Michael D. Moberly April 9, 2012
I am quite confident that devoting time and resources to developing a durable and resilient company culture focused on intangible assets can deliver some impressive returns. By durable, I mean circumstances in which employees, business units, and c-suites collectively recognize, respect, and are committed to building – acquiring a necessary base of intangible assets. This also includes all parties acquiring a current familiarity with intangibles to assume a level of responsibility toward intangible assets commensurate with their position that contribute to sustaining control, use, ownership of the assets and monitoring their value and materiality.
In the words of Dr. Edgar Schein, an organizational (company) culture consists of three progressive stages:
1st – there is a shared recognition – assumption that employee’s at all levels learn while solving problems…and, if those assumptions work well enough…
2d – employees will come to consider them valid and worthy of being taught and passed along to new employees, because…
3d – they represent the correct way to perceive, think, and feel in relation to addressing (internal, external) problems that their company routinely faces.
So, why is it important and what are the potential benefits that can accrue to a company by endeavoring to build a company culture focused on intangible assets…
First…65+% of most company’s value, sources of revenue, and building blocks for growth and sustainability evolve directly from intangible assets.
Second…a company culture focused on intangible assets can serve as an excellent vehicle to raise enterprise wide awareness about the most important and quite possibly, the real sources of company value and revenue.
Third…an intangible asset focused company culture can serve as a catalyst for internalizing incentives and identifying strategies to more effectively exploit and monetize intangibles assets.
Fourth…companies and their management teams and stakeholders must recognize the economic reality that there’s been a permanent and irreversible shift in company’s primary sources of value, revenue, growth, and sustainability, that is, from tangible (physical) assets to intangible (non-physical) assets!
A company’s initial step for developing a culture that’s focused on intangible assets involves determining…
What…attitudes and beliefs need to be established among employees and stakeholders that lend themselves to not just appreciating the role and contributory value of intangibles, but also internalizing the absolute necessity to sustain their control, use, ownership, and monitor their contributory value and materiality to the company.
How…those attitudes and beliefs will be translated by employees and stakeholders and ultimately become embedded themselves in employee, business unit, and c-suite behavior, i.e., having relevant procedures, policies, and practices in place to provide consistent and effective stewardship, management, and oversight of the intangibles.
Matthew Bunn and Anthony Wier point out that a ‘good corporate culture is comprised of 20% equipment and 80% people’ which I’m in general agreement. That said, it’s vitally important to recognize that even the best practices, policies, procedures, regulations, and standards cannot compensate for any apathy and/or dismissiveness regarding the relevance and contributory value of intangible assets insofar as successfully competing in this knowledge-based global economy.
Too, as thoughtfully pointed out by Dr. Kenan Jarboe in his Athena Alliance monograph appropriately titled ‘Intangible Asset Monetization: The Promise and the Reality’, there are six factors considered by financial markets (and presumably asset buyers and sellers as well) with respect to determining the ‘suitability’ of an asset. One of those factors is an assets’ transferability. For example, is a ‘company’s culture’ so specific that it cannot be replicated or sustained through a market change or significant economic downturn?
Now those are important questions to know and ask!
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