Michael D. Moberly March 27, 2014 ‘A long form blog committed to elevating awareness about intangible assets and where attention span really matters’.
As readers know well, it is an economic fact that intangible assets collectively represent 80+% of most company’s value, sources of revenue, as well as serve as ‘building blocks’ for growth, profitability, and sustainability. It’s certainly not much of a leap in thinking then to recognize that key factors to effectively manage each of the above lies in company decision makers’ ability and commitment to…
- protect, preserve, (sustain), profitably utilize, and monitor any fluctuations in the assets’ ‘contributory value’ which is variously dependant on
- identify, prevent, and/or mitigate current and horizonal risks – threats which if – when they materialize, will, with little doubt, impair company growth, profitability, reputation, competitive advantage, and strategic planning.
In my view, one, if not the very first thing company decision makers should recognize is that, unlike patents, trademarks, or copyrights, which are conventional forms of intellectual property enforcement, there is nothing comparable issued by the government, or otherwise that says, ‘these are your intangible assets’. Doing so, is entirely the (fiduciary) responsibility of company management teams, that is, to acquire that know how independently or secure the services of an intangible asset strategist and risk specialist for strategic counsel and training.
Position business decision making to include the following…
- shift knowledge-based (intangible) assets away from being conceived and engaged as predominantly legal functions and/or processes to business management – decision functions and processes.
- align intangibles with economic, financial, and risk management planning, core business strategies, specific transactions, and the assets’ value – life – functionality cycle
- avoid costly and time consuming challenges over control, use, and/or ownership of their intangibles including misappropriation, infringement, and counterfeiting and other vulnerabilities that can lead to asset compromise and/or undermining.
- counter the expanding global risks and threats which when materialized, impede business momentum, delay or undermine transactions, competitive advantages, and erode asset value and performance.
Objective: bring managerial, business, strategic, and economic clarity to under-the-radar intangibles, i.e.,
- find’em, unravel’em, protect’em, preserve’em, defend’em, monitor’em, and enhance’em…
- the stewardship, oversight, and management of intangible assets
- monitor their value, risks, threats, and materiality
Distinguish intangible asset value…
- objective vs subjective value
- what’s the difference, why it’s important, and how can it be applied
Valuation of intangibles must be much more than mere snap-shots-in-time…
- business worth model
- market approach
- income approach
- cost approach – substitutions
Recognize circumstances in which intangible asset value can/will fluctuate…
- developmental and/or operational stage (value)
- market value
- industry (consumer) cycles
Recognize intangible asset value can be instantly undermined by…
- premature disclosure, leakage, misappropriation, theft
- entanglements and challenges over origin, control, use, and/or ownership
- global business intelligence and data mining
- counterfeiting, economic espionage
Recognize ‘rules’ for sustaining profitability and defensibility of intangible assets…
- don’t assume no one is interested in the know how you’re producing
- do assume your know how will be consistently targeted beginning at the earliest stages of its development and throughout its life – value cycle
- do develop ‘best practices’ to protect, preserve, and monitor its value
Reader comments and inquires are always welcome at 314-440-3593 (St. Louis) or m.moberly@kpstrat.com
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