Archive for 'Intangible Asset Value'
Michael D. Moberly December 31, 2016 ‘A business blog where attention span really matters’!
The methodology I developed to assess the contributory role and value of IA’s (intangible assets) is designed to influence – guide clients toward recognizing how-ways in which IA’s underwrite their company’s-businesses value, serve as starting points for generating revenue, competitiveness, and future wealth creation. This methodology commences by identifying-examining, among other things…
- centers or clusters of standalone, under-utilized, under-valued, or under-performing IA’s.
- how or whether key IA’s are (collaboratively) effectively interwoven to favorably influence a particular project, initiative, or transaction.
- how the IA’s collectively – collaboratively contribute to a company’s overall IA intensity and dependency.
- the compatibility of its IA’s with the company’s mission (statement), strategic planning, and its cultural – structural capital.
- the prevalence and speed which particular risks, threats, vulnerabilities, and liabilities manifest to adversely affect any-all IA’s in play.
- evidence of IA losses, compromises, materiality changes, and presence of current and/or horizontal risks.
- projected returns from its IA’s and contributions to the company’s competitive position within its market-sector.
- IA’s contributions to producing synergies, efficiencies for the company.
- how-ways which IA’s contribute to executing (new) market entry planning.
- evidence of IA’s contribution to enterprise wide (IA intelligent) company culture.
- how-ways which IA’s are incorporated into business continuity/contingency (organizational resilience) planning.
- life, value, functionality, and risk cycles of IA’s in play.
Regardless of the venue which clients-companies prefer for the delivery of IA advisory services, I consistently draw their attention to this ‘contributory value’ process. In large part, that’s because I believe this methodology reveals far more than conventional snap-shot-in-time portraits of IA assessment. IA’s contributory value is the asset’s assessed relationship, connection, collaboration with other IA’s within a company. After all, today, and for the foreseeable future, only 20+/-% of the stock price of S&P companies is explainable via conventional balance sheet – financial statement (book value).
The contributory value methodology framed above is executed with the view…
- that IA’s can exist as standalone or integrated clusters-bundles of intellectual, structural, relationship capital, and
- how those IA’s contribute to (current, future) projects, products, services, ventures, R&D, efficiencies, materiality, competitive advantages, and/or revenue streams, including foundations (or, building blocks) for company’s future wealth creation and sustainability.
The rationale for encouraging IA assessments – valuations be conducted using this ‘contributory value’ approach is to…
- provide business leadership with the frequently overlooked aspects about the integral role IA’s play in a company or transaction.
- develop descriptive paths (roadmaps) for company IA values, and materiality to be readily recognized, monitored, measured, safeguarded, and ultimately preserved, i.e., banked.
- provide business leadership with much needed and practical insight to optimize IA’s in timely (bottom line) relevance.
Michael D. Moberly December 30, 2016 ‘A business blog where attention span really matters’!
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 of a multi-year project undertaken by The Brookings Institution titled ‘Understanding Intangible Sources of Value’. This project was authored by a strong troupe of subject matter experts. In my judgment, ‘Understanding Intangibles’ remains a very insightful and illuminating treatise equal to the fine work on IA’s (intangible assets) developed-produced at prominent UK and Swedish institutions.
Then, as well as now, ‘Understanding Intangibles’ prompted debate and signaled change, away from tangible – physical assets to non-physical, intangible assets as the foundations to most company’s value and sources of revenue. In no small part, this change grew out of recognition that conventional financial statements and balance sheets, with their traditional reporting-accounting of tangible assets, to the exclusion of IA’s (intangible assets), no longer captured – painted an inclusive portrait of company’s actual financial wealth or health. That’s because growing percentages of companies globally, were engaging and benefitting from the ‘knowledge-technology era’ (which large segments of the world were immersed at the time). This era was largely spear-headed by the infinite depth, breadth, and range of IA’s, broadly categorized as being comprised of intellectual, structural, and relationship capital.
From the ‘knowledge-technology era’ emerged a shift to – dominance of IA’s, and perhaps, not so coincidentally, influenced further sophistication, influence, and growth of the…
- transformation of entire industry sectors, i.e., transportation, financial services, and telecommunications, etc., from regional and national, to global entities.
- development and integration of new technologies and companion (efficient) work processes.
- accessibility to globally coordinated and instantaneous (air, sea, land, and rail) supply and product-service distribution chains.
- the ability for new companies to enter markets – industry sectors and secure rapid returns and competitive advantages by the prudent investment, acquisition, development, and monetization of strategic IA’s.
