How To Talk To Your Board About Intangible Assets

For go fast, go hard, (go global) businesses, intangible asset strategists should be…no strangers to board rooms and c-suites insofar as addressing questions and articulating strategies regarding all things intangible, after all, it is…

  • an economic fact that 80+% of most company’s value, sources of revenue, competitiveness, and sustainability either lie in or emerge directly from intangible, not tangible, assets, primarily various forms of intellectual, structural, and relationship capital.

The importance of recognizing when, where, how, and why a company’s most valuable assets…develop, are applied, are in play, and, are at risk, should never be underestimated.

As an intangible asset strategist and risk specialist, I have had the good fortune, over-the-years, to…meet with individuals comprising all levels of business c-suites and boards. Admittedly though, and respectfully, a not insignificant percentage of the conversations, discussions, and professional association presentations manifested as reactive, not-so-much proactive as designed. This turn, was based largely on audience Q&A and other follow-up questions in which it was conveyed that significant risks were looming for a company, have already materialized, and/or are poised to cascade throughout a business to…

  • adversely affect intangible assets which have been legitimately developed, expensively honed, and anchored to a business, its products and/or services,
  • which play significant contributory roles to the business as-a-whole, or, a specific product’s value, competitiveness, and revenue generation.

My responsibilities, as I see them, to c-suites and boards are straightforward…(1.) explain, and (2.) provide options, ala the benefits of my experienced counsel, not explode my ego through language or demeanor. Doing the latter with hints of arrogance and/or condescension is seldom, if ever, a prudent position for others to acknowledge (accept) and execute your counsel.

I have found it useful and respectful to…quite early in a c-suite conversation, especially when there is an obvious risk issue at hand, to merely ask ‘what is it, in my capacity as an intangible asset strategist and risk specialist, you would like for me to discuss’?

  • of course, this question can be framed – adjusted in various ways to reflect the circumstance, and
  • the rationale for posing the question is to acquire necessary clarity as a prelude for a cogent and succinct response, and to advance the discussion that reflects their description.
  • should business leaderships’ perspective have particular flaws, those may be amended by respectfully articulating alternatives that reflect your ‘subject matter expertise’.

I am acquainted with numerous experienced professionals who variously hold the title of CSO (Chief Security Officer’s) as well as consultant’s, who, for various reasons…are not inclined to consistently follow this sage advice in either their written or verbal communications…

Through countless encounters – engagements at c-suite levels, I’ve developed…what I believe are useful ways to effectively (clearly, succinctly) communicate.Be it individually, collectively, and whether my perspectives are good news, or a mixture of something other than good news. I believe it is a matter of professional obligation to…

  • not infrequently, the outcome is a prelude to finding themselves, and often, their entire ‘business unit’, wholly left out of future c-suite organizational resilience – risk management-mitigation planning, aside from the ex post facto variety.
    • articulate perspectives respectfully and with relevant – company specific nuance. but, in doing so,
    • recognize that ‘nuances’ may be interpreted, at the c-suite level, as mere substitutes for saying there are additional – forthcoming risks.

Over the past decade, I, and countless others, have witnessed board’s assuming a more inclusionary focus, with respect to…(1.) the technical – operations sides of business, and (2.) the intangible asset side of business, i.e., risks to, revenues generated by, values assessed, and competitive advantages produced.

With respect to articulating risk(s) to the intangible asset sides to business operation…I encourage practitioners to avoid assigning percentages to risk, especially probability. Instead, I generally choose to describe impending – materialized risk relative to vulnerability and criticality to a business and the challenges associated with mitigation – mediation!

Respectfully, I recognize there remain a not insignificant percentage of business leaders who… for various reasons, have yet to achieve an operational level familiarity with the intangible assets their business routinely develops, produces, and have become fully embedded in operational processes, products, and services in the form of intellectual, structural, and relationship capital…

  • one result which I have observed in numerous engagements and conversations is business leadership’s assumption that – preference for categorizing intangible asset strategy and risk as constituting an additional ‘technical component’ to business operation, which I respectfully disagree.

At this juncture the level of operational awareness and action on the intangible asset sides of business remain variously soft…for that reason, I am often reluctant – cautious to argue all business intangibles are, or even should be characterized as merely another technical function…

  • through my lens, referring to intangibles as another technical function, further obscures, perhaps suppresses the real contributory role and value businesses derive from human, not AI, originated intellectual, structural, and relationship capital.

My counsel is this; when risks to valuable, competitive advantage, and revenue generating intangible assets materialize…an important obligation I accept is, endeavor to focus c-suite’s attention on….

  • making critical intangible assets as resilient as is viable, and
  • incorporate, as quickly as possible, relevant risk foreseeability and mitigation, because…
    • Principled (asset) resilience and mitigation strategies acknowledge the imprudence, and perhaps irrationality of assuming ‘absolute prevention’ exists in 2019 and beyond.
    • The notion of absolute prevention is, in my judgment, a far less viable position, relative to the increasing sophistication and asymmetry’s presented by global cadres’ of economic and competitive advantage adversaries which produce – deliver business risks which materialize and cascade at keystroke speeds.  

Michael D. Moberly  St. Louis  July 9, 2019  [email protected] ‘the Business Intangible Asset Blog’, since May, 2006,  650+ (long form) posts published, ‘where one’s attention span, business risks, realities, intangible assets, and solutions converge’!

Readers are invited to explore other blog posts, video, position papers, and books at https://kpstrat.com/blog

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