Archive for 'Training'

Familiarity With A Company’s Intangible Assets Produce Multipliers and Risk Mitigators

May 14th, 2012. Published under Managing intangible assets, Training, Value Propositions. No Comments.

Michael D. Moberly    May 14, 2012

All too frequently the contributions’ intangible assets make to a company’s value and serve as sources of revenue are overlooked, neglected, or outright dismissed.  Equally unfortunately, those attributes are often obscured by intangible assets’ (a.) lack of physicality, and (b.) not knowing precisely where and how intangibles ‘fit’ on balance sheets and financial statements, or even reported at all.  Too, with equal frequency, the assets’ proprietary and competitive advantage features go unrecognized, un-protected, undervalued, or not valued at all.

I often characterize intangible assets to company management teams as being akin to the proverbial ‘hand in front of our face in a pitch dark room’. That is, they’re often developed internally, sometimes over time and embedded in a company’s routine operations, processes, and functions that, in many instances, fall under a management teams’ mba – tangible (physical) asset oriented radar.  Just as frequently, company’s engage in HR functions and other types of business transactions in which the intangible asset components of either go unnoticed, unused, and seldom effectively exploited.

So, why, or how is it beneficial and necessary for company management teams, c-suites, and boards to acquire a familiarity with intangible assets now?  And, how will such familiarity produce (translate as) multiplier effects and risk mitigators as the title of this post claims?

The key objectives are, of course, to position and exploit a company’s intangible assets in order to extract as much value and competitive advantage as possible throughout the assets’ value – functionality (life) cycle.

In my view, this occurs when management teams achieve two things:

  • begin exercising consistent, effective, and sufficient stewardship, oversight, and management of their company’s intangible assets, as the basis for
  • sustaining control, use, ownership, and monitoring the value and materiality of the assets

Other useful outcomes, i.e., risk mitigators and multipliers of effective and consistent (intangible) asset management include…

  • Elevating transaction due diligence quality by (a.) recognizing how to rapidly identify, unravel, and safeguard valuable – revenue producing assets in (b.) both pre and post (transaction) contexts.
  • Adding predictability to transaction outcomes by being able to recognize and assess asset (a.) stability, fragility, sustainability, and defensibility, and preferably mitigate risks, and (b.) relevance to achieving projected returns. competitive market position, anticipated synergies and efficiencies, and exit strategies.
  • Reducing the probability intangible assets (and IP) will incur unnecessary risk, i.e., (a.) become entangled and/or ensnared in costly, time consuming, and momentum stifling legal challenges, (b.) that can erode and/or undermine asset value, performance, or competitive advantages.
  • Providing a stronger foundation for aligning the utilization and exploitation of a company’s intangible assets with (a.) continuity-contingency plans, (b.) organizational resilience – risk management planning, and (c.) strategic business objectives.
  • Contributing to building a ‘company culture that’is (a.) attuned to intangible assets, their value, and contributions to (company) sustainability and profitability, and (b.) treats intangible assets as business decisions, rather than solely legal or accounting processes.
  • Strengthening the convergence of computer/IT security and intellectual property and intangible asset safeguards to achieve timelier awareness and pursuit of (IP) rights- ownership violations.
  • Providing a foundation for more effective application of (a.) knowledge management initiatives, and (b.) balanced scorecard approaches.

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 at  314-440-3593 or m.moberly@kpstrat.com

Intangible Assets: How A Smartly Made Small Move Can Set Much Bigger Things In Motion…

April 15th, 2011. Published under intangible assets, Training. No Comments.

Michael D. Moberly   April 15, 2011

One of the arguments being put forth here is that conventional models for delivering corporate training may well be outdated. That may come as no particular surprise to many!
The persistent and increasingly asymmetric nature and shear number of uncertainties, challenges, and problems that companies and organizations, and their employees, routinely face today are not always reflected in conventional (training) models that tend to ‘push out pre-built training’. The fact may well be, they’re simply less useful, if not obsolete. Exacerbating and dramatizing this of course, is that for a growing number of companies, the norm is operating in an aggressive, globally competitive, widely predatorial, and always winner-take-all business (transaction, operating) environment.