- aggressive and predatorial market-sector entry tactics practiced on a global scale by ‘legacy free’ players and countries.
Collectively, these and other simultaneously occurring phenomenon intensified a global business investment and transaction environment, in which IA’s are consistently in play. Similarly and inevitably, certain parallel demands on companies would surface. That is, businesses seeking strategically sustainable tracts would be obliged to be continually engaged in innovation, ala IA’s, as one requisite to remaining relevant, competitive, and financially sound coupled with the necessity to develop and introduce new products, services, create efficiencies, and add-on’s through increasingly higher levels (quality) of IA inputs.
Of the numerous positive-lucrative outcomes to this phenomenon, one is that business innovation, competitiveness, value, revenue, profitability, and sustainability were being acknowledged by the forward looking-thinking business leaders as injecting and commoditizing targeted and relevant IA’s, particularly intellectual, structural, relationship, and creative capital at the right place, at the right time!
A second positive-lucrative outcome to this phenomenon was that IA’s were being universally recognized as primary conduits-foundations to business innovation, competitiveness, value-adds, and creating new sources of revenue. The realities, pressures, and intensity of global competition continued to pivot on IA’s. Spearheading companies that were already (effectively, efficiently, successfully) engaging their IA’s, as well as those businesses on strategic paths to do so, would, in all likelihood, remain operationally sustainable, competitive, and profitable.
Importantly, investments in the development and utilization of relevant and innovative IA’s would provide resonate clarity to the economic fact – business operation reality that 80+% of most company’s value, sources of revenue, and ‘building blocks’ for growth, sustainability, and future wealth creation were being fueled, almost exclusively, by business decisions rooted in enhanced awareness and appreciation for the contributory role and value of IA’s.
The prominent work of Baruch Lev (NYU, Stearn School of Economics) in the IA arena cannot be understated as being a consistent and forward looking-thinking contributor.
To be sure, his work continues to impact-influence the intangibles community which, in many respects, I believe, is encapsulated in his remark…’if intangibles are so risky, their benefits so difficult to measure and secure, and their liquidity (tradability) so low, how did they become the most valuable assets most companies possess’?
Michael D. Moberly December 28, 2016 ‘A business blog where attention span really matters!
As an IA (intangible asset) strategist, risk specialist, trainer, and speaker, it is my passion to guide companies and clients to recognize the business imperative to develop, assess, safeguard, and exploit their IA’s and convert them to sources of revenue, value, and competitive advantage!
As an IA strategist, the primary emphasis much of my work, on behalf of businesses and client’s, is its focus on ‘the revenue and competitive advantage side’. I find many companies and management teams invariably contend, some dismissively, others receptive to engaging the nuanced challenges and difficulties regarding their IA’s.
In the (IA) conversion processes, challenges may also emerge over control, use, ownership, and origination of particular IA’s. The materialization of either can impede not only the conversion process, but also, the projected and profitable execution of new initiatives or transactions when IA’s are in play, or possibly even provoke a party to, quite literally walk away. In today’s go fast, go hard, go global work (process) environments, unraveling and resolving business challenges or disputes about the utilization and value of IA’s warrant rapid and multi-faceted attention linked to strategic outlook and planning.
I am not suggesting all business challenges derive from misunderstandings or misgivings about IA’s, or, for that matter, adversely affect IA’s in play. However, accepting the universal economic fact that 80+% of most company’s value, sources of revenue, and ‘building blocks’ for growth, sustainability, and future wealth creation today, lie in – derive directly from IA’s, it’s prudent to expect there will be more business challenges related to the manner-in-which key – in play IA’s are – can be developed, acquired, valued, monetized, safeguarded, and applied in every conceivable type of transaction.
Moreover, IA development, valuation, application, and safeguards are being realized-accepted as business operation norms, not to be cordoned off as the exclusive (do not touch) domains of legal counsel and/or accounting. This makes it all-the-more essential to have, at the ready, sufficient IA operational familiarity from which deliberate, lucrative, tactical, and competitive decisions will emerge rapidly, and at will. Collectively, IA operational familiarity will mitigate most potentialities for the materialization of risk, impediments, and/or adverse (uncompetitive, non-producing) outcomes to new initiatives or transactions.
