Michael D. Moberly August 11, 2008
For some business decision makers, the phrase ‘knowledge-driven economy’ is considered an over-used and superflous cliche. Similarly, the view that 75+% of most company’s value, sources of revenue, and future wealth creation today lie in intangible assets, may seemingly carry little, if any, relevance to your company!
Somewhat justifiably then, without a clearer picture of how intangible assets develop within a company and deliver the requisite ‘return on investment’, business decision makers are likely to continue to show a reluctance for devoting time to learning about, let alone, trying to harness, their company’s intangible assets.
The reality though is quite different because intangible assets impact every type of business be it a small, medium size firm, a mature company, a large multi-national, or a start-up. That is, positive outcomes such as profitability, brand integrity, customer loyalty, efficiencies, and competitive advantages, etc., are now based less on physical – tangible assets and resources, and more on the production, development, management, and leveraging of intangible assets!
For those business decision makers who remain hesitant to engage their intangible assets, below are five reasons to continue to overlook, neglect, and dismiss their role and contribution:
1. there is no good picture of how a company can obtain a ‘return on investment’ for investing (more) time in their intangible assets, proprietary know how, trade secrets, and competitive advantages…
2. the money, resources, and time spent on identifying, developing, managing, and extracting value from intangible and other knowledge-based assets is an expense rather than an investment, which can literally walk out the front door and possibly go to a competitor…
3. there’s no clear picture related to the money, resources, and time necessary for positioning (training) a company to improve the management (stewardship, oversight) of its internal processes to maximize, utilize, and extract as much value as possible from its intangible assets…
4. it’s difficult to measure – leverage the performance of intangible assets to attract investors and capital because the existing data/information (necessary to achieve this) is often incomplete and the methodologies for measuring are varied and highly subjective…
5. there are risks associated with being overly transparent about a company’s intangible assets, particularly with the possibility that competitors, raiders, taxing agencies, and trollers could use that information for adverse affects, in other words, why should my company ‘go on front street’ with its intangible assets unless and/or until my competitors do it…
Please remember though, if company’s don’t practice good and consistent stewardship, oversight, and management of their intangible assets now, i.e., sustain (protect, preserve, monitor) control, use, ownership, and value now, don’t expect them to be there when you do!
(Adapted by Michael D. Moberly from ‘Intangible Assets Observatory’, Policy Trends in Intangible Assets, Report of the European HLEG on the Intangible Economy)