Conventional training programs are simply less relevant, John Hagel believes, particularly when considered in the context of their anticipatory nature, i.e., someone trying to anticipate in advance, what training – information people (employees) are going to need and when they’re going to need it. In that context, Hagel argues, most training tends to focus on (the presentation – acquisition of) knowledge that may well already be explicit and even codified, in other words, the training is well behind the need curve. And, when presented in this manner, as I’m confident most will agree, little, if any benefit will emerge.

Hagel, as most readers know, is an author and business consultant as are the co-authors of The Power of Pull: How Small Moves, Smartly Made, Can Set Big Things in Motion, John Seely Brown and Land Davison. ‘The Power of Pull’ is the type of book which I categorize as requiring significant amounts of reflection after reading. That is, the book conveys the on-going and very real shift in power, of which we’re in the midst, from institutions (organizations, companies, etc.) to individuals. This shift in my view, is, at least in part due to the evolution of the knowledge (intangible asset) based global (business) economy wherein today, it is an economic fact that 65+% of most company’s value and sources of revenue lie in – directly evolve from intangible assets.

The concept of ‘pull’, as Hagel, Brown, and Davison describe it in their book, is a mechanism that allows people (employees) to readily and quickly find and be able to access relevant resources (information, knowledge, etc.) precisely when they need it, somewhat akin, Hagel analogizes, to the Google and Bing search engines. But, one problem is, Hagel notes, is that the primary (training) model many organizations (companies) still use today is one that pushes, rather than pulls.

Instead, the authors advocate, companies should be thinking about building – using ‘pull platforms’ as the mechanism for (employee) knowledge acquisition, i.e., training. The pull approach essentially creates circumstances, preferably, in my view, like a ‘company culture’, in which the right people and the right resources and/or knowledge, wherever and whenever they’re needed, can be pulled in or drawn out and put to use proactively to quickly and effectively meet the need or demand.

A not so flattering reality is, according to Hagel, that most organizations (companies) operate on a model wherein the initial challenge is being able correctly anticipate – predict the when and the how demand for new knowledge (i.e., training) will evolve. Then, being able to quickly organize to make sure, again, the right people and the right knowledge and the right resources are in the right place to accommodate that (anticipated/predicated) demand, anyone, or all of which are often subject to miscalculation, according to Hagel.

The conventional (training) model of course, requires an integrated system, one that we know is increasingly difficult to sustain, especially in the rapidly changing business operating environment in which more companies each day, acknowledge they are a part, and ultimately come to operate.

So, Hagel et al, suggest, for a variety of reasons, many having to do with open source business trends many of which are literally playing out in the world before our very eyes, e.g., the ability to accurately predict and/or forecast the need and demand for knowledge. The timeliness and accuracy of such predictions has become more challenging and subject to miscalculation as we have already suggested. Thus, there is a genuine need for companies to think about those ‘pull platforms’ which can allow them to (again) draw-pull out the right people and the right resources wherever and wherever they’re needed, but quickly, to reflect-accommodate, not solely the need, but the rapid pace that indeed has become the norm for a significant percentage of companies.

In a ‘pull platform’, as articulated by Hagel and his colleagues, the internal development of talent, knowledge, and expertise emphasizes, or perhaps depends upon…
• on-the-job learning and informal (learning) structures
• rather than, a conventionally produced (pre-built) and delivered (formal) training program.

Once again, ‘pull learning’ provides people (employees) with the ability to confront the challenges-problems they’re experiencing rapidly through their ability to draw – pull out the resources needed to design/develop solutions whenever and wherever they’re needed.

Actually then, employee learning is a by-product of (employees) facing unexpected challenges and ever increasing performance requirements, Hagel says. As companies really begin to take the pull strategy seriously, Hagel expresses confidence they will begin re-thinking many of their conventional aspects/elements of operation, e.g., (a.) how the organization is designed, (b.) what kind of business strategy should be pursued, and certainly (c.) what kind of technology platforms are necessary to support the company and their employees in their particular work environment.