Large percentages of business relationships and transactions today develop-advance on-the-basis-of ultra-valuable and competitive advantage IA’s being in play. As such, the stakes and outcomes are consistently high. It is here that I believe, respectful and genuinely collaborative IA strategists – specialists, as myself, are positioned to…
• provide counsel – guidance for identifying, unraveling, and assessing (IA dominated) circumstances, and
• develop lucrative-competitive strategies to benefit company’s and/or client’s, mitigate risks, and identify
opportunities for further exploitation of IA’s.
To be sure, paradigms, ala the globally universal (business) shift, wherein today, 80+% of most company’s value and sources of revenue arise from non-physical – intangible assets, and substantially less so from physical – tangible assets warrants, in my judgment, respectful training, ample proof of concept, examples of successful application, and indeed, leadership. Unless or until I am invited into a business or client mass to execute each, excuses by leadership to ignore or dismiss IA’s and their contributory role and value that’s rooted solely in convention or past practice, is indeed, short-sighted.
My sense of being professional, i.e., a consultant, risk specialist, trainer, and speaker regarding matters related to IA’s is…
• not founded solely on a conventional business model of maximizing numbers of engagements and calculating-differentiating costs and revenue.
• to serve as a learned venue to respectfully articulate and elevate businesses operational familiarity with their IA’s, which is being achieved through my 720+ long form posts at the ‘Business IP and Intangible Asset Blog’ I created in 2006, and the 70+ national and international presentations, seminars, and invited (small group) discussions.
• to avoid commencing any engagement by undemocratically assuming my experience, intellect, and work products exceeds or subordinates comparable qualities held by companies, firms, management teams, and clients.
• to emphasize – demonstrate IA development must strategically mesh with revenue generation, value creation, and competitive enhancement.
• to bring relevance and clarity to IA operability that is embedded with respectful guidance for applying IA’s strategically, profitably, and mitigate, as much as possible, the inevitable risks.
Michael D. Moberly August 19, 2016 ‘A blog intersecting intangible assets and business.’
Through my lens, it is quite clear, if security initiatives – systems are not designed to safeguard or advance an environment’s key – relevant IA’s (intangible assets), those with the fiduciary responsibility for their purchase, deployment, and support, are obliged to recognize substantial value – competitive advantage will go unnoticed.
An often overlooked, under-appreciated, and perhaps even wholly unrecognized, but, never-the-less, essential aspect to marketing, selling, and assessing outcomes of security (loss prevention, asset protection, monitoring) products and/or systems, is recognizing the economic fact that 80+% of most company’s value, sources of revenue, and ‘building blocks’ for growth, profitability, and sustainability lie in – evolve directly from intangible (non-physical) assets, i.e., know how, relationship, and structural capital, brand, and reputation, etc., not tangible (physical) assets, i.e., property, equipment, inventory, buildings, etc.
When security related products are effectively deployed and integrated into an environment and aligned with supportive policies, practices, and organizational – business unit culture, their contributory value and competitive advantage to an enterprise can be substantial, even more so when the party recognizes what and how to measure the deliverables, i.e. effects on users and outcomes. For example, when applied…
• to the lodging – hospitality sector, security products/systems can measurably enhance existing and/or produce new IA’s (intangible assets) in the form of users’ sense – feeling of being (more) safe, secure, and productive, which in turn favorably affects the hotel’s (company) reputation, image, and guest goodwill, etc., by
Perhaps this is self-evident. On the one hand, my experience clearly notes this example, among countless others…
• serves as an important starting point for framing promotional pitches related to security products because most buyers seek – desire these outcomes, i.e., represent what’s needed – necessary, however…
• are unfamiliar (un-schooled) in the measuring – assessing the contributory values and/or functionality of security products, systems, or services and mitigating risks with their own sector – environment.
It is essential, in my view, to incorporate the correct descriptor in ‘the pitch’, i.e.,
• elevate awareness of the assortment of IA’s that are commonly embedded in every environment and industry sector.
• ensure the functionality – deliverables of security products are distinguished relative to the environment they are deployed and how they enhance relevant IA’s.
For example, when users of a lodging/hospitality environment sense that environment respects their patronage or productivity by introducing sector specific security measures to make it as safe, secure, productive, and efficient as possible, they will be inclined to return that respect by
• being a repeat guest, as well as,
• elevate employee retention, loyalty, and productivity.
Security product developers, producers, and vendors would be well served by adapting and incorporating variants of this language, sector specific, of course, in their marketing/promotional materials and/or sales pitches. Again, the rationale for incorporating this language is that today’s business environment is global, increasingly competitive, predatorial, and aggressive, and dominated by knowledge-intangible asset intensive firms regardless of sector.
