Ideas Are Intangible Assets!

Michael D. Moberly    July 30, 2012

As most of us recognize, Jack Welch (former Chairman of General Electric) made numerous contributions to the way companies are managed.  One of which was his ability to recognize the core elements of an issue and separating the proverbial fluff.   

I think two good examples of this lie in the following statements, both attributed to Welch, i.e.,

  • an idea 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… 
  • an organization’s ability to learn and translate that learning into action rapidly, is the ultimate competitive advantage…

The desire to learn and development and execution of ideas generated from what one has learned of course, can manifest as intangible assets, or more specifically as intellectual and structural capital.

That’s why we recognize the importance of having mechanisms in place whereby ideas can be understood, assessed, and accordingly, rise to the surface in a ‘jack welch’ context.  Otherwise, potentially useful, valuable, and competitive advantage driving ideas can go unrecognized, under-valued, or even dismissed, and if there ‘good one’s’ all too often, competitors will exploit as their own.  That’s why I commence most engagements by laying the foundation for the parties to achieve a mutual understanding and respect for…

  • the economic fact that 65+% of most companies’ value, sources of revenue, and ‘building blocks’ for growth, profitability, and sustainability evolve directly from numerous categories – types of intangible assets!

By doing so, paves the way for helping company’s identify their intangibles and producers, unravel the assets’ origins, and assess their contributory value and effective alignment with core business objectives and strategic planning.  This routine is designed to coincide with a second component, which is, putting in place what I refer to as ‘what fits best works best’ practices and procedures intended to sustain (protect, preserve monitor,) control, use, ownership, and the revenue – value producing elements of the intangible assets or, ideas.

This approach, which I advocate, does not overlook, nor does it under-estimate the reality that business operations and transactions now routinely have global elements and are often conducted under extraordinarily competitive, predatorial, and winner-take-all circumstances.  That said, this approach is, more frequently than it should at this point, confronted with an ‘obstacle course’ of hierarchical skepticism and reluctance which generally translates as…

  • a reluctance to acknowledge the intangible assets a firm produces and possesses,
  • an absence of confidence in ways to better utilize, exploit, and extract value from intangible assets, know how, and competitive advantages, etc.,
  • unfounded concerns or misconceptions about the resources, cost, time, and/or processes necessary to elevate intangible assets as routine agenda items in c-suites, boards, and management teams,
  • professional embarrassment about having not already done so!

When rising percentages of most company’s value, sources of revenue, and sustainability lie in intangible assets, it just shouldn’t be that difficult to cast such skepticisms and reluctance aside in order to get the message that a firm’s intangible assets absolutely must be on discussion agendas!

 Otherwise, if a company’s normally risk taking decision makers remain skeptical or unconvinced about these fiduciary necessities, they should be prepared to lose, forego, or more politely, inadvertently relinquish most, if not all of the prospective value, revenue, competitive advantages, and strategic benefits those assets may (could) have produced.


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