Michael D. Moberly June 23, 2009
All too frequently the contributions and competitive advantages intangible assets deliver to a company are overlooked, neglected, or outright dismissed. There are a variety of reasons for this, the larger one probably being their lack of physicality which presents management teams with challenges insofar as measuring their performance and value and fitting them on company balance sheets.
In most instances though, a company’s intangible assets are akin to the proverbial ‘can’t see the forest for the trees’. That is, while they’re often openly embedded in routine operations, processes, and functions, they frequently fall under the conventional ‘mba’ radar that tends to focus on tangible-physical assets.
Familiarity though, with a company’s intangible assets, will contribute to producing numerous multiplier effects and risk mitigators, five of which are…
1. Adding predictabiliy to business transaction outcomes when intangible assets and IP are in play by recognizing (assessing) such factors as asset stability, fragility, sustainability, and defensibility which, in turn, elevates the probability for sustaining their control, use, ownership, and value pre – post transaction.
2. Reducing the vulnerability and criticality to costly, time consuming, and momentum stifling legal challenges and/or disputes by recognizing circumstances early that can ensnare or entangle the assets in ways that will impede, erode, or undermine their value, competitive advantages, and/or performance.
3. Providing a foundation for more effective use of intangibles through synergies with knowledge management programs, the balanced scorecard approach, and reporting and valuation mandates in Sarbanes-Oxley and FASB 141, 142.
4. Building a ‘company culture’ focused on producing and sustaining its intangibles and providing timely recognition about their use, performance, ownership, and value.
5. Developing more effective business continuity – contingency plans by including a company’s intangible assets to achieve stronger and quicker recovery strategies following a significant business disruption and/or natural disaster.