Michael D. Moberly January 11, 2009 (Part One of Two Part Post)
Unfortunately, discussions about a company’s intangible assets rarely prompt management teams’ pulse to race as this blog consistently tries to make the case it should. There are a variety of reasons why management teams representing SME’s (small, medium enterprises) and SMM’s (small, medium multinationals) tend not to attach higher priority to strategies for engaging, utilizing, and building (more) value in their company’s intangibles, many of which have been discussed here in previous posts.
For some, the subject of intangible assets is shrouded in – veiled by conventional ‘mba’ speak, that sometimes is out-of-step with the realities of global, knowledge-based economies in which 65+% of most company’s sources of value, drivers of revenue, and building blocks for future wealth creation and sustainability lie in – have shifted to intangible assets and intellectual property and away from tangible (physical) assets.
Intangibles’ lack of (conventional) physicality has no doubt contributed to some management teams being fretful – uneasy about devoting time to identifying and utilizing intangible assets, notwithstanding the fact that in most instances, they already exist – have been developed/produced by their company. Again, no doubt, some of that reluctance is attributable to the still much admired Deming (conventional mba) perspective that ‘one can’t manage what one can’t measure’. In some circles, this long standing tenent of business management has been ‘misinterpreted’ to mean that intangibles, since they lack physicality, can neither be managed or measured effectively.
In other words, because a company’s key assets lack physicality, management teams, at first blush and absent training/orientation, may be less inclined – receptive to recognizing/engaging them as actual or potential sources of value. In many instances, intangibles merely await management team action, but, because they’re not seeable or touchable in a conventional (Deming) context, their further contributions to (company) value, revenue, and sustainability are left off board room agendas.
For most SME’s and SMM’s, their intangible assets actually exist in a fairly broad spectrum ranging from, (1.) intangible goods and products, (2.) intangible competencies and/or knowledge, and (3.) latent capabilities, each of which will be discussed in the next post.
(Perspective on this post was gleaned by Mr. Moberly from long term research conducted by faculty of the Cass Business School, City of London, UK)