Michael D. Moberly June 26, 2014 ‘A long form blog where attention span really matters’.
So, why are these intangible assets being targeted by economic – competitive advantage adversaries…?
Respectfully, let me re-draw readers’ attention to the various examples of intangible assets previously described (identified) and the fact that intellectual property are merely one type/category of intangible asset, albeit a prominent one.
So, why are intangible assets being targeted by global economic – competitive advantage adversaries?There are, in my judgment, multiple reasons why, which I’m confident experienced reader practitioners will find agreement, i.e.,
- to appropriate the words of the 1970’s bank robber Willie Sutton, it’s because intangible assets are where 80+% of most company’s value, competitive advantages, and profitability originate and are ‘deposited’.
- most intangible assets, once stolen, compromised, or infringed, can be used – applied in competing products and/or services as well as having the potential for being converted for use in unrelated products or services, in other words, they are often readily monetizable or comercializable, in the right hands.
- there is a consistent and often global demand for one or multiple intangible assets like those described above, a demand which is relatively barrier free insofar as having numerous market entry points globally where intangible assets can be sold, bartered, exchanged, or melded into competing or other products or services, etc.
Role of corporate security…
A professional acquaintance, Mr. Greg Acton, served as Director of Global Security for a major telecom – consumer electronics’ company in California. The company had invested heavily in R&D over a period of 12 to 18 months on new and perhaps ‘game changing’ technologies to be incorporated into its long time staple, globally branded, and primary consumer product.
Upon embarking on this initiative, the company’s stock price was experiencing a consistent downward spiral, which, in many respects was due largely to numerous new and well financed competitors entering the market space coupled with the sense that this company’s product had not kept pace with newer, multi-functional technologies which consumers were readily embracing in other brands.
Without over dramatizing the circumstance, there was indeed a demoralizing sense of product – technology stagnation regarding the company’s staple product and the overall brand.
As is prudent with many electronics – telecom firms, this company had timed its R&D and product launch to coincide with the annual consumer electronics show in Las Vegas. This company, as many before it, believed a key to the success of a product’s launch, financially as well as regaining consumer confidence in its product, and by extension its brand, lie in part, in retaining a consumer teasing level of secrecy shrouded around its new product, which as readers recognize is quite common in this sector and perhaps perfected by Steve Jobs and Apple.
The tactical and strategic intent of this shroud of secrecy would be to secure domination, albeit perhaps fleeting, of the electronics show’s dynamics, coupled with the immediate commencement of a strong marketing blitz designed to breathe new and sustainable life into the company, its brand, and its products.
In this, as in many other similar circumstances, this company’s, Mr. Acton played a very significant role insofar as assuming substantial responsibilities for ensuring the company’s new product, it’s planning, technology supply chain, and prototypes literally remained devoid of any leakage throughout the almost two years of R&D and testing phases up to the precisely scheduled time and date of its well hyped public offering at the consumer electronics show.
In this instance, Mr. Acton, clearly a seasoned and well respected ‘silicon valley’ veteran understood the significance of his responsibilities to this product launch along with the extraordinary value of the numerous and contributing intangible assets, all of which would be in play, particularly, the company’s reputation, image, and consumer goodwill.
As I’m confident readers understand, the intangibles which Mr. Acton recognized and effectively oversaw and safeguarded throughout this 20+ month product development and testing period were conservatively worth multiple millions of dollars in potential sales to the company in addition to rejuvenating its reputation, market share, as well as favorably affecting the value of the company as a whole.
Had there been inadvertent or purposeful public leakage by an economic and/or competitive advantage adversary (internally, externally) about this product and its launch in advance of the consumer electronics show, it would have, among other things, allowed ample time for the ever present array of global technology critics and competing firms to mount consumer directed offensives against the product intended to minimize and/or undermine its improvements and consumer ‘likeability’, etc.
Much to the credit of Mr. Acton, there were absolutely no known advance (adverse) leakages. What’s more, the stock price of this publicly traded company shot up 312% by the close of business on the day of its highly public launch at the consumer electronics show. Another metric worth noting is that in addition to the aforementioned stock price gain, the company’s vice president of marketing informed Mr. Acton that the company had spent $1M on marketing the lead up and public announcement. In return for sustaining the product proprietary status, the company received an estimated fifty times that amount in product advertising, at no cost to the company, through the various and globally connected media portals in place at the consumer electronics show.
So what was the contributory value of this CSO’s commitment to ‘no leakage’…?
Perhaps first, and foremost, it laid the essential foundations for the company to fully capitalize and otherwise exploit its presence at the consumer electronics show which very rapidly converted to stock analysts and stock market share price favorables.
So, is this sufficient rationale for not only inviting, but ensuring CSO’s and other relevant security personnel are comfortably seated, with a voice, at the proverbial R&D table from the outset of an initiative, I believe it is!
CSO’s, in a new role as intangible asset strategist and risk specialist, working collaboratively and in unison with a company’s internal and/or external R&D unit and relevant and various supply chains, are uniquely positioned to recognize and differentiate the more valuable and competitive advantage driving elements of promising research. One way is by virtue of their proximity to and operational familiarity with the global expansion of economic and competitive advantage adversaries which are consistently motivated by nation state mandates or monetary remuneration to acquire other entities’ valuable intangible assets.
But what makes a CSO’s voice heard and duly considered…?
Again, first and probably foremost, are CSO’s receptivity to recognizing the relevance and importance of elevating their existing skill sets to acquiring an operational familiarity with their company’s intangible assets. In other words, acquire a level of operational proficiency with intangibles that provides CSO’s with the professional comfort associated with becoming an intangible asset strategist and risk specialist!
Straightforwardly, that would entail recognizing the strategic importance and necessity to develop and respectfully execute ‘under the radar’ practices and processes, all of which are designed to sustain control, use, ownership and monitor the value, materiality, and risk to select intangible assets, distinguished as having the most promising contributory value to a specific or multiple (on-going) proprietary (R&D) initiatives and/or projects along with the array of business transactions a company may regularly engage in which intangible are routinely in play.
This would include conducting (intangible asset) due diligence for such transactions as a merger, acquisition, strategic alliance, or other business activities in which intangible assets are routinely in play and integral to the favorable outcome of a deal.
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