Archive for 'Intangible assets contributory value.'

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!

Intangible Assets, Don’t Be Dismissive Before Reading This

June 5th, 2017. Published under Intangible asset training for management teams., Intangible assets contributory value., Intangibles as strategic assets. No Comments.

Michael D. Moberly June 5, 2017 m.moberly@kpstrat.com ‘A business intangible asset blog where attention span really matters’.

Your Company’s Intangible Assets, Don’t Dismiss Them Before You Read This
Based on numerous client engagements and countless detailed conversations about the relevance of intangible assets with business owners, leadership, management teams, investors, and entrepreneurs, I have concluded that, in a significant percentage of circumstances in which there is acknowledged underperformance it is variously related to challenges insofar as distinguishing and converting the contributory role and value of IA’s (intangible assets) to sources of revenue and competitive advantage for every initiative, process, and/or transaction undertaken.
Underlying these challenges is the irrefutable and irreversible economic fact that 80+% of most business’s value, sources of revenue, competitiveness, future wealth creation, reputation, brand, and sustainability today, lie in – emerge directly from intangible assets.
Unfortunately, a percentage of business leaders and management teams, for various reasons, are…

• dismissive of this economic fact and instead convey contentment with
the status quo which typically translates as continuation of time-
honored convention and past practice.

• operationally unfamiliar with the rapid expansion of IA intensive and
dependent firms and instead, interpret IA intensity and dependency as
theoretical embellishments, rather than factual business realities.

It is here that I introduce IA business strategists to Alan Alda’s newly published book titled ‘If I Understood You, Would I Have This Look on My Face?’, which I have taken the liberty of applying here. Alda introduces his book with various scenarios having to do with ‘communicating for understanding and action’, e.g.,

• medical patients not understanding their doctor’s orders sufficiently
to follow them.
• a state’s flood mitigation and dam engineers are unable to convince
relevant authorities to dedicate resources to reinforce-repair a dam
with a high probability-risk of breach.
• parents are unable to develop sufficient trust with their teenage son
and daughter to mitigate the probability one or both will engage in
taking-using illegal (addictive) drugs.

In each instance, if the recipient of the information does not understand, is unreceptive to the cautionary forewarning or taking pre-emptive (mitigating) action, adverse outcomes are likely to materialize.

Admittedly, on several occasions and at various stages of client engagement (on IA matters) I have sensed my counsel being variously discounted. Respectful follow-up discussions with clients often reveal they have construed the intellectual-managerial task of achieving operational level familiarity with their IA’s and work toward developing a business unit and/or company-wide IA intelligent culture exceeds immediate preference to retain much of the status quo. In practical terms, this often translates as applying only the aspects of IA management which they deem the most essential without distinguishing good, better, best.

The importance of bringing operational relevance and clarity to managing companies-business’s through IA’s lens, is apparent from a conversation which I had the pleasure to be engaged several years ago. I was standing near the tarmac in the early morning hours of a chilly spring day with a senior executive of a global air freight company. From our vantage point, we could readily observe ‘as far as our vision would allow’, what I would characterize as, nothing short of…

…a highly choreographed convergence of activities wherein cargo jets were
landing, taxiing, unloading, re-fueling, changing crews, loading and preparing for on-time departure to strategic ‘hubs’ globally.

While I and the executive observed these highly orchestrated activities occurring before us, I turned to the executive and remarked that…

…through my lens, I was observing what amounted to billions of dollars of
of repeatedly – continuously tweaked intangible assets, i.e., intellectual,
structural, and relationship capital which seemingly were converging
seamlessly, efficiently, and timely.

Interestingly, the senior executive’s immediate response to my observation was very matter-of-fact and quite different…

…no Mike, what I see before us, are billions of dollars of tangible – physical
assets; aircraft, equipment, technologies, and trained-skilled personnel
interacting to make this company competitive and efficient, as it must do on
a 24/7/365 basis.

Obviously, readers may draw their own conclusions from the above exchange. However, I ask each to do so in the context of the…

…globally universal economic fact that 80+% of most business’s value, sources of revenue, competitiveness, reputation, brand, and sustainability today, lie in – emerge directly from IA’s (intangible assets).

