended to elevate awareness and use of intangibles’ throughout, and at various levels within the business – financial services community as a whole is what I contend is the sometimes rather obscure and/or esoteric language used to actually define (describe, distinguish) intangibles, e.g., they

  • are the non-physical ‘things’ of value that a company owns.
  • have no set monetary value and little or no objective (consistent) means of measurement.
  • lack conventional sense of physical presence, i.e., they’re not necessarily subject to being seen or touched.

I am not suggesting my particular frustrations can, or necessarily should be extrapolated across-the-board, or fit the increasing number of ‘knowledge-based, knowledge intensive’ firms regardless of the dual realities they (a.) lack that conventional sense of (asset) physicality, and (b.) their performance and value is challenging to objectively monitor and measure.

I, like many of my colleagues, have encountered countless circumstances in which uninitiated management teams, boards, investors, and employees alike, whom we’re approaching, struggle to make sense of intangibles, or what the British often describe as the invisibles.  Respectfully, the Brit’s characterization of intangibles is quite realistic and understandable because, among other things, seldom, if ever, are intangible assets singularly, per se, reported on company balance sheets or financial statements. That is, unless they’ve been acquired or ‘lumped together’ as goodwill.

Still, business decision makers, i.e., management teams, c-suites, boards, etc., should be hard pressed to deny the reality that steadily rising numbers of companies have fewer tangible (physical) assets in their inventory. Instead, their ‘inventory’ is being replaced with intangible assets!

Nonetheless, intangible asset strategists routinely say, and I might add, quite correctly, the development and effective use of intangible assets is absolutely essential to most companies’ near and long term success, i.e., viability, sustainability, and profitability and form – serve as ‘building blocks’ for growth.  To the uninitiated, or those unfamiliar with intangibles however, as well as those who are suspect and/or dismissive about intangible’s contributory role and value, poorly conceived or challenging definitions of intangibles’ contribute little to achieving the much needed ’ah ah’ moments or, ‘I get it’, which are so essential to this irreversible, growing, and no doubt permanent knowledge-based global economy which I believe we’re only in the initial stages.

A glaring, but often overlooked or misunderstood reality is that most every company, not just the new, knowledge intensive ones,, through their management teams, c-suites, and employees, create substantial intellectual, relationship, and structural capital for example, most, if not all of which constitute intangible assets!  Unfortunately, such creativity tends to be less apt to be recognized or acted upon in conventional ‘brick and mortar’ that may appear, at first blush, to remain dominated by or largely dependent on physical – tangible assets as their perceived key sources for building value and developing sources revenue.

In my view, and my colleagues agree, there are infinite types – categories of intangible assets, many of which are knowledge-based or, more specifically, the intellectual capital held between our ears, stored on our CD’s, issued to our company as intellectual property, i.e., patents primarily, or merely the accumulation of experience and specialized (operational) know how.  When these ‘assets’ (or, know how) are prudently and optimally linked to understanding how and when to effectively, efficiently, and profitably use/apply them, that’s likely to produce enviable competitive advantages and an otherwise strategic win-win circumstance.

Whether we’re operating a successful business or conducting a scientific project, we tend to seek a comfort zone comprised of facts, figures, formulas, and ratios, etc. In other words, qualitative and quantitative components that with more regularity, constitute the framework for business decisions and strategic planning. Under these circumstances, most business decision makers’ comfort zone is fairly easy to sustain because the measurement tools we are accustom to using and relying on for decision making, strategic planning, and/or formulating prognostications tend to possess tangible characteristics wherein a high number or percentage is interpreted one way and a low number or percentage is interpreted differently.

But sometimes, that comfort zone of ‘hard (physical) numbers’ may be more obscure or fuzzy than we are accustomed, in other words, intangible. In such instances, management teams, boards, and employees alike, are challenged to push their conventional understanding and decision making criteria beyond the tangible to the intangible relative to the relationship and contributory value the latter consistently delivers to companies and organizations globally.

So, welcome to the specialized, but ever expanding corner of the information age and its outgrowth, the knowledge-based economy, wherein intangible assets now routinely play key roles as contributors – facilitators to most company’s value, sources of revenue, competitive advantages, sustainability, and ‘building blocks’ for growth and future wealth creation.

But, despite the rising importance of intangible assets and the contributions they consistently deliver to companies in all (industry) sectors, they unfortunately remain, for some management teams and boards, challenging to define, recognize, distinguish, and measure.

