Michael D. Moberly July 26, 2010
Among the regular readers of this blog, there’s probably a commonality many of us share, that is, when we attend/participate in a business meeting, we are inclined to look for the often times invisible, but nevertheless present, ‘900 pound gurerrilla’s’ that are being overlooked, and wonder why?
To be sure, there is a 900 pound economic gurerrilla in most every companies c-suite and board room that unfortunately is often ignored, dismissed, and overlooked, but still plays an increasingly integral role in and lays critical foundations relative to a company’s value, its sources of revenue, sustainability, and future wealth creation. That 900 pound guerrilla I’m referring to of course, are a company’s intangible assets!
Reasons for expressing misgivings about and/or reluctance to really engage a company’s intangible assets are as varied as there are categories and types of intangibles. Typically though, there remain a significant percentage of management teams and boards who, when they think about (company) assets, their inclination is to see primarily physical, or tangible assets such as property, equipment, real estate, accounts receivable, and perhaps various types of securities. Presumably, those boards and management teams believe these so-called hard assets, i.e., ones that can be seen, touched, and are entered on company balance sheets, are the ones that really matter, and therefore remain, at least in their eyes, as the dominant (primary) means that drive and deliver company value and revenue.
Of course, the business realities and economic facts flowing from the knowledge (intangible asset) based global economies clearly convey something quite different, that is, 65+% of most company’s value, sources of revenue, and future wealth creation today lie in – evolve directly from intangible assets, not tangible assets.
So, while my conversations with a cross section of management teams and boards, particularly in the small and mid-sized company arenas, reveal a general familiarity with intangibles, there’s little objective evidence, below the surface, that indicates there’s a deeper appreciation how intangibles have literally become embedded and integral to most company’s routine (business) operations, processes, and procedures insofar as they individually and collectively contribute to elevating (company) value, deliver competitive advantages, and serve a key sources/contributors to revenue.
There is another, very timely and relevant, explanation why some management teams and boards are not as receptive as they should (could) be relative to learning more about and seeking opportunities to more effectively utilize, exploit, and convert their companies intangibles into value and sources of revenue. That explanation is, as the saying goes, ‘when you’re up to your hips in alligators, one may have forgotten the original goal was to drain the pond’.
So, I hear some management teams and boards say ‘please don’t bother us with theoretical discussions about why we should pay more attention to intangible assets when our company ‘is up to its hips in alligators’ and fighting everyday for its financial survival, ala, the recession.
To that I say, intangible assets are not some theoretical concept. They’re real, integral, and irreversible foundations to the knowledge (intangible asset) based global economies. And, albeit I am a strong advocate of intangibles, now may be the perfect, perhaps even the best time for management teams and boards to seriously dig into the intangible assets their company is producing or has acquired and figure out how those assets can better serve their company versus remaining stagnant, un-exploited, and otherwide not delivering – producing their potential.
The ‘Business IP and Intangible Asset Blog’ is researched, written, and produced by Mr. Moberly to provide insights and additional and sometimes alternative 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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