In addition to developing learning platforms that enable – facilitate more timely, accommodating, and flexible (employee) learning, moving to a pull mindset requires redefining leadership. In a push world, leadership means developing a program and enlisting others to follow it.

Whereas, in a world of pull world, Hagel claims, it’s about helping people (employees) develop the capabilities to become leaders in their own context, so when they’re confronting an ‘unexpected’ challenge or problem in need of a solution, they possess the initiative and inquisitive disposition that encourages them to embrace that challenge and find creative solutions to overcome it and, in the process learn from that experience.

Hagel said two factors are largely responsible for enabling and supporting the evolution of pull world, (1.) digital technology, and (2.) economic liberalization, i.e., global competition. As is obvious, the continued advancement of technology shows no sign of slowing down, which coincidentally drive more capability but, uncertainty as well, in the process.

Everything accelerates in terms of the pace of change, Hagel points out, while uncertainty (risk) increases, because new participants (players) have more opportunity to literally enter a market space and build scale very quickly, hence a more challenging (business) environment because the basis and intensity of competition can change rapidly.

For further proof of the shift from push to pull, Hagel points to the long-term decline of return on (physical – tangible) assets for public companies in the U.S. Since 1965, return has gone down significantly and there are absolutely no signs this trend will reverse itself in the foreseeable future, a housing bubble it is not! Replacing that of course, as previously stated, is the economic fact that today, increasing percentages (65+%) of most company’s value and sources of revenue evolve directly from intangible (non-physical) assets. For Hagel, this represents ‘a huge red flag’ and all the more reason that the conventional push strategy should be challenged more frequently. But, companies continue to hold on to the practices and institutions associated with the push world even though it’s yielding diminishing performance.

Cultivating (creating) a proprietary library – stock of knowledge in companies today, for example, is bound for failure some argue, including Hagel, because they represent out-of-step practices that essentially keep companies, and their employee’s knowledge and expertise (intangible assets) in a holding pattern, if not a downward trajectory that does not recognize most company’s value and revenue evolve from such intangible assets.

Instead, Hagel asserts, companies should focus on creating effective and efficient knowledge ‘flows’ (the pull world) that allows people/employees not only learn faster as the need arises, but also continually replenish the knowledge stocks, i.e., a company’s internal intellectual – intangible asset libraries.

A glaring reality today, is that many things we come to know, at any point in time, tend to become less useful or perhaps obsolete, given the rapidity of change in both (business) circumstances and conditions, Hagel says. Hagel also claims, if all one does is hold on to what they already know and try to defend that and extract value from it, it’s going to be a losing proposition!
In this kind of environment in which more companies are operating and transacting business, it’s essential, if not critical, to continually seek and find ways to participate in a more diverse and expanding array of knowledge flows. Hagel believes this, and so do I!

Hagel also believes, and so do I, that some of the most profound learning opportunities may not actually occur within a company, rather at the edges of company operations and transactions, e.g., the structural capital found through relationships with partners, stakeholders, distribution channels, and supply chains, etc. In other words, external relationships and structural capital may well be the keys to value, profitability, and sustainability.

So, it may not be solely about (developing) talent within an organization, but, in addition, how a company can connect ‘talent with talent’ wherever it is, and build the relationships (structural capital) where those talented employees are likely to learn faster and better together.

And, I can’t agree more.

This post was dually inspired by the work of Mike Prokopeak in his article in Chief Learning Officer magazine (August 18, 2010) and John Hagel, John Seely Brown, and Land Davison’s book ‘The Power of Pull: How Small Moves, Smartly Made, Can Set Big Things In Motion’.

Intangible Assets: Why SME – SMM Management Teams Are Not Giving Them The Attention They Warrant?

February 23rd, 2010. Published under Analysis and commentary, Intangible asset strategy, Training. 2 Comments.

Michael D. Moberly   February 23, 2010

Intangible assets are embedded in – integral to most every company, regardless of its size or industry sector!  And, presumably, readers of this blog believe the economic fact, like I do, that increasing percentages (65+%) of most company’s value, sources of revenue, ‘building blocks’ for future wealth creation, and sustainability evolve from – are embedded in internally produced and/or (externally) acquired intangible assets.  