(Adapted by Michael D. Moberly from the work of Thomas A Stewart, ‘Trying To Grasp The Intangible’.)

In my view, an important and initial step to achieving a more intangible asset conscious business community, we need to bring more operational clarity and benefits derived by identifying and utilizing intangible assets. Unfortunately, there remain some challenges throughout much of the business community insofar as defining and explaining precisely what intangible assets are, how and by whom are they’re produced, and how they contribute to a company’s value, etc.

I find even with more experienced, astute, and successful business management teams the words ‘intangible assets’ are seldom part of their routine discourse or integrated in their business lexicon and frankly, often prompt their eyes to glaze over rather quickly.  The reasons respectfully vary, along a continuum of…

  • not fully understanding or appreciating what intangible assets actually are
  • being unaccustomed to identifying, assessing, or exploiting intangible assets
  • erroneously assuming intangible assets are the (exclusive) domain of accountants and/or intellectual property (legal) counsel
  • dismissing intangible assets because they’re not characterized as standalone assets, reported on company balance sheets or financial statements, instead they’re often ‘lumped together’ as goodwill.

Thus, recognizing the necessity to engage and exploit their intangible assets or determine – measure their contributory value and performance is unfortunately and frequently perceived as being unnecessary and/or not justifiable even though today 65+% of most company’s value, sources of revenue and building blocks to achieve growth, sustainability, and profitability lie in –  evolve directly from intangible assets, economic facts that absolutely should not be dismissed, overlooked, or disregarded as somehow not being relevant to them or their company.

Too, intangible assets are often mistakenly characterized as being more aligned with business accounting practices best espoused as mere theories in university lecture halls rather than actionable agenda items in boardrooms, c-suites, or even the new version of the proverbial ‘shop floor’.

The challenges associated with really explaining the relevance and importance of intangible assets to business decision makers also evolves, in part, from the reality that intangible assets are just that, they’re intangible!  As stated previously, they lack a conventional sense of physicality.  But, even though management teams are unable to necessarily see or touch these assets, intuitively they ‘feel or visualize’ their presence, absence, and/or changes, in, for example, declines and/or erosion of a company’s reputation, image, goodwill, intellectual capital, value, market space, competitive advantages, etc.

So, regardless whether they’re called assets or not, it often boils down to management teams’ inclination and ability to identify, unravel the origins, assess, manage, monitor, and measure these increasingly important, valuable, and strategic assets.

Interestingly, conversations with countless business owners and management team members, I find they can readily identify a variety of companies, across industry sectors, that have effectively captured and exploited their intangible assets compared to those who haven’t can’t of don’t, even though they seldom, if ever, use the term ‘intangible asset’ in their critique.

Thus, for all of the above reasons, intangible asset specialists-strategists who conduct briefings, awareness training, and consult with companies about their intangible assets should always be prepared to field an array of skeptical, dismissive, and critical questions, particularly with respect to asset valuation and/or contributory value.

A responsibility intangible asset specialists-strategists must assume with respect to defining and explaining what intangible asset are is articulating and demonstrating smarter and more effective techniques and rationales for companies to capture, utilize, manage, monitor, and monetize/commercialize their intangible assets.

This again, includes clearly distinguishing…

  • what intangible assets are
  • what they’re not
  • the various forms they take
  • how they originate, and equally important
  • how and when intangibles can be effectively and profitably applied as ‘building blocks’ to enhance a company’s value and create sources of revenue and competitive advantage.

Ironically, at least in my view, in the midst of this extended economic downturn, conventional wisdom would suggest that company management teams and boards would be seeking and be receptive to alternative and proven strategies to engage and exploit their company’s intangible assets particularly as they endeavor to weather this lingering recession.

The bottom line though is, some management teams, c-suites, and boards find it challenging to step outside their conventional comfort zones to engage concepts and strategies which…

  • they have not personally tested
  • appear to depart from past practice, and
  • are well under conventional ‘mba – b-school radar’.

Successful companies are typically ran by successful management teams. For the most part, those management teams are realists and pragmatic risk takers. Therefore, quite understandably, they may express some well-intended skepticism about intangible assets for all the reasons cited above.

However, when such skepticism translates into companies being restrictively tied to practices and strategies of a tangible (physical) asset based economy versus a knowledge-intangible asset based global economy, they’re not likely to experience the growth which they are probably capable!

