Intangible assets are…
It’s relevant to achieving operational level familiarity with intangible assets for reader’s to recognize that, while intangibles have general ‘text book’ definitions, they also have, in many instances, assumed business specific characteristics…
1. Unique blends, combinations, collections, and/or collaboratives of a particular-process, activity, asset, market condition, ala intellectual, structural, relationship capital that emerges and businesses can apply-exploit to (a.) differentiate themselves from competitors, (b.) create business value, (c.) generate new streams of revenue, and (d.) achieve sustainability and become more resilient. Adapted by Michael D. Moberly from work by Michael Porter, Harvard Business School
2. Economic benefits (revenues, value, royalties, licensing fees, etc.) anchored in distinctive features, processes, or programs that contribute to business competitiveness by creating efficiencies, building value, and generating sources of revenue. Michael D. Moberly
3. Primary sources of competitive advantage which lie increasingly in unique and sometimes proprietary knowledge, knowhow, and processes a company acquires, develops, and possesses, and the special value that comes with the unique understanding of how either can be used to achieve competitive advantages, value, and generate revenue. Adapted by Michael D. Moberly from work in McKinsey Quarterly, 2004
4. Evolving over time within a company, and may not always be a singular outcome of a planned action or the product of specific capital allocation decisions. Michael D. Moberly (adapted from Brookings Institution – Understanding Intangible Sources of Value)
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Readers are also encouraged to keep this in mind with respect to identifying – assessing business intangible assets…that is, it’s every business produces, has developed, and possesses a substantially larger percentage of intangible assets than what may be sensed from an initial review.
This is another reason why achieving operational level familiarity…with a business’s intangible assets often serves as the pivotal prelude to elevating value, creating new sources of revenue, and strengthening competitiveness, resilience, and sustainability.
Preferably then, intangible asset identification – differentiation is followed by…
- mapping-tracking each asset’s contributory role and value to a designated project, initiative, product, or service, and
- if and/or how each asset is being exploited (monetized) to contribute to your business’s overall value, i.e., as a source of revenue, competitive advantage, sustainability, etc.
- contextualizing intangible assets as enablers – facilitators – contributors to the development of tangible-physical assets, i.e., products and/or services.
By examining these categories – examples of intangible assets in this manner…and, in accordance with their relevancy to each specific business and/or circumstance, some of the intangibles as described above, may, at least initially, appear to have tangible – physical characteristics, e.g., real estate zoning permits.
The intangible aspects to zoning permits…manifest intellectually (visually) as various ‘use opportunities’ which a seller – buyer may legitimately exploit to elevate a property’s attractivity, e.g., the timeless reference to real estate attractivity; location, location, and location.
Categories – types, and examples of intangible assets…
1. Technology – internally developed (proprietary, unpatented) software, databases, source code, custom applications, and technology sharing agreements…
2. Marketing – advertising concepts, focus group findings, subscription lists, music, promotional characters/devices, newsletters, credit information files…
3. Engineering – designs, drawings, blueprints, schematics, diagrams…
4. Relationship – Organizational Capital – customer/client relationships, mailing lists/data bases, retrieval systems, distribution channels, 1-800 numbers…
5. Competitive Research – actionable business intelligence, i.e., competitors plans, intentions, and capabilities…
6. Real Estate – zoning permits, water/mineral/development rights, easements, location visuals and proximities, options…
7. Human-Intellectual Capital – work force in place (experience, education, training), training manuals, operating processes, non-compete/disclosure agreements (if transferable), the sum total of employees’ specialties, skills, attitudes, abilities, competencies, and technical (proprietary) know how, insurance enrollment/expirations
8. Internet – domain names, website design, B2B/e-commerce capabilities, web links, accessibility, use, URL’s…
9. Company-Business-Produce Identity – image, goodwill, reputation, trade name, logos, brand…
10. Contracts/Agreements – most any contract that has a definable life and some form of exclusivity, i.e. employment, affiliation, advertising, sales, subscription, service, long term lease, non-compete covenants, joint ventures, value of future purchases due to special relationships with vendors, royalties, technology sharing/joint ventures…
11. Products/Services – warranties, production capability, order/production back log, operating permits, licenses, renewals, processes, expirations, retail shelf space, distribution rights/networks…
12. Intellectual Property – patents, copyrights, trademarks, trade secrets, trade dress, trade name, service marks, mastheads, logo design, brands…
13 R&D – (in-process) studies, formulas, processes, assembly data, regulatory agency approvals, collaborative alliances, formulas, outstanding RFP’s, specialized technical repositories, libraries…
14. Communications – methods, cable/transmission rights, FCC licenses, certification, bandwidth…
15. Structural Capital – structures and processes employees develop to increase productivity and performance (business process/method patents)
Adapted by Michael D. Moberly from (a.) professional experiences, engagements, (b.) Weston Anson’s ‘The Intangible Asset Handbook: Maximizing Value From Intangible Assets’, and (c.) Section 197 of the IRS Code
Michael D. Moberly November 12, 2018 St. Louis m.moberly@kpstrat.com ‘The Intangible Asset Blog’ http://kpstrat.com/blog since May 2006 ‘where attention span, business realities, and solutions meet!
Readers are invited to examine other blog posts, papers, and books I have produced at https://kpstrat.com/blog/papers
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