Michael D. Moberly – February 27, 2024 – Business Intangible Asset Strategist & Risk Mitigator – Founder, Business Intangible Asset Blog & kpstrat
An essential starting point for every business to safeguard – mitigate risk to (a.) their proprietarily developed – held knowhow, processes, and (b.) issued IP is for leaders, R&D administrators, prospective investors, boards, and management teams, et al, to recognize neither…
- are physical, tangible, or fixed assets and should not be treated as if they are.
- come with innate deterrents to theft, misappropriation, or infringement.
Instead, issued IP and proprietarily developed – applied knowhow, etc., are intangible – non-physical assets. Both emerge from and hold unique forms, contexts, and/or applications of…
- intellectual capital (knowledge – knowhow)
- structural capital (processes, procedures)
- relationship capital (alliances, interactions, familiarity)
The intangibility – non-physicality of these assets and their content render them not particularly receptive to conventional (one-size-fits-all) safeguards sufficient to wholly deny external recognition and potential pilfering and infringement.
Nor do conventional safeguards inherently offer sufficient deterrents (designated as proprietary or trade secrecy) to misappropriation which is relatively prevalent today.
Asset vulnerability to, probability of, and criticality of loss can be mitigated via intangible asset specific safeguards being in place and practiced.
These are important distinctions for business leaders to consider because standard approaches for valuing and safeguarding accordingly, business’s (mission essential) intangible assets, I find, do not reflect the…
- universal business economic – operational reality that today, and for the foreseeable future, 70 – 80+% of most business’s valuation, competitiveness, and revenue generation capability, etc., lie in and/or derive directly from intangible (non-physical) assets. Intangibles | Brookings – Unseen Wealth: Report of the Brookings Task Force on Intangibles on JSTOR – Intangible Assets: Computers and Organizational Capital | Brookings)
This translates to most-more businesses are increasingly and irreversibly intangible asset intensive, dependent, and reliant. Hence, obligation for businesses to develop the right intangible assets, in the right way, at the right time, at the right cost.
Which is necessary for intangibles to also translate to/for a business as desirable – attractive features to its products and/or services, and then convert to favorable – memorable perceptions of reputation and goodwill.
Thus, distinguishing the value – revenue generating elements of business’s ‘mission essential’ intangible assets (and IP) is indispensable and should not be overlooked. That’s because the content of both underlie – publicly exhibit via business operating cultures.
Recognizing business’s reliance on intangible asset intensive products, services, processes, and procedures, etc., encourage leaders to frame same as (fiduciary) obligations (Stone v Ritter) warranting safeguards, monitoring, and risk mitigation.
In practical terms, for most businesses, their ‘mission essential’ intangible assets, (even though they may yet to be differentiated as such) perform and contribute as ‘essential ingredients’ (to valuation, competitiveness, revenue generation, and reputation, etc.) which should be treated as proprietary.
True, these intangible assets are seldom of the ‘garden-variety. Otherwise, it’s unlikely they would be targeted – sought by nefariously intended mis-appropriators or infringers.
Every business which I am familiar is obliged to recognize that the contributory roles – value adds produced by intangibles can be…
- measured, monitored, safeguarded, defended, and risks mitigated.
- durable, resilient, sustainable, and beneficial to valuation, competitiveness, and revenue generation.
When theft-misappropriation-infringement of ‘mission essential’ intangible assets and/or IP is successful, a frequent consideration is that the product – content of either act will translate (relatively rapidly) to useable benefits and quick market advances for the recipient(s), whomever – wherever they may be…
Recognizing how-why this is relevant to asset safeguards and risk mitigation strategy development is important. Otherwise, costly, and irreversible setbacks to/for the rightful asset developer-holder could be imminent.
The historically interwoven chain (depth-breadth) of nefarious ‘bad actors’ globally, ala facilitators and enablers to theft, misappropriation, infringement of proprietary business information and IP is long, expanding, and costly. (and numerous others at Business Intangible Asset Blog) LINK
Unfortunately, many businesses key intangible assets still go unrecognized, undifferentiated, and not treated as proprietary or mission essential which every brand, product, service, and reputation rely, and depend, providing they remain intact and untarnished.
Marginalizing business’s ‘most important’ intangible assets, e.g., conceiving their contributions and valuation to merely be durational to accommodate conventional accounting and/or IP legal precepts, are nearsighted and can be costly oversights.
And, when the content of particular intangible assets hold dual-use capability, their attractivity and breadth of interest among the nefariously inclined, rises accordingly and globally.
Readers are invited to examine ‘Safeguarding Intangible Assets’ a book I authored at https://kpstrat.com/books/
Posts @ Business Intangible Asset Blog present various business economic – operational realities. Each warrants the attention of business leaders, entrepreneurs, R&D administrators, management teams, boards, and investors across sectors. Mitigating (reacting, responding to) the often ‘public – viral’ risks and challenges which produce reputational risks, are obligations with little room or time for equivocation or error.
The Business Intangible Asset Blog was created in 2006 and now includes 1200+ topic-specific posts. Each post is intended to provide readers with unique and reliable insights on current matters related to – affecting business things intangible.
Posts at Business Intangible Asset Blog are developed – written solely by Mr. Moberly (not AI), and are intended to draw readers attention to the development, application, management, safeguards, and risk mitigation obligations necessary today for business’s ‘mission essential’ intangible assets.
Readers are also invited to explore other posts, along with books and papers available @ ‘Home – kpstrat