Comments regarding my blog posts are encouraged and respected. Should any reader elect to utilize all or a portion of this post, attribution is expected and always appreciated. While visiting my blog readers are encouraged to browse other topics (posts) which may be relevant to the circumstance. And, I always welcome your inquiry at 314-440-3593 or m.moberly@kpstrat.com

Please watch for Mike’s book ‘Intangible Assets: Security Managers Roadmap’ to be published soon!

Intangible Asset Curriculum Content: Integral to Business Management and Marketing

June 18th, 2012. Published under Intangible asset teaching and training., Intangible asset training for management teams.. No Comments.

Michael D. Moberly    June 18, 2012

Business management and marketing curriculum content in universities must address intangible asset identification, management, stewardship, oversight, and risks!  While preparing to teach a graduate (MBA) business management course for a mid-west university last year,  I purposefully framed and sequenced my teaching/course materials to reflect my determination and eagerness to introduce students to intangible assets and strategies related to their management, stewardship, oversight, and risk mitigation.

Being a long time proponent/advocate of intangible assets insofar as their contributory value to companies of all sizes and sectors, I believe intangibles must be an integral teaching-learning component in most every business management course taught today!  That’s  because steadily rising percentages (i.e., 65+%) of most companies’ value, sources of revenue, and ‘building blocks’ for growth and future wealth creation evolve directly from these non-physical assets, e.g., intellectual, structural, relationship capital, brand, reputation, goodwill, competitive advantages, and intellectual property, etc.  Not introducing students to the fundamentals of intangible asset identification, development, valuation, exploitation, management, and risk mitigation, especially in business management and marketing curricula, in my view, is tantamount to business school heresy.

Once my aforementioned class commenced and the subject of intangible assets was introduced as constituting an integral component of the course, it became apparent that, for even the most experienced and already employed (MBA) students, intangible assets were yet to be part of their lexicon and/or skill set repertoire other than in the context of individual and generally unrelated assets.  That is, a percentage of students possessed a fundamental, but sometimes limited familiarity for specific intangible assets, once they were identified, particularly intellectual property (patents), reputation, and brand.  Students generally portrayed intangibles in standalone (individual) contexts, not reliant on or connected to other company assets.

Teaching assessments coupled with student responses to essay questions related to intangible asset issues revealed remaining challenges relative to achieving a sufficient (operational) grasp of intangibles in several key areas, among them being how…

  • intangibles’ could be subject to a collective framework of management, stewardship, and oversight.
  • to recognize and assess intangibles’ contributory value (to a company, a particular product, service, or launch).
  • to related and distinguish particular intangibles’ as contributing to – driving specific  sources of revenue, and
  • the assets’ could be subject – vulnerable to persistent, various, and asymmetric risks that if materialized, could erode and/or undermine company value, the value of competitive advantages and (company, product) reputation, and new product launches, etc.

Respectfully intangible assets (and their management) admittedly represent a variously challenging concept to grasp and apply in quantifiable (value-add, revenue generation, and exploitation) contexts.  I sensed then, and still do, that an important initial (intellectual, conceptual) hurdle with respect to the understanding intangible assets lies largely in the word ‘intangible’.  That is, intangible assets are just that, they’re intangible, they lack a conventional sense of physicality, unlike tangible (physical) assets which one can see, touch, and report on balance sheets and financial statement such a property, inventory, vehicles, buildings, machinery, etc.

Again, respectfully, this was, for most, if not all, of these high achieving MBA students, quite literally their initial (in-depth) introduction to intangible assets.  I sense their reactions and ability to grasp the management, stewardship, and oversight was not reflective of this university’s graduate programming or curriculum as it was, and remains, in my view, a reflection of the larger business community and its management teams, who themselves respectfully struggle with how to effectively and efficiently engage and utilize the intangible assets their company’s produces, acquires, and possesses.

As the nine week class progressed a significant percentage of the students appeared to concede the role, function, and contributory value of intangible assets.  However, it’s worth noting, one student with a solid career in financial services, consistently challenged and resisted the positive view I was espousing regarding the relevance and contributory value of intangible assets across sectors.

This particular student articulated his (resistive) position well by (privately) describing numerous multi-million dollar loan and acquisition deals which he personally oversaw, in which, as he stated, there was absolutely no mention, recognition, or accounting of intangible assets in either valuation, collateral (securitization) or due diligence contexts.

