Michael D. Moberly March 26, 2012
Let’s agree at the outset with the economic fact that, globally speaking, 65+% of most company’s value, sources of revenue, and building blocks for growth and sustainability today evolve directly from intangible assets.
My 20+ years of work and research in the intangible asset and IP arena clearly suggest there remains considerable unfamiliarity and even uneasiness among some management teams, c-suites, and an assortment of stakeholders what intangible assets really, but also, how to identify them, assess their contributory value, and utilize and/or extract value efficiently.
Building the proverbial, but always essential business case (rationale) for any new initiative can present some challenges. For intangible assets, it will require intellectual effort to design and integrate an awareness campaign and develop procedures to identify, monitor, and assess asset performance. But each represents an essential element to achieving success as measured by elevated profitability, growth, and sustainability. In most instances, it begins by achieving a practical and operational appreciation for intangible assets and understanding how to identify, develop and utilize this distinctive and increasingly valuable category of assets.
Those possessing the requisite fortitude and business acumen, surely acknowledge that integrating – executing any company-wide initiative generally presents its own set of challenges, notwithstanding one involving assets that (a.) lack physicality, and (b.) seldom, if ever, are accounted for – reported on company balance sheets or financial statements.
Consequently, some management teams carry misunderstandings and misgivings about intangibles and are quick to dismiss them as being (too) esoteric, or worse, irrelevant to their company by not recognizing how, where, or when they ‘fit’ into either tactical or strategic business planning.
The following represent (some) key factors which in my view, should be considered when conceiving and presenting a business case to a company’s decision makers regarding intangible assets:
- Bring operational clarity to intangible assets through a repertoire of relevant examples applicable to a variety of industries and sectors…
- Draw decision maker attention to the importance of practicing consistent stewardship, oversight, and management of intangible assets, framed as fiduciary responsibilities…
- Describe how and why it’s necessary to not just identify intangibles, but unravel their origin, evolution, ownership, and defensibility…
- Describe best practices for sustaining control, use, ownership, and monitoring value and materiality of the assets, and, why they’re necessary…
- Articulate (intangible) asset valuation in plausible and understandable –‘economics 101? – contexts…
- Describe intangible assets in revenue conversion and performance measurement contexts…
- Describe how to determine asset ‘suitability’, i.e., recognition, severability, transferability, life cycle, and risks…
- Demonstrate relationships between the production (acquisition) and use of intangibles relative to producing contributory value, multiplier-effects, company value, competitive advantages, and sources of revenue…
- Describe ways to position and/or bundle particular assets (when/if feasible) to achieve broader leveragability, competitive advantages, and value potential…
- Avoid (over) reliance on subjective – worst case scenario risks and threats as a maneuver to attract decision makers’ attention…
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