Transaction Expediency

It’s important for business decision makers to…recognize that placing too much emphasis on transaction (deal) expediency can lead to unnecessary hemorrhaging of intellectual properties, competitive advantages and other categories of valuable intangible assets, i.e., intellectual, structural, and relationship capital.

The sort of asset hemorrhaging I am referring to…emanates in the economic fact that today, 80+% of most companies, and by extension, transaction’s value, sources of revenue, competitiveness, and sustainability lie in – emerge directly from intangible assets.

A presumptive need for transaction expediency often exacerbates to become the transaction driver…which, in today’s hyper-competitive, aggressively predatorial, and winner-take-all global business transaction environment, moderates, if not trivializes…

• conducting comprehensive pre-post transaction (intangible asset-specific) due diligence and/or market entry planning.

• assumptions that transactions can be consummated, and revenue streams commenced before the assets’ in play (i.e., intangibles, IP, know how, competitive advantages, etc.) will fall prey to infringement, misappropriation, counterfeiting, and/or theft.

A requisite for transaction expedient strategies to be consistently successful…decision makers would presumably have to know in advance and with some precision…

• when (windows, time frames) acts of intangible asset hemorrhaging, ala infringement, misappropriation, theft, will occur, and,

• the time required for the economic – competitive advantage adversaries to fully commercialize the targeted product and/or service and enter supply and distribution chains, be they legitimate, or illegitimate.

Knowledge of the above and its effect on a transactions’ outcome would reflect the (legitimate) company’s head start to the market place.

Unfortunately, it’s rare for transaction management teams to have…(a.) this level of operational familiarity, and (b.) the necessary intangible asset (value, competitive advantage) safeguards and pre-post (transaction) monitoring capabilities in place deliver these important distinctions in real time to thwart or mitigate the inevitable adverse consequences.

Head starts, as I am portraying here…can be elusive, but never-the-less, they should be considered necessary to transaction outcomes, but in the context of hours and days they require to execute, not weeks, months, or quarters.

Transaction management teams that advocate…expedient execution strategies are often found to be rationalizing the need for expediency based on assumptions that…

• any economic and/or competitive advantage an economic-competitive adversary will glean through intangible asset infringement and/or misappropriation will be short-lived and/or outpaced by normal-rapid changes in consumer – market demands which only the legitimate originator will be able to deliver, or,

• intangible assets, ala intellectual, structural, and relationship capital, and IP are readily renewable resources.

Respecting the ‘narrowness’ of margins today and the hyper-competitive, aggressively predatorial, and winner-take-all global business transaction environment, I urge transaction management teams to revisit both assumptions!

Michael D. Moberly  June 21, 2008  [email protected]  ‘Business Intangible Asset Blog’ where attention span and action really matter!


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