At the conclusion of the last class, this student said to me in a respectful, yet defiant tone, ‘I understand what you’re saying Mr. Moberly about intangible assets, but I just don’t see intangible assets ever becoming an issue in my bank as you are suggesting they should and will, at least while the current (bank) officers remain in place. In my bank, its solely about identifying and assessing the value of physical assets as collateral.

Of course, the point to all of this is, does the same attitude and perspective hold true for business management teams, c-suites, and boards, in general?  The answer, in my view, is yes, with of course, some very positive and very dynamic exceptions. But again, it is indeed an economic fact and a business reality that a steadily increasing majority of companies’ value, sources of revenue, and ‘building blocks’ for growth and future wealth creation do, in fact, evolve directly from or are generated by intangible (non-physical) assets, not tangible (physical) assets!

Introducing intelligent, seasoned, and already successful business decision-makers to intangible assets, and that the time they devote to learning about intangibles, their valuation, and strategies to effectively use and extract value from those assets, along with the necessity to protect, preserve, and monitor the assets’ value, are indeed worthy teaching – learning objectives, whether one is a promising MBA student or an already astute,  experienced, and successful business decision maker.  Unfortunately however, intangible assets remain somewhat of a hard sell!

While visiting  my blog, you are respectfully encouraged to browse other topics/subjects (left column, below photograph) .  Should you find particular topics of interest or relevant to your circumstance,  I would welcome your inquiry or comment at  314-440-3593 or m.moberly@kpstrat.com

 

Company Management Teams…Why Aren’t They Paying More Attention To Intangible Assets?

May 31st, 2008. Published under Intangible asset teaching and training., Intangible asset training for management teams.. No Comments.

Michael D. Moberly      May 31, 2008   ‘A blog where attention span really matters’!

In the Fall of 2006, as I was making preparations to teach a graduate business management course for a mid-west university, I was determined to persuasively integrate, throughout the semester long course, the global economic fact – business reality that 80+% of most companies’ value, sources of revenue, and ‘building blocks’ for growth, profitability, and sustainability evolve from – directly lie in intangible assets.

More specifically, as an intangible asset strategist and risk specialist, I believed that ‘managing and management’, conceptually and practically should now include components for recognizing, distinguishing, assessing, and managing intangible assets to maximize their contributory value.

During the introductory phase of the course, I quickly learned that for even the more seasoned, (employed) graduate students, intangible assets was a new and challenging concept to fully grasp even when applied specifically to their current position..

I sensed then, and still do, that an initial hurdle with respect to the speed and level of understanding one acquires for intangible assets likely lies in the word ‘intangible’, i.e., intangible assets lack physicality compared to the more conventional tangible or physical assets. In other words and for most intangible assets our five senses, i.e., touch, smell, hear, see, and taste  are not applicable, whereas each obviously is for tangible – physical assets.

Too, for most, if not all, of these graduate students, this served as their initial introduction to intangible assets which, in my view, is not so much as adverse reflection on this university’s graduate students, rather, the global business community as a whole.

Eventually, a significant percentage of the graduate students seemed to relent to the role, function, and contribution of intangible assets as a result of being regularly peppered with remarks about and current – relevant applications of intangibles to the art and science of managing and management!.

Admittedly, one graduate student with a strong and upward career trajectory in a regional financial services firm, challenged some of my views regarding the relevance and contributory role and value intangible assets play in today’s to business operation performance and output.

Quite interestingly this student defended his position in large part by describing numerous multi-million dollar loan and acquisition deals he had lead in which there was absolutely no mention – recognition of intangible assets by any of the parties in either value, collateral (securitization) or due diligence contexts.

Immediately following the last class, this student said to me in somewhat of a defiant tone, “I understand what you’re saying Mr. Moberly, but I just don’t see it happening in my bank, at least while the current (lending, banks) officers remain in place’! In other words, advocates of asset-backed lending would not find this particular institution receptive.

Of course, the point to all of this is, does the same hold true for today’s business leaders and decision-makers?   Again, there is absolutely no question; it is a global economic fact and business reality that for growing percentages of companies’ globally, their value, sources of revenue, and ‘building blocks’ for growth, profitability, and sustainability are no longer being generated from tangible or physical assets!

Introducing intelligent, seasoned, and already successful business decision-makers to intangible assets and that the time devoted to learning about their intangibles and ways to exploit – extract (protect, preserve, and monitor) value are indeed worthy strategic objectives, however, it remains, unfortunately, no easy sell!

Of course reader comments are welcome and respected!