Archive for 'Intangible assets contributory value.'
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
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)