Professionally then, it seems obligatory for security products, i.e., how they are marketed, promoted, and ‘pitched’ reflect that irreversible and paradigm shifting economic fact – business-consumer reality, particularly as management teams, c-suites, and boards become more attuned to IA’s in fiduciary contexts and as fiduciary responsibilities.
Lodging sector management teams should be engaging their environment’s IA’s as integral to enterprise risk management practices. Real and sustainable value and competitive advantages can be embedded with lodging sector guests by training personnel to identify, unravel, and sustain control, use, ownership, and monitor (asset) value, materiality, and risks. This can be achieved by respectfully guiding them to recognize the IA’s relevance to a guests’ (lodging) experience.
On the other hand, most conventional security product presentations-pitches over dramatize the need for mitigating fear, uncertainty, and doubt (FUD) which a percentage of lodging guests will be inclined to dismiss as a matter of personal practice, the outcomes will likely be less than fully favorable.
However, when security product (system, service) vendors replace the conventional with a strong narrative (methodology) rooted in ‘forward looking’ focus of safeguarding the value and sources of revenue present in a prospective client’s lodging environment, i.e., their IA’s, the probability of experiencing a series of consistent successes increases substantially.
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
• 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.
Michael D. Moberly April 12, 2016 ‘A blog where attention span really matters’!
It is an economic fact that the primary sources of company value, revenue, and competitiveness, etc., began noticeably shifting in the mid-to-late 1990’s.…
• from tangible (physical) assets, e.g., property, equipment, inventory, etc.,
• to intangible (non-physical) assets, e.g., reputation, brand, and goodwill particularly.
This recognition coincided with the descriptive transformational expression ‘knowledge-based economies’ wherein learned economists calculated 80+% of most company’s value, sources of revenue, competitive advantage, and ‘building blocks’ for growth, profitability, and sustainability now lie in – evolve directly from organizations intellectual, relationship, structural, and competitive capital as well as other forms – manifestations of IA’s
My work is a culmination of 25+ years of professional consulting, university teaching, continuous research, public speaking, and publishing on matters variously related to IA’s and their intellectual property cousin. My consulting engagements, media appearances, and research in the IA arena have largely focused on…
• identifying, assessing, safeguarding, and mitigating risk.
• conducting transaction due diligence when IA’s are in play, which they consistently are, and
• facilitating company cultures prudently linked to operational familiarity with IA’s contributory role and value.
The centerpieces of my work, writing, and consulting today lie in IA advocacy, i.e.,
• value-revenue-competitive advantage capabilities of IA’s.
• identifying, unraveling, and assessing IA’s contributory and collaborative value roles for companies.
• recognizing IA’s life, value, and functionality life cycle.
• aligning IA risk assessments with transaction due diligence.
Today, profitable business operations and transactions are increasingly dependent on management team’s ability to effectively and consistently foster, harness, utilize, and convert its IA’s into relevant forms of value, revenue, competitive advantage, and sustainability.
But, knowhow, i.e., intellectual, structural, relationship, and competitive capital (IA’s) can deliver economic and competitive advantages only if/when the developer-holder of those assets can sustain their control, use, and ownership, and monitor their value and materiality throughout their respective value – functionality cycle.
Michael D. Moberly January 19, 2016 ‘A business blog where attention span really matters’!
As I see it, most conventional asset valuation methodologies are rooted in structured milieus of accountancy regulations and standards codified primarily in earlier business eras when tangible – physical assets were the sole basis for valuation and making projections about worth, growth, revenue, and profitability, etc. Too, most conventional (asset valuation) methodologies have been variously silent on or indifferent to assigning comparable values to a company’s – organization’s IA’s (intangible, non-physical assets) which are rooted in intellectual, structural, relationship, and competitive capital.
Such conventional business (asset) valuation methodologies frequently find application to buy-sell transactions that accentuate tangible (physical, fixed) assets ala those reported on financial statements and balance sheets. But, in my view, these conventional methodologies are essentially snap-shots-in-time that leave the actual sources of organization – company value, competitiveness, and strategic performance out of the transaction (buy, sell, merger) equation by seldom, if ever, distinguishing (recognizing, assessing) the underlying and contributory role and value of IA’s (intangible assets). After all, it is the IA’s that make – render transactions attractive and lucrative and competitive outcomes to happen.
