Michael D. Moberly December 18, 2008
It’s an economic fact today that 65+% of most company’s value, sources of revenue, and future sustainability lie in – are directly linked to intangible assets! The key takeaway from this (for management teams) is that, while its important to know what intangible assets are and ‘which one’s your company has’, it’s equally important now to (a.) know precisely how those (intangible) assets contribute to value, revenue, and sustainability, (b.) understand how to leverage-position those assets to maximize their value and then extract value, and (c.) effective (best practice) stewardship, oversight, and management techniques.
Familiarity with intangible assets can deliver lucrative – competitive advantage multiplers, for example:
1. Add predictability to business transaction when intangible assets are in play…by assessing the stability, fragility, defensibility, and sustainability of the assets (due diligence). It also elevates the probability for achieving projected returns, sustaining competitive advantages, and contributes to recognizing (facilitating) asset synergies – efficiencies and affirming projected exit strategies.
2. Reduce probability of costly, time consuming, momentum stifling legal challenges…by recognizing circumstances that can ensnare and/or entangle (intangible) assets to impede, erode, or undermine deal value, competitive advantages, and/or projected performance.
3. More effective convergence of accounting, reporting, and valuing assets…by providing portals to (a.) knowledge management programs, (b.) intellectual property development and enforcement, (c.) Sarbanes-Oxley and FASB, and (d.) the balanced scorecard.
4. Build an ‘intangible asset’ company culture…that (a.) recognizes, produces, and sustains control, use, ownership, and value of intangibles, and (b.) provides more timely awareness and pursuit of asset rights issues, i.e., ownership, value, infringement, misappropriation, theft, etc.
5. Develop more comprehensive business continuity-contingency plan…that encompassess all forms/contexts of intangible assets to produce stronger and quicker recovery following significant business disruptions and/or disasters.