Michael D. Moberly December 17, 2008
Why would it be a good idea now for companies to seriously consider devoting (minimal) time, resources, and committment to developing a culture that recognizes, produces, and sustains control, use, ownership, and value of (their) intangible assets? Perhaps the biggest reason is because today, its an economic fact that 75+% of most company’s value, sources of revenue, and future wealth creation lie in – are directly linked to intangible assets!
Why then, given this ‘business reality’, would there be decision maker resistance to putting forth that time, those resources, and the committment to building an internal (company) culture to achieve this end? For starters, here are four truthful, but increasingly less prudent reasons, i.e., intangible assets (1.) lack physicality, (2.) don’t appear on balance sheets, (3.) tend to fall outside conventional ‘mba’ precepts, and (4.) require ‘outside-the-box’ strategies to monetize and extract value!
One of my goals-objectives when serving clients is to, among other things, lay a foundation for building a company culture that builds upon Dr. Edgar Schein’s work in which he suggests a company culture begins with ‘shared assumptions that employee’s learn while solving (internal) problems’. Standing alone, Dr. Shein’s point sounds very academic for the real world of globally operating companies and business transactions. But, when decision makers factor 75+% of (their) company value, revenue, and future sustainability likely lie in intangibles, one could rightfully conclude that devoting that minimal time, resources, and committment to building such a culture would be an exercise that would not only deliver favorable results, but, equally important, likely produce additional intangible assets that would, in turn, contribute to (company) value, revenue, and sustainability.
But, how would decision makers know when their efforts for building such a culture would actually produce the intended results, i.e., a fully functioning (intangible asset) company culture? According to Dr. Schein’s work it would be evident at the point in which ’employees (are observed) expressing (manifesting) it as being valid and worthy enough to be taught to new employees as the correct way to perceive, think, and feel in relation to (addressing) persistent challenges and problems they and the company face’. So, when 75+% of most company’s value and revenue evolve from intangible assets, it would be prudent – make good business sense to assume that a significant percentage of those ‘persistent challenges and problems companies face’ are, in fact, variously related to their intangible assets.
So, what’s a bottom line to building a company culture that recognizes, produces, and sustains control, use, ownership, and value of intangible assets? It’s a shared and linked (enterprise wide) set of characteristics, beliefs, assumptions, and behaviors about intangible assets, i.e., (1.) they’re real, credible, and convertible sources of value, revenue, and future sustainability, and (2.) should guide – underlie decisions, actions, and strategic planning!