Michael D. Moberly July 10, 2008
A company’s strategy for extracting value from its intangible assets and IP has little, if anything to do with its size! Afterall, numerous respected studies consistently find that 75+% of most companies’ value, sources of revenue and future wealth creation lie in intangibles, IP, competitive advantages, and know how and none, to my knowledge, distinguish that percentage (of value) by a companies’ size, e.g.,
1. intangible assets, IP, competitive advantages, and know how are not concepts or terms applicable only to larger, Fortune 500 types of companies. Instead, they have special relevance to small and medium size firms that literally comprise the backbone of most every Chamber of Commerce and Rotary Club in the U.S.
2. the stewardship, oversight, and management of those assets are no longer discretionary functions, rather fiduciary responsibilities which must translate into routine action items on D&O agendas for every size firm from start-up to maturing companies.
3. the manner in which those assets are handled and treated have both tactical as well as strategic business (decision) applications which means they’re not solely a legal process that’s often mis-characterized as being much more complex that it really is (see previous July post titled ‘What Are Intangible Assets’).
I find with greater frequency, business decison makers are more receptive to acknowledging their intangible assets. I also find that, with minimal orientation, (i.e., training, coaching, etc.) they quickly arrive at ‘uh ah’ moments on behalf of their company. This is especially true in terms of the returns they find from devoting time to identifying, unraveling, and assessing the intangibles that their firm has (a.) already amassed and/or (b.) still routinely produces in the form of (proprietary) know how and competitive advantages.
Who knows their firm better and what it ‘produces’ than its own managers and decision makers? It merely requires a slightly different orientation for looking beyond merely tangible (physical) outputs to the outputs of intangibles.
Such receptivity and acknowledgement can quickly evolve into the next stage for utilizing, maximizing, and extracting value from intangibles which entails aligning a company’s intangible assets and IP strategy with its business strategy.
Alignment, in this instance, does not mean a one-shot-occurrence, rather it must constitute:
1. a consistent, and preferably, permanent practice of ensuring intangibles, IP, know how, and competitive advantages, etc., are routine and enterprise wide considerations, not afterthoughts. The alignment process also involves:
2. describing real and practical paths, options, and strategies (that fit best for their firm, their culture, their circumstances, their strategic plan, and their capitalization etc.) to better utilize and extract as much value as possible from their assets.
However, an important ‘bottom line’ to decisions makers’ receptivity, and this exercise is those companies that lack either the willingness or ability to:
1. sustain (protect, preserve) control, use, ownership, and monitor the value of those (their) assets, and
2. consistently practice effective stewardship, oversight, and management of those assets
…will not likely experience the outcomes or returns that are so frequently at ‘arms reach’!