That’s not to suggest the obviously differing views expressed by myself and the senior executive were (wholly) right or wrong. In this instance, both of our perspectives obviously held merit. Mine, I would argue, may have greater relevance in the long term insofar as this global air cargo carrier sustaining its’ value, competitive advantages, and sustainability. That’s because, this company, like so many others today, is indeed ‘intangible asset intensive and dependent’.

There is absolutely no debate that aircraft and the associated machinery and equipment are understandably expensive tangible assets. However, the contributory role and value of each aircraft is maximized by the company…

• continuously developing, integrating, and aligning relevant
intangible asset efficiencies, i.e., updates, rejuvenations, and re-
purposed processes and systems, ala intellectual, relationship, and
structural capital.

• ability to effectively communicate same in 100+ languages and
dialects wherever this air cargo company has or proposes business
relationships.

• converging each of the above at the right time, right place, and
right way delivers – produces value to the company and its customers
along with competitive advantages that collectively sustain – enhance
its brand, image, and goodwill that is expected and demanded 24/7/365.

So, regardless of what, how, or why I or the senior executive characterize ‘what we observe’, it’s important to affirm, the tangible-physical assets the senior executive referred to are, in my judgment, what follows, not precedes, coordinated and timely integration of ‘go, no go’ intellectual, structural, relationship, and competitive capital (IA’s), ala origins vs. outcomes! IA’s are indeed the foundational requisites underlying the sustainability, competitiveness, and profitability this, and other IA rich (intensive, dependent) companies project and enjoy.

I genuinely enjoy witnessing, following an engagement, wherein business leadership sense the excitement, passion, and receive the economic and competitive advantage benefits from engaging their IA’s. After all, IA’s produce-deliver economic and social realities which are observable, evidentiary, monitorable, and measurable, and contribute to a company’s value, sources of revenue, and sustainability. This is not merely subjective opinion or ‘lecture hall’ theory. Admittedly, merely engaging a company’s IA’s is not the final word, there remains more research and practice. But, the economic fact that 80+% of most company’s value, sources of revenue, competitiveness, and sustainability are inextricably linked to IA’s is not going away.

This post, was in part, influenced by Alan Alda’s newly published book titled ‘If I Understood You, Would I Have This Look on My Face?’

Intangible Asset Unfamiliarity

May 11th, 2017. Published under Intangible assets contributory value., Transaction negotiations and intangible assets.. No Comments.

Michael D. Moberly May 11, 2017 ‘A business intangible asset blog where attention span really matters!’

Not infrequently, when a particularly challenging and risky business transaction is undertaken by a company, but ‘goes south’, it should prompt review by an IA strategist and risk specialist. If so, one likely revelation is that transaction under-performance or failure is variously attributable to operational – circumstantial unfamiliarity with, how, when, why, where, and which IA’s were in play but, not acted on effectively, lucratively, or competitively. Or, the IA’s were insufficiently safeguarded with risks left unnoticed, unmonitored, and unmitigated to influence one or both parties to ‘walk away’.

IA unfamiliarity, frequently translates-materializes as the omission of IA’s from transaction planning and execution, which leaves their contributory role and value, projected sources of revenue, and competitiveness out of a transaction’s ‘go, no go’ equation, and otherwise, off the (transaction) negotiating table. It is true, that the dominant drivers and ‘underwriters’ to most every business transaction are the IA’s which are and will inevitably be in play. As such, they will be vulnerable-receptive to various types-levels of risk, e.g., competitive advantage under-mining, targeted erosion of (asset) value, and/or numerous types-levels of compromise.

It is necessary today, that businesses and their management teams recognize risk can materialize in other than single, unrelated acts or events. Quite the opposite, any one, or multiples of risks may occur simultaneously and/or in ‘chain reaction’ contexts and wholly negate or substantially minimize projected-desired outcomes, even more so when (IA) unfamiliarity and risk mitigation are either absent or executed in a mediocre manner.

Similarly, poorly planned and executed business transactions that experience underperformance or failure are seldom, if ever, ‘one off’ events, but, never-the-less, may be redeemable. With numerous (IA dominant) engagements behind me, I have come to conclude that not an insignificant percentage of the issues businesses and management teams experience regarding their IA’s, irrespective of how evident and present they are, is variously attributable to those assets being ‘non-physical’, i.e., outside conventional (human) senses of sight, sound, touch, or smell, and therefore, they find it intellectually challenging to converge (the intangible) with the conventions of tangible-physical assets. Another consequence of asset ‘intangibility’ is that it can dissuade some business leaders and management teams from recognizing IA’s as being relevant players and/or contributors to company value, competitiveness, revenue, or sustainability.

