Michael D. Moberly June 21, 2010
In 2010, and for the foreseeable future, risk management must be about the interdependancy of companies intangible assets. In the not too distant past, companies often had the twin luxuries of time and (geographical) space when dealing with risks-threats that materialized. Time and space served as ‘buffers’ for companies that routinely provided leeway insofar as how a company may elect to react (adapt) to the risk-threat at hand. To be sure, in 2010, such luxuries no longer exist!
In previous years, it was not always essential, nor expected, broadly speaking, for risk managers to have specific and individualized contingency-action plans in place to deal with each potential risk-threat that could possibly materialize. Of course, there were many reasons (rationales) for this, among them being, risks-threats, when they did materialize, were less interdependant. In other words, risks-threats could often times be compartmentalized or segregated, thereby mitigating the probability that adverse affects/consequence could literally ripple through an entire organization.
Also, conventional risk management tended to be focused on protecing a company’s tangible – physical assets through insurance, i.e., risk transfer, in which pieces of a companies tangible assets would be insured vs. adopting a holistic perspective that included recognizing the highly interdependant nature and contributory value of intangible assets.
But today, with 65+% of most company’s value and revenue being directly tied to intangible assets, it’s the interdependancy of a company’s intangibles, and the potential for almost instantaneous cascading affects, i.e., economic and competitive advantage hemorrhaging and undermining of asset value, etc., that must form the managerial criteria (starting point) for genuinely managing the varied and assymetric nature of company risk.
(This post was inspired by ‘Surviving and Thriving in Uncertainty, Creating the Risk Intelligent Enterprise by F. Funston and S. Wagner)
The ‘Business IP and Intangible Asset Blog’ is researched and written by Mr. Moberly to provide insights and additional views for company management teams, boards, and employees to aid in identifying, assessing, valuing, protecting, and profiting from their intangible assets. I welcome and respect your comments and perspectives at m.moberly@kpstrat.com.
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