Michael D. Moberly, Principal, Founder kpstrat – A Business Intangible Asset Strategy and Risk Mitigation Collaborative – Business Intangible Asset Blog: A Reliable Resource for Business Leaders
November 14, 2023
Most businesses today (nationally, internationally) are intangible asset reliant. Unfortunately, for various reasons, a percentage of business leaders, entrepreneurs, management teams, boards, and investors are hesitant to wholly recognize – adjust to this business operation reality and economic fact.
Intangible asset reliant businesses are not bound by size, sector, sales, or stage of development, and most all early-stage – entrepreneurial businesses are intangible asset intensive and reliant.
For intangible asset reliant businesses, 70-80+% of their valuation, competitiveness, revenue generation capability, and sustainability can be directly attributed to intangible (non-physical) assets. Intangibles | Brookings – Unseen Wealth: Report of the Brookings Task Force on Intangibles on JSTOR – Intangible Assets: Computers and Organizational Capital | Brookings
That is, operationally – competitively, intangible asset reliant businesses hold expertise in developing the right intangible assets, and applying same in the right way, at the right time, at the right cost, and safeguarding – mitigating risk to those ‘mission essential’ assets for the duration of their contributory (life-value) cycle.
Fourteen types-categories of business things intangible are described at Business Intangible Asset Blog. https://kpstrat.com/wp-admin/post.php?post=18838
In businesses across sectors, various forms of intangible assets develop and emerge, e.g., various contexts – applications of intellectual capital (knowledge, knowhow), structural capital (processes, procedures) and, and relationship capital (associations, connections).
Routinely, all embed and publicly exhibit in a business’s operating culture, i.e.,
- marketing, branding, and communicating about products, services.
- R&D – IP, technology and software, contracts, transactions, training, and real estate.
Leaders, entrepreneurs, management teams, boards of, and investors in, intangible asset reliant businesses are (fiduciarily) obliged to…
- Ensure…the business is consistently positioned to develop and/or acquire, hold, differentiate, introduce, and apply the right sets-collaborations of intangible assets, in the right way, at the right time, and in the right place, lucratively, competitively, and sustainably.
- Differentiate particular-intangible assets as ‘mission essential’ relative to their respective contributory roles and value adds to the business, a brand, product, service, and operating culture.
- Extract competitive advantage and revenue generation capacity from the intellectual, structural, and relationship capital w/i those ‘mission essential’ intangible assets.
- Apply effective safeguards – risk mitigation which include monitoring changes in and risks to materiality and sustainability, e.g., contributions to valuation, competitiveness, relevance, attractivity, and revenue generation.
Executing these obligations effectively is warranted today, because. Not only are more business’s intangible asset intensive, reliant, and dependent, but unmitigated risks and/or challenges can…
- target – adversely impact reputation, brand, image, and operating culture, etc., can,
- emerge asymmetrically, at keystroke speeds, to (publicly) question, undermine, devalue, and dispirit,
- attach significant costs which can reverberate throughout investment and value chains.
Should aspects of the above be dismissed, weakly applied, not monitored, the exposure of ‘mission essential’ intangible assets to irascible, costly, and time-consuming risks, menaces, and/or jeopardies, etc., anyone or variation, can be delivered ‘virally’ at others will, at keystroke speeds, to potentially – irreversibly compromise asset valuation, competitive advantage, and revenue generation potential.
For further context how these categories are treated – addressed, you are encouraged to examine kpstrat.com, videos, and posts @ Business Intangible Asset Blog.
The ‘Business Intangible Asset Blog’ is experientially researched, written, and published by Michael D. Moberly since 2006, with1100+ (long form) posts providing readers, ala business leaders, management teams, entrepreneurs, boards, and investors, et al, across sectors, with current – relevant perspectives and nuanced insights on matters involving business things intangible.