It is true, a percentage of business leadership, remain variously dismissive and under-appreciative of IA’s, i.e., what they are, and how to utilize (exploit) them effectively, lucratively, and competitively, in other words, recognizing their contributory role, value, and competitive advantages which they can, and often do, produce. Not so coincidentally then, when IA’s are treated dismissively or wholly neglected, their contributory value can be significantly weakened, conceded to competitors, or relegated to the non-denominational and virtually unusable ‘catch-all’ of goodwill.

Either way, I find there is no single mechanism to overcome these real and detrimental shortcomings, aside from seeking – achieving operational level familiarity with IA’s for which one has control, use, ownership, and (fiduciary) responsibility to safeguard, exploit, monetize.

Consistently, I find, practitioners who possess operational familiarity with IA’s, especially those in play to a transaction or initiative as contributors to projected value, revenues, competitive advantages, and marketing and branding outcomes, also possess operational insights that extend well beyond merely what’s posted on conventional financial statements and balance sheets.

As always comments are welcome!

Converting Intangible Assets To Sources of Value, Revenue, and Competitive Advantage…

April 17th, 2017. Published under Intangible Asset Value, Intangible assets contributory value.. No Comments.

Michael D. Moberly April 17, 2017 ‘A business blog about intangible assets where attention span really matters’!

As an IA strategist, there is satisfaction in providing respectful and lucrative guidance to businesses to pilot their IA’s from their identification, assessment, and development stages, including instances of acquisition, through monetization and exploitation, i.e., their conversion to sources of revenue, value, and competitive advantage. This represents a major emphasis, to focus on ‘the revenue and competitive advantage side’ of IA’s and business.

There are indeed, various paths to IA conversion, frequently nuanced by circumstance, context, risk, and business-client objective. Devising particular, i.e., good, better, best strategies to convert IA’s, often depends on – may vary relative to issues and/or challenges related to (past-present-future) control, use, ownership of the assets, and the assets’ origins and development, which may already, or will likely be, in play. In most instances, the process remains rather constant, which is to identify, unravel, assess contributory role and value, and ensure the assets in play are effectively safeguarded in a manner commensurate with the IA’s contributory role and value and conversion strategy.

Aspects to IA conversion that should not be overlooked or underestimated are ensuring execution will not influence new challenges and/or risks to surface that provoke a party to wholly withdraw from a proposed or pending transaction.

For these, and other reasons, especially in today’s go fast, go hard, go global workforce and business (transaction) environment, unraveling and endeavoring to lucratively and competitively resolve IA-related challenges, risks, or disputes (proactively, when possible) surely warrants having concurrent and at will executable capabilities to engage rapidly, knowledgeably, and effectively, ala IA operational familiarity.

To be sure, I am not suggesting here that all business challenges and risks today are sparked by misunderstandings, misgivings, or alternate interpretations about the disposition, contributory value, ownership, control, or use – exploitation of IA’s, most any of which, if materialized, would deliver a strong probability for adversely affecting any-all IA’s in play, absent safeguards and risk prevention – mitigation.

However, it is quite imprudent for business leadership-management teams to exhibit dismissiveness and/or disregard for the globally universal economic fact that 80+% of their company’s value, sources of revenue, and ‘building blocks’ for growth, sustainability, and future wealth creation lie in – derive directly from IA’s. It’s prudent on the other hand, to anticipate and expect there are always potentialities for challenges-risks to emerge for most every conceivable type of transaction or initiative. That’s because, IA’s are always on and inevitably in play!

Again, and obviously, the primary objective is to mitigate, if not prevent, risks from materializing, especially those which can (will) manifest as business impediments, stifle a transaction’s momentum, and/or spawn new risk variants that will likely yield, absent rapid and effective intervention, uncompetitive and unproductive outcomes.