But, why is it that significant numbers of SME, SMM, and early stage company management teams’ familiarity with, or even perhaps, interest in intangibles, i.e., (a.) what they are, how they’re produced, where they exist, and the different forms they take in their company, and (b.) how they can be effectively and profitably utilized, leveraged, and exploited, appears to be relatively low?  

What’s this attributable to?  Numerous studies, many referenced in this blog, consistently report senior executives in ‘fortune 1000’ types of companies, consider the management, utilization, and risks to intangibles a priority (top three) issue facing their company.  For various reasons though, again many discussed in this blog, there is little objective evidence and even fewer examples that these consistent, and seemingly convincing findings are (a.) reaching, (b.) resonating, or (c.) prompting SME, SMM, and early stage management – leadership teams and boards to action.

Perhaps, there lies the crux of the problem or challenge that intangible asset (management, monetization, risk, and protection) specialists should focus.   That is formulating a stronger and better articulated repertoire of business (plan) oriented messages directed to SMM, SME, and early stage management-leadership teams and boards, that (a.) bring clarity, (b.) stress universality, and (c.) describe efficient strategies to identify, manage, utilize, and exploit intangible assests, i.e., to actually enhance a company’s value, deliver new sources of revenue, and provide foundations (building blocks) for future wealth creation.  

Also, perhaps, part of the challenge lies in SME, SMM, and early stage management team attitudes toward intangibles.  That is, for many management teams in publicly traded companies, their initial exposure to intangibles was literally thrust upon them, sometimes in near ‘crisis-mode’, to rapidly comply with Sarbanes-Oxley mandates, FASB statements, and/or ISO standards in relatively narrow time frames, which routinely required extraordinary staff time, new procedures, additional resources, and costs.

In most instances, compliance was burdensome and, most respectfully, left little time, inclination, or curiosity to look (explore) beyond the compliance mandates to strategize about the potential benefits and options to utilize and exploit those already identified intangibles to enhance a company’s value, revenue, competitive advantage, and sustainability, etc.

Other reasons that contributed to management team reticence to pursue intangibles beyond meeting SOX, FASB, and ISO compliance minimums, include:

1.  there was no (regulatory) obligation to disclose (share, be particularly transparent with) information about intangibles to shareholders or other external groups. 

2. many managers have limited experience with intangibles and thus retain a tendency to rely on (their) intuition versus seeking and applying objective tools to quantify their contributions, value, and otherwise devise projective (return-on-investment) business plans to justify devoting resources to their utilization and exploitation. 

Intangible Assets: Removing – Unlocking Managerial Mysteries…

January 12th, 2010. Published under Analysis and commentary, Fiduciary Responsibility, Intangible asset strategy, Training. No Comments.

Michael D. Moberly    January 12, 2010      (Part Two of Two Part Post)

There should not be any particular mystery, managerial, or otherwise, about best practices for utilizing-exploiting a company’s intangible assets!  Yes, there is some specialization that is helpful insofar as identifying, unraveling, positioning, leveraging, and maximizing the value of intangibles.  In most instances, that expertise can be readily achieved without the encumbrances of conventional ‘mba’ speak that tends to (a.) favor tangible (physical) assets, and, (b.) be out-of-step with business realities of the knowledge-based (global) economy in which 65+% of most company’s sources of value, drivers of revenue, and building blocks for future wealth creation and sustainability lie in – are directly related to intangible assets and intellectual property (IP).

Some key ‘managerial mysteries’ about intangible assets that must be overcome are:

1. inhibitions (reluctance) to advocate and/or develop strategies to measure – count them in relatively absolute terms.

2. the assets’ lack of physicality, i.e., one knows they exist and recognizes their contributory value and the economic-competitive advantages they deliver, e.g., brand, reputation, image, goodwill, intellectual capital, etc., but one can’t necessarily touch or see those assets in the same manner as physical (tangible) assets, e.g., plants, equipment, inventory, capital, etc.

To further help demystify intangible assets, its important to recognize they exist in three broad categories:

1. Intangible goods and products whose value can be established in the marketplace, e.g., licenses, franchises, patents, trade secrets, and brand value, etc. 