In fairness however, conventional asset valuation methodologies were not designed (intended) to capture – value the intangible. But, that does not negate the need to do so now. After all, even the most ardent advocates of the status quo would now have some fiduciary obligations to acknowledge that IA’s are indeed relevant, integral, and strategic markers for gauging current – future organization value, competitiveness, and performance.
So, through my lens anyway, the conventional valuation methodologies produced largely subjective value estimates, often portrayed in ranges, ala Antiques Road Show, without distinguishing any specific contributory role – value linkage produced by IA’s. It’s reasonable to assume then, in numerous instances, such subjectivity, if in fact it is that, rendered organization leaders and management teams and their stakeholders unnecessarily receptive to engaging in speculative discord, i.e., an incentive for one or both parties engaged in a transaction to instigate prolonged disputes, even litigation, whose outcome is likely to stifle existing transaction momentum, strategic planning, and competitive advantages.
Mr. Moberly is an intangible asset strategist and risk specialist and author of ‘Safeguarding Intangible Assets’ published by Elsevier in 2014, email@example.com View Mr. Moberly’s videos on YouTube at ‘safeguarding intangible assets’ or his CNN and CNBC videos at his webpage http://kpstrat.com
Michael D. Moberly January 5, 2016 ‘A business blog where attention span really matters’.
I am an advocate, avid listener, and sustaining member-supporter of the NPR (National Public Radio) station in my city. This admission aside, it’s quite correct, in my judgment, to characterize NPR, and its comparables and collaboratives, i.e., American Public Media, Public Radio International, and Public Radio Exchange, etc., as IA (intangible asset) intensive and dependent organizations.
Readers are respectfully obliged to acknowledge that IA (intangible asset) intensity and dependence are not the exclusive domain of private sector, Fortune-ranked corporations, ala Silicon Valley research based startups. Instead, companies, organizations, and their management teams who wish to capture and exploit their IA intensity-dependency should recognize it emanates from the convergence of intellectual, structural, relationship, trust, reputation, and creative capital relative to organization culture and mission variants, to create – enhance value, for example…
- IA intensive…translates as a high percentage (80+%) of public radio station’s value and impact to its communities of listeners and contributors lie in – evolve directly from the formatting and delivery of its IA’s.
- IA dependent…means that public radio’s daily array of attractive-desirable programming is reliant on a…
- consistent influx and integration of intellectual, structural, competitive, and relationship capital, ala IA’s…
- that collectively and collaboratively attract and sustain broad communities of (national, international) listeners, a percentage of which…
- convert to enhancing and sustaining communities of listeners, memberships, contributions, sponsorships, and corporate-foundation underwriters.
- consistent influx and integration of intellectual, structural, competitive, and relationship capital, ala IA’s…
Public radio seems to enjoy the benefits of a continuous and evolving supply of ‘people assets’ who can seamlessly and collaboratively deliver forward looking – thinking variants of their intellectual, structural, and creative capital which inevitably meld into communities of listeners’ ears via expanding platforms. It is for these reasons that I am confident public radio station’s value, when factored through an IA lens, would lie consistently north of the 80+% figure referenced above.
Client organizations and/or seminar attendees of mine who achieve familiarity with and interest in IA’s, frequently ask me to identify which IA’s their organization – company intensity and dependency are most reliant. The answers to these questions are best addressed through an ‘IA mapping’ exercise I developed which identifies paths-routes that describe when, where, and how IA value and competitive advantage originate, develop, attach, collaborate, and ultimately flow.
I generally endeavor to dissuade organizations and their management teams from using some of the more conventional methodologies that are dismissive of intangibles or merely provide a ‘snap shot in time’ (portrait) of IA’s contributory – collaborative role and status absent recognition of value. The ‘IA mapping’ methodology, which I continually endeavor to refine, acknowledges that the contributory and collaborative aspects underlying IA value, competitive advantage, and materiality is seldom static, rather evolves to accommodate any shifts to an organization’s mission, technology delivery formats, or other issues of the day, etc.
Public radio’s IA asset intensity and dependency also correlates to trust and relationship capital and reputation. Sustaining and banking each category/type of IA with communities of listeners, supporters, and underwriters warrant consistent stewardship particularly in markets where other media-journalistic outlets compete.
Mr. Moberly is an intangible asset strategist and risk specialist and author of ‘Safeguarding Intangible Assets’ published by Elsevier in 2014, firstname.lastname@example.org
Michael D. Moberly December 30, 2015 ‘A business blog where attention span really matters’.
