Michael D. Moberly June 5, 2017 email@example.com ‘A business intangible asset blog where attention span really matters’.
Your Company’s Intangible Assets, Don’t Dismiss Them Before You Read This
Based on numerous client engagements and countless detailed conversations about the relevance of intangible assets with business owners, leadership, management teams, investors, and entrepreneurs, I have concluded that, in a significant percentage of circumstances in which there is acknowledged underperformance it is variously related to challenges insofar as distinguishing and converting the contributory role and value of IA’s (intangible assets) to sources of revenue and competitive advantage for every initiative, process, and/or transaction undertaken.
Underlying these challenges is the irrefutable and irreversible economic fact that 80+% of most business’s value, sources of revenue, competitiveness, future wealth creation, reputation, brand, and sustainability today, lie in – emerge directly from intangible assets.
Unfortunately, a percentage of business leaders and management teams, for various reasons, are…
• dismissive of this economic fact and instead convey contentment with
the status quo which typically translates as continuation of time-
honored convention and past practice.
• operationally unfamiliar with the rapid expansion of IA intensive and
dependent firms and instead, interpret IA intensity and dependency as
theoretical embellishments, rather than factual business realities.
It is here that I introduce IA business strategists to Alan Alda’s newly published book titled ‘If I Understood You, Would I Have This Look on My Face?’, which I have taken the liberty of applying here. Alda introduces his book with various scenarios having to do with ‘communicating for understanding and action’, e.g.,
• medical patients not understanding their doctor’s orders sufficiently
to follow them.
• a state’s flood mitigation and dam engineers are unable to convince
relevant authorities to dedicate resources to reinforce-repair a dam
with a high probability-risk of breach.
• parents are unable to develop sufficient trust with their teenage son
and daughter to mitigate the probability one or both will engage in
taking-using illegal (addictive) drugs.
In each instance, if the recipient of the information does not understand, is unreceptive to the cautionary forewarning or taking pre-emptive (mitigating) action, adverse outcomes are likely to materialize.
Admittedly, on several occasions and at various stages of client engagement (on IA matters) I have sensed my counsel being variously discounted. Respectful follow-up discussions with clients often reveal they have construed the intellectual-managerial task of achieving operational level familiarity with their IA’s and work toward developing a business unit and/or company-wide IA intelligent culture exceeds immediate preference to retain much of the status quo. In practical terms, this often translates as applying only the aspects of IA management which they deem the most essential without distinguishing good, better, best.
The importance of bringing operational relevance and clarity to managing companies-business’s through IA’s lens, is apparent from a conversation which I had the pleasure to be engaged several years ago. I was standing near the tarmac in the early morning hours of a chilly spring day with a senior executive of a global air freight company. From our vantage point, we could readily observe ‘as far as our vision would allow’, what I would characterize as, nothing short of…
…a highly choreographed convergence of activities wherein cargo jets were
landing, taxiing, unloading, re-fueling, changing crews, loading and preparing for on-time departure to strategic ‘hubs’ globally.
While I and the executive observed these highly orchestrated activities occurring before us, I turned to the executive and remarked that…
…through my lens, I was observing what amounted to billions of dollars of
of repeatedly – continuously tweaked intangible assets, i.e., intellectual,
structural, and relationship capital which seemingly were converging
seamlessly, efficiently, and timely.
Interestingly, the senior executive’s immediate response to my observation was very matter-of-fact and quite different…
…no Mike, what I see before us, are billions of dollars of tangible – physical
assets; aircraft, equipment, technologies, and trained-skilled personnel
interacting to make this company competitive and efficient, as it must do on
a 24/7/365 basis.
Obviously, readers may draw their own conclusions from the above exchange. However, I ask each to do so in the context of the…
…globally universal economic fact that 80+% of most business’s value, sources of revenue, competitiveness, reputation, brand, and sustainability today, lie in – emerge directly from IA’s (intangible assets).
That’s not to suggest the obviously differing views expressed by myself and the senior executive were (wholly) right or wrong. In this instance, both of our perspectives obviously held merit. Mine, I would argue, may have greater relevance in the long term insofar as this global air cargo carrier sustaining its’ value, competitive advantages, and sustainability. That’s because, this company, like so many others today, is indeed ‘intangible asset intensive and dependent’.
There is absolutely no debate that aircraft and the associated machinery and equipment are understandably expensive tangible assets. However, the contributory role and value of each aircraft is maximized by the company…
• continuously developing, integrating, and aligning relevant
intangible asset efficiencies, i.e., updates, rejuvenations, and re-
purposed processes and systems, ala intellectual, relationship, and
• ability to effectively communicate same in 100+ languages and
dialects wherever this air cargo company has or proposes business
• converging each of the above at the right time, right place, and
right way delivers – produces value to the company and its customers
along with competitive advantages that collectively sustain – enhance
its brand, image, and goodwill that is expected and demanded 24/7/365.
So, regardless of what, how, or why I or the senior executive characterize ‘what we observe’, it’s important to affirm, the tangible-physical assets the senior executive referred to are, in my judgment, what follows, not precedes, coordinated and timely integration of ‘go, no go’ intellectual, structural, relationship, and competitive capital (IA’s), ala origins vs. outcomes! IA’s are indeed the foundational requisites underlying the sustainability, competitiveness, and profitability this, and other IA rich (intensive, dependent) companies project and enjoy.
I genuinely enjoy witnessing, following an engagement, wherein business leadership sense the excitement, passion, and receive the economic and competitive advantage benefits from engaging their IA’s. After all, IA’s produce-deliver economic and social realities which are observable, evidentiary, monitorable, and measurable, and contribute to a company’s value, sources of revenue, and sustainability. This is not merely subjective opinion or ‘lecture hall’ theory. Admittedly, merely engaging a company’s IA’s is not the final word, there remains more research and practice. But, the economic fact that 80+% of most company’s value, sources of revenue, competitiveness, and sustainability are inextricably linked to IA’s is not going away.
This post, was in part, influenced by Alan Alda’s newly published book titled ‘If I Understood You, Would I Have This Look on My Face?’