Michael D. Moberly September 15, 2009
Strategic planning is about articulating (communicating) a clear, practical, and collaborative vision about where a company ‘wants to be’ at some point in the future. The actual strategic plan describes specific ‘action steps’ necessary to achieve that vision, e.g., an assessment of the resources (human, capital, material, etc.) necessary to execute the plan.
It’s an economic fact – business reality today however, that 65+% of most company’s value, sources of revenue, sustainability, and foundations for future growth, expansion, and wealth creation lie in – are directly related to intangible assets. Thus, strategic planners would be remiss if they overlooked the contributions intangible assets make to realizing the success and effectiveness of a company’s – organizations’ future. Not factoring the contributions of intangibles into a strategic plan would leave significant gaps in the strategic planning and would likely hinder, if not totally derail the plan’s projected success and effectiveness.
The importance of factoring intangible assets in strategic planning has been elevated in part because of the emphasis placed on intangibles in Sarbanes-Oxley and FASB (nationally) and their international equivilents relative to accounting and reporting (the assets’) value and materiality changes.
An increasingly relevant prelude to strategic planning is conducting an intangible asset assessment, the purpose of which is to (1.) identify, unravel, value, and assess the stability, sustainability, and defensibility of a company’s intangibles, (2.) bring strategic (business) clarity to those intangibles insofar as their creation, utilization, positioning, leveraging, and ways to extract value, (3.) ensure control, use, ownership and value of the intangibles can be sustained relative to the the strategic plans’ term, and (4.) examine the assets’ relevance/contribution to other (company) transactions, i.e., joint ventures, strategic alliances, mergers and acquisitions, etc.
Intangible asset assessments are necessary elements to strategic planning because, (1.) unlike patents, trademarks, or copyrights, there is no certificate issued by the government that says, these are your intangible assets, competitive advantages, intellectual capital, brand, reputation, image, and goodwill, etc., and (2.) intangibles are often embedded in a company’s routine operations, processes, and functions. Identifying and assessing intangibles thus falls exclusively to management teams and specialists in intangible asset management.
So, what are intangible assets?, they’re blends or combinations of procedures, relationships, or culture, etc., embedded in a company’s distinctive and often times proprietary processes or practices that (a.)create efficiencies, (b.) facilitate/enhance internal – external relationships, (c.) provide special edges/advantages in the market place, and/or (d.) can be leveraged to differentiate a company from its competitors, and thus create value.