An oft cited reference about contemporary American labor and today’s increasingly consumer driven-dependent economics is that fewer among us are employed in positions where we actually make-produce something in its entirety. While there are obvious truisms to this perspective, it’s essential to acknowledge most of us do contribute to product-service completion and outcomes but, through individual, collective, and/or collaborative inputs of our intellectual, creative, relationship and structural capital, i.e., the foundational IA’s (intangible assets)!
There has indeed been a shift in the origins of organization value, income (revenue), creativity, and competitiveness, etc., from milieus of physical – tangible assets to interwoven and collaborative bundles of non-physical, IA’s. To be sure, for IA intensive and dependant businesses, it is no longer a foregone conclusion that those with the most buildings, the biggest machines, and the most employees will win! Similarly, higher percentages of organizations today would be hard pressed to validate any perception they still function exclusively on the inertia of past – pre-IA era practices.
The ascension of IA’s in business value and output commenced in the late 1990’s as the knowledge – know how era with its foundation of intellectual, structural, relationship, and creative capital were becoming irreversibly evident. In other words, IA’s were increasingly integral to business operability and there was no foreseeable ‘bubble’ to the knowledge era. Competitiveness, efficiency, and profitability were descriptive terms rapidly being associated the growing number of businesses that legitimately are IA reliant and dependent.
During this time, two extraordinarily influential and parallel research projects were underway, i.e., New York University’s, Intangibles Research Project and The Brookings Institutions’ Task Force on Intangibles (Unseen Wealth). Both projects were similarly focused on unraveling confirmatory evidence that organization value, sources of revenue, and competitiveness were indeed originating in non-physical (intangible) assets at such a rapid pace they (IA’s) were usurping the conventional dominance of physical (tangible) assets as the exclusive underwriter to business profitability and sustainability.
Also, confirming and often preceding research conducted-published by UK and EU (European Union) universities and institutions made substantial contributions to bringing IA’s into the vestibule of business lexicon. Initial estimates at the time were that 50+/-% of organization value and sources of revenue derived from IA’s.
Mr. Moberly is an intangible asset strategist and risk specialist and author of ‘Safeguarding Intangible Assets’ published by Elsevier in 2014.
Michael D. Moberly April 28, 2015 ‘A blog where attention span really matters’!
With a significant level of confidence, most conventional, snap-shots-in-time, and subjective prognostications gleaned from IA (intangible asset) valuations and/or audits, do not provide prospective buyers, sellers, investors, or M&A management teams with the necessary insight reflective of today’s business economic realities and due diligence obligations.
Considering it is an indisputable economic fact that 80+% of most company’s value, sources of revenue, and by extension, favorable outcomes to business transactions are premised on a party’s ability to sustain control, use, ownership, and monitor (IA’s) value, materiality, and risk, each of which will inevitably be in play to impact a transaction’s outcome.
Business transaction valuation and due diligence should provide prospective buyers, sellers, investors, and M&A management teams with objective invest-don’t invest, buy-don’t buy clarity, e.g.
- IA sustainability, attractivity, demand , and receptivity to convergence.
- the frequency – intensity which the IA’s in play are targeted by – vulnerable to predatorial data mining, business-competitor intelligence, and economic espionage operations.
- assets’ proprietary status, competitive advantage components, or trade secrecy status.
The business valuation community argues that expanding the scope of IA valuations and due diligence to include these components exceeds the canons, doctrine, and statutes to which accounting, financial services, and legal are variously obligated to follow, i.e., state and federal accounting rules and regulations which stipulate what, which, and how IA’s are to be valued and reported on balance sheets and financial statements.
In fairness, state and federal accounting rules and regulations stipulate methodologies for calculating the value of IA’s. In many instances, I sense such valuations are unnecessarily narrow and fall short, one way is that IA’s are differentiated largely on whether they have been externally acquired or internally developed, and then consolidated under the single category of goodwill.
I suspect continued adherence to such conventional IA reporting and accounting rules will serve to further stifle – suppress management team’s interest in – motivation to profitably and competitively engage their organization’s IA’s beyond the narrow time-bound confines of goodwill, and
- explore the relevance of IA’s contributory value and functionality cycles, and IA’s
- IA’s vulnerability to various risks which, once materialized, will adversely affect – undermine asset’s value, functionality, and competitive advantage life cycle.
Admittedly, as an independent intangible asset strategist and risk specialist I do not feel bound by the exacting and conventional state and federal accounting rules and regulations. This represents a creative sovereignty that permits me to engage in respectful outside-the-box strategizing and asset risk management on behalf of IA clients.