Using Intangible Assets To Weather The Recession – Part I

Michael D. Moberly   March 16, 2009     (Part 1 of 5 part post)



The last 180 days has delivered unprecedented financial dilemma’s which most companies, stockholders, 401k owners, retirees, and consumer have, and will continue to experience adverse affects for the forseeable future.  But, there’s a ‘900 pound guerilla in the room’ which is not being mentioned as having relevance or could contribute to mitigating at least some aspects of this crisis that is, a company’s intangible assets.  But, let there be no mistake, most company’s intangible assets have ‘taken hits’ (experienced some depreciation in value) like other company assets. 


This post is directed to the thousands of SME’s (small medium enterprises) and SMM’s (small medium multinationals) who are often and proportionately rich in intangible assets.  But, unlike their larger (Fortune 500) cousins, SME’s and SMM’s cannot expect to receive government backed bailouts – subsidies and, instead, must depend-rely on their own individual business receptivity, motivation, and acumen to quite literally devise their own strategies to try to survive the recession by, among other things, utilizing – maximizing – leveraging the intangible assets their company has developed.


It is in this light that these posts are intended to provide SME and SMM decision makers with practical and viable options and strategies for identifying, preserving, positioning, leveraging, and extracting value from their intangible assets to try to weather their respective and personal financial crisis.


Why aren’t intangible assets being discussed board rooms…?

It’s interesting that intangibles are seldom, if ever mentioned, in public statements or the countless legislative hearings seeking answers and strategies from the presumed experts to address the financial crisis in light of the economic fact – business reality that as much as 65+% of most company’s value, sources of revenue, foundations for future wealth creation and sustainability lie in – are directly linked to intangible assets, i.e., intellectual property, competitive advantages, know how, brand, image, reputation, and goodwill. 


While many companies and their decision makers are broadly familiar with intangibles, there’s little, if any, substantive reference to intangibles in the mainstream (business) media.  And, there’s virtually no mention of the degree to which intangibles actually serve as the primary sources – drivers of company value, or how stewardship, oversight, and management of intangibles are important, relevant, and essential components to addressing the recession. 


I would be remiss however if I didn’t mention the one consistent media reference to an ‘intangible asset’, even though its never defined as such. It ironically evolves from the 24/7 political punditry’s reference to the demise and/or damage to the Republican party’s brand. To be sure, brand is an intangible asset just like it was for Lehman Brothers, Wachovia, and Washington Mutual.


One thing is for sure, the intangible asset driven economy is here to stay and businesses globally are clearly in its midst wherein company value and sources of revenue have literally shifted from tangible (physical) assets, i.e., plants, property, and products, etc., to intangible assets, i.e., intellectual property, know how, brand, image, goodwill, reputation, etc.  


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