Company’s Should Seek A Fresh, Objective Look At The Intangible Assets, Competitive Advantages and Know How They’re Producing…

Michael D. Moberly    July 28, 2008

“An idea”, says Jack Welch, former Chairman of General Electric, “is not necessarily a biotech idea.  That’s the wrong view of what an idea is.  An idea is an error-free billing system.  An idea is taking a process that used to require six days to do and getting it done in one day.  We get 6 to 7 percent productivity increases routinely now, mostly because of ideas like that.  Everyone can contribute”.

My conceptual starting point for commencing any – every engagement, whether it’s a small, medium-size firm, a startup, a venture capital investment, an R&D project, a university research unit, a mature firm, or conducting market entry due diligence, is to bring clarity, credibility, and relevance to the indisputable economic fact – business reality that 75+% of most companies’ value, sources of revenue, and future wealth creation lie in intangible assets, IP, competitive advantages, and know how!  In other words, ideas that can and do bare fruit, but still routinely go unrecognized, un-or under-valued, or even dismissed.

I then work collaboratively with principles’ and decision makers’ to identify, assess, bundle if possible, and most certainly, align those assets with the company’s core business objectives and strategic plan.  This coincides with the important component of putting in place appropriate (relevant) practices to sustain (protect, preserve monitor,) control, use, ownership, and the revenue – value producing elements of those assets, or, ideas, as Jack Welch characterizes them.

Respecting the reality that business operations and transactions are often conducted in extraordinarily competitive, aggressive, nanosecond, and winner-take-all arenas, some decision makers and principles express skepticism about the practicality of my conceptual framework which often translates as (a.) a reluctance to acknowledge the intangible assets their firm produces and possesses, (b.) an absence of confidence in ways to better utilize, exploit, and extract value from their ideas, i.e., intangible assets, know how, competitive advantages, (c.) unfounded concerns or misconceptions about the cost or process necessary to bring those assets to the forefront of their company, and/or (d.) embarrassment about having not already done so!

If a company’s (normally risk taking) decision makers are unconvinced about these fiduciary necessities (responsibilities) they must be prepared to experience sometimes costly, time consuming, and momentum stifling circumstances.  Translated, they will likely lose, forego, or more politely, inadvertently relinquish most, if not all of the prospective value, revenue, and strategic (wealth creating) opportunities those assets may (could) have produced. 

If decision makers, D&O’s, business unit managers and other principles still remain unconvinced about the importance and relevance of engaging a fresh and objective look at their intangibles, competitive advantages, and know how, please reconsider this post!



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