2. Intangible competencies which include distinctive and perhaps proprietary processes and routines, e.g., know how and intellectual capital held and practiced by employees and capable of being created and deployed to the right people at the right time in ways that deliver competitive advantages, value, and bottom-line profits.

3. Latent capabilities which include such things as reputation, image, leadership, innovativeness, and the caliber (capability, capacity) of the workforce to create, identify, and respond to market opportunities to accommodate todays hypercompetitive, aggressive, predatorial, and winner-take-all (global) business transaction environment.

Becoming a more forward looking – forward thinking company through more effective stewardship, oversight, management, and reporting of intangible assets carries some degree of risk, most of which can be mitigated while accruing significant business benefits.

(Perspective on this post was gleaned by Mr. Moberly from long term research conducted by faculty of the Cass Business School, City of London, UK)

Intangible Assets: Removing – Unlocking Managerial Mysteries…

January 11th, 2010. Published under Analysis and commentary, Intangible asset strategy, Training. No Comments.

Michael D. Moberly   January 11, 2009     (Part One of Two Part Post)

Unfortunately, discussions about a company’s intangible assets rarely prompt management teams’ pulse to race as this blog consistently tries to make the case it should.  There are a variety of reasons why management teams representing SME’s (small, medium enterprises) and SMM’s (small, medium multinationals) tend not to attach higher priority to strategies for engaging, utilizing, and building (more) value in their company’s intangibles, many of which have been discussed here in previous posts. 

For some, the subject of intangible assets is shrouded in – veiled by conventional ‘mba’ speak, that sometimes is out-of-step with the realities of global, knowledge-based economies in which 65+% of most company’s sources of value, drivers of revenue, and building blocks for future wealth creation and sustainability lie in – have shifted to intangible assets and intellectual property and away from tangible (physical) assets. 

Intangibles’ lack of (conventional) physicality  has no doubt contributed to some management teams being fretful – uneasy about devoting time to identifying and utilizing intangible assets, notwithstanding the fact that in most instances, they already exist – have been developed/produced by their company.  Again, no doubt, some of that reluctance is attributable to the still much admired Deming (conventional mba) perspective that ‘one can’t manage what one can’t measure’.  In some circles, this long standing tenent of business management has been ‘misinterpreted’ to mean that intangibles, since they lack physicality, can neither be managed or measured effectively.

In other words, because a company’s key assets lack physicality, management teams, at first blush and absent training/orientation, may be less inclined – receptive to recognizing/engaging them as actual or potential sources of value.  In many instances, intangibles merely await management team action, but, because they’re not seeable or touchable in a conventional (Deming) context, their further contributions to (company) value, revenue, and sustainability are left off board room agendas.

For most SME’s and SMM’s, their intangible assets actually exist in a fairly broad spectrum ranging from, (1.) intangible goods and products, (2.) intangible competencies and/or knowledge, and (3.) latent capabilities, each of which will be discussed in the next post.

(Perspective on this post was gleaned by Mr. Moberly from long term research conducted by faculty of the Cass Business School, City of London, UK)

Becoming A ‘Risk Intelligent’ Board…

January 6th, 2010. Published under Analysis and commentary, Fiduciary Responsibility, Training. No Comments.

Michael D. Moberly    January 6, 2010

Generally, I tend to frame business issues and transactions through a broad, but nevertheless, single lens; the lense of risk.  This includes mulling over strategies to mitigate and/or manage those risks, particularly, in my case, risks related to sustaining control, use, ownership, and monitoring value and materiality of a company’s intangible assets and intellectual property (IP). 

Though, in many enterprise risk management equations today, there remain boards that do not share or embrace those perspectives, in part because they bring their own views and experiences about risk to the boardroom which, in my judgment, may be out-of-step with the expanding spectrum of asymetric risks that routinely confront businesses today.  When this occurs in boardrooms, it makes it difficult, absent effective-high level training, for boards to…

1. find a common context to frame and build a strategic concensus for understanding, approaching, and prioritizing risk on behalf of the company

2. design an objective and quantitative framework to benchmark against, i.e., one that does not rely on situation specific and/or subjective anecdotes.