That said, as a practitioner, I see the stewardship, oversight, and management of IA’s being realized – accepted by the forward thinking, as business operation norms today. In other words, IA’s should not be cordoned off as the exclusive (do not touch) domains of legal counsel, accounting, or auditing. For those business leaders – managers not already so inclined, there is ample evidence to suggest it’s now essential to acquire, and have, at the ready, sufficient IA operational familiarity upon which, deliberate, lucrative, competitive, and executable strategies can emerge rapidly, and perhaps, most importantly, at will.

There is no objective or persuasive doubt today, that growing percentages of business relationships and transactions emerge, develop, and execute on-the-basis-of ultra-valuable and ultra-competitive IA’s being available and in play. As such, the stakes and outcomes to business transactions and initiatives are indeed, high. So, it is here that I believe, respectful,
knowledgeable, and genuinely collaborative IA strategists must be ‘permanently’ positioned to…

…provide the necessary and relevant counsel to develop lucrative-
competitive strategies (paths) to benefit IA intensive-dependent
businesses and companies by unraveling, mitigating, and/or preventing
materialization of risk that will undermine asset value, revenues, and
competitive advantages.

Intangible Asset’s Contributory Value

February 21st, 2017. Published under Intangible asset mapping., Intangible asset valuation., Intangible assets contributory value.. No Comments.

Michael D. Moberly February 21, 2017 A business intangible asset blog where attention span really matters!

During several engagements, I observed clients becoming frustrated with some (conventional) methodologies for valuing their IA’s. With the intent to mitigate such distractions, I set about developing a respectfully informative basis upon which IA’s could be distinguished and values (i.e., role, worth, materiality) assigned which I refer to the ‘contributory value’ methodology. This methodology allows IA’s contributory value (role, worth, materiality, etc.) to be distinguished relative to a business, a specific project, research, and/or a transaction.

The ‘contributory value’ methodology itself, is not quantitative, in the conventional sense. That is, there is no (one-size-fits-all) mathematical equation or formula used here to calculate and ultimately assign dollar value (ranges) to IA’s. Instead, this methodology demonstrates – reveals graphically, how, where, when, and which IA’s affect (business) value, competitiveness, and revenue, and therefore, deliver – possess ‘contributory value’.

The distinctive simplicity of the contributory value methodology is very relevant to circumstances other than transactions in which IA’s are being bought, sold, transferred, licensed, etc. For example, conducting a contributory value assessment for a business-company, provides leaders and management teams with practical and strategic insights about how, where, when, and which IA’s are being applied (effectively, efficiently) and if – how they affect value, competitiveness, and revenue as well as lucrative strategies for amending the current situation.

The ‘contributory value’ methodology, applied in this context, also reveals (and unravels) far more about a business’s (IA) operational and financial state than conventional, standalone, snap-shots-in-time methods that do not wholly address IA’s relationship – connection, and contribution to other assets. Desirably, the ‘contributory value’ methodology brings clarity to IA valuation by emphasizing the interactive-collaborative relationship and connectivity to (other) IA’s.

My primary rationale for developing the ‘contributory value’ methodology is that it serve as a respectful segue to clients, unfamiliar with IA’s, to better understand and differentiate the how’s, the when’s, the where’s, and the way’s, which the IA’s they and their business produces, possesses, and uses (individually, collectively, collaboratively) affect and/or translate to value.

Too, the ‘contributory value’ approach, through its graphically descriptive content renders IA ‘contributions’ more recognizable, measurable, monitorable, and predictive, insofar as…

• their compatibility with a company’s mission, strategic planning, and operating culture, etc.

• the rapidity and repetitiveness which specific risks manifest to adversely affect any-all IA’s in play.

• evidence of IA compromise, materiality change, and/or value-competitive advantage erosion or dilution.

• executing new product development, launches, and market entry.

• their incorporation into business continuity/contingency (organizational resilience) planning.

• recognizing IA’s life, value, and functionality cycles.

• a means to kick start enterprise-wide IA intelligent culture.

Another equally valid reason for companies to apply the ‘contributory value’ methodology (product) is that, for the foreseeable future, only 20+/-% of the stock price of S&P firms, is explainable solely by the content of conventional balance sheets – financial statements, ala ‘book value’. (Adapted by Michael D. Moberly from the excellent work of Dr. Nir Kossovsky, CEO, Steel City Re)