Michael D. Moberly December 31. 2012
Recognizing how and strategizing where and when intangibles ‘fit’ in a company’s 2013 strategic business plan is a New Year’s resolution that will almost guarantee efficiencies, profitability, and sustainability! But first, we must agree at the outset, that, globally speaking, 65+% of most company’s value, sources of revenue, and building blocks for growth, sustainability, and profitability today either lie in or evolve directly from intangible assets!
That’s an economic fact – business reality that no, heretofore reluctant, reticent, or dismissive management team, c-suite, or board should needlessly squander any time debating or arguing, rather, just press forward with the knowledge that if executed correctly will, not may, produce impressive strategic outcomes, i.e., competitive advantages, more secure and profitable transactions, and equally important, extend a companies’ sustainability.
Far too often, this economic fact – business reality is dismissed and/or disregarded by management teams who either lack understanding, harbor misgivings, or simply don’t possess the necessary interest to unravel the embedded and sometimes camouflaged benefits and multipliers that well nurtured intangibles can consistently deliver for a company and the various transactions undertaken and/or engaged. One rationale is that a percentage of management teams, c-suites, and boards, are quick to dismiss intangibles as being (too) esoteric, or worse, somehow irrelevant to their company, the nature of its business, and it strategic positioning.
Any unfamiliarity and/or uneasiness among some management teams, c-suites, and stakeholders about what intangible assets are, how to identify them, and assess their contributory value, and then utilize and/or extract value (from them) efficiently and profitability can and should be overcome.
An initial step is designing and executing the proverbial, but always essential business case (rationale), which, for intangible assets, require some intellectual capital to design and integrate an enterprise-wide (intangible asset) awareness campaign that include…
- developing congenial asset identification, stewardship, management, and oversight practices
- sustaining control, use, ownership, and monitoring value, materiality, risk, and assess asset performance.
Each component above represents an essential element to achieving success as measured by elevated profitability, growth, and sustainability.
Those possessing the requisite fortitude and business acumen already know that designing and executing a company-wide initiative will inevitably present its own set of challenges, in this instance, the reality that intangible assets that…
- lack physicality, and
- seldom, if ever, are accounted for – reported on company balance sheet or financial statement.
The following represent (some) key factors which I personally recommend, that management teams, c-suites, boards, and relevant stakeholders should fully consider when conceiving and designing the necessary business case for making their intangible assets an integral part of their business routine and strategic planning and positioning…
- Bring operational clarity to intangible assets through a repertoire of relevant examples applicable to a variety of industries and sectors in terms of not just their value, rather their contributory value…
- Draw attention to the importance of practicing consistent stewardship, oversight, and management of intangible assets, framed as fiduciary responsibilities, not merely as additional or unnecessary tasks…
- Describe how and why it’s necessary to not just identify intangibles, but unravel their origin, evolution, nurturing, ownership, control, defensibility, sustainability, and contributory value…
- Incorporate best practices for sustaining control, use, ownership, and monitoring value, materiality, and risks to the assets, why each it’s necessary and who the adversaries are likely to be in addition to – other than sector competitors…
- Articulate (intangible) asset valuation, contributory value, revenue conversion, and performance measure in understandable (plausible) ‘economics 101? contexts…
- Describe how to determine asset ‘suitability and contributory fit’ to particular initiatives, projects, and/or transactions relative to their transferability, life/value cycle, and risks, and retaining/transferring ownership rights…
- Demonstrate relationships between the production (acquisition) and use of intangibles relative to how they produce multiplier-effects, add company value, and deliver competitive advantages, sources of revenue and specific contributory value…
- Describe ways to position and/or bundle particular assets (when/if feasible) to achieve broader leveragability, competitive advantages, and value potential…
- Avoid reliance on subjective – worst case scenario anecdotes or tactic to convey (asset) risks and threats as a tool to attract attention…
My blog posts are researched and written with the intent they serve as a venue to elevate awareness and appreciation throughout the the global business community for the identification, use, contributory value, and measuring performance of many forms of intangible assets. My blog posts are not intended to be either quick sound bytes or merely commentary or references to other existing blogs. Comments regarding my blog posts are encouraged and respected. Should any reader elect to utilize all or a portion of any of my posts, attribution is expected and always appreciated. While visiting my blog readers are also encouraged to browse other topics (posts) which may be relevant to their circumstance or transaction. And, I always welcome your inquiry at 314-440-3593 or [email protected].