Also, another possible consequence is that ‘risk’ will not become a necessary and routine (action-discussion) item on board agendas.  In fact, a 2008 Deloitte report titled ‘The Risk Intelligent Board’ suggested that a significant percentage of board members conceive-address company risk…

1. solely at an intuitive level

2. by relying (sometimes exclusively) on perspectives expressed by internal risk specialists in combination with a boards’ own risk management committee, and/or

3.  in a narrow manner by focusing on protecting – mitigating risks that can adversely affect company value through existing and presumably, tangible (physical) assets.

While the Deloitte report courteously suggests there is nothing especially wrong with the above perspectives, they do represent the proverbial ‘half a loaf’ approach.  Done correctly, the stewardship, oversight, and management of a company’s risks, at the board level, should include addressing risks in a manner that is aligned with achieving long term strategies. 

Too, by regularly inquiring about – addressing risk in the boardroom, a persistent problem will be confronted and likely diminish, e.g., the tendency for risk management activities to take place in subjective, anecdotal, and isolated silos.

Respectfully, it’s difficult to appreciate why some boards are not attuned to seeking the necessary training to become Deloitte’s version of ‘risk intelligent boards’, especially in light of the economic fact that 65+% of most company’s value, sources of revenue, and foundations for future wealth creation and sustainability lie in – directly evolve from intangible (not physical-tangible) assets!

 

Training Management Teams About Intangible Assets…

July 2nd, 2009. Published under Analysis & Commentary: Studies, Research, White Pap, intangible assets, Training. No Comments.

Michael D. Moberly   July 2, 2009

The challenges associated with getting management teams to be more receptive to intangible assets through training often begins with two phrases, (1.) ‘knowledge-based economy’ which some interpret as being more cliche’ than reality, and (2.) ’65+% of company value and sources of revenue lie in intangible assets’, while factually true, is often assumed to be relevant only to the Fortune 500’s, not SME’s and SMM’s.

Management teams are pragmatists for the most part, who remain appropriately focused on costs and return-on-investment and will likely continue to be dismissive of and/or reluctant to seek training to improve their company’s utilization of intangible assets until the following are aligned:

1. incentives, i.e., sufficient, low risk financial inducements reflective of their particular company, its sector, market, and size…

2. regulatory agency mandates that are consistently enforced, i.e., every company and/or sector competitor is doing it…

3. availability of quality training that will produce economic clarity and sufficient familiarity on the utilization of intangibles to inspire (permit) management teams to independantly conduct their own assessments, i.e., identify, unravel, and develop viable and effective strategies to leverage and exploit (maximize and extract value from) their intangible assets…

It’s well recognized that fulfilling #1 and #2 above requires consensus among the relevant regulatory bodies, as well as adminstrative/legislative action, much of which is already ‘on the books’.  But, intangible asset awareness training for management teams, i.e., #3 is quite independant from #1 and #2 and should not be interpreted as requisites, nor rationales for holding back and not seeking such training. 

An adverse outcome of the status quo however, i.e., low interest in engaging intangible assets, is that significant and unrealized (asset) value will likely be ‘left on every negotiating table’ when intangibles are in play as key components to a transaction.  Another adverse outcome is that those assets ‘left on the negotiating table’ will be readily available for competitors and adversaries to capture, frame to their interests, and exploit for their profit and gain.

In defense of those management teams that are reluctant to engage intangible assets, some may not have the means, internal support-inclination to secure training to turn idle assets into value, revenue, and further enhancing a company’s image, goodwill, reputation, and brand.

 Insofar as fiduciary responsibilities are concerned, forward looking management teams are now obliged to secure intangible asset awareness training on behalf of their boards, stakeholders, and investors.  This training is not merely designed to achieve familiarity, but also the necessary practical confidence to enable effective stewardship, oversight, management, and monitoring of the assets to maximize and extract as much value as possible.  Awareness training is indeed a worthy endeavor for management teams that will produce/deliver many returns and multipliers!