Intangible Asset Rich Companies: Building A Culture That Fits!

Michael D. Moberly    January 26, 2012

What is a company culture?  A company culture is a system of shared values and practices that define what is important to that company.  Frequently, these values and practices become blended – embedded with other (already existing) norms and beliefs that convey (to employees, as well as management teams)  acceptable attitudes, behaviors, and practices.

Schein, among others, points out that a company culture will frequently emerge as management teams, boards, and employees collectively recognize the beneficial outcomes that accrue to each group respectively, as they successfully solve problems by applying those shared norms, values, beliefs, and practices. 

What is a knowledge-based economy?    The phrase ‘knowledge-based economy’ was popularized, if not initially coined by Peter Drucker.  In fact it’s the title of Chapter 12 in his book titled ‘The Age of Discontinuity’.  

 A knowledge-based economy, according to Drucker, refers to the use of an array of technologies and practices such as knowledge engineering and knowledge management, etc., to produce economic benefits, competitive advantages, and efficiencies for a company.  In a knowledge-based economy, knowledge, Drucker says, becomes the tool to achieve and execute, not necessarily a product or a simple outcome.

 The center piece of today’s knowledge-based economy are the intangible assets companies develop-produce and/or acquire.  Simply stated, developing a company culture to effectively fit (reflect) an intangible asset rich business means acquiring a fairly high level of operational familiarity with intangibles.  This starts of course with the simple phrase ‘know’em when you see’um’.  

Such familiarity also permits management teams, boards, and employees alike, to develop, position, bundle, safeguard, and profitably exploit intangibles to bolster a company’s value, competitive advantages, and revenue streams, and do it ‘faster, better, cheaper’ than competitors.  It also lays a compelling foundation (building blocks) for growth and sustainability.

Why is a company culture focused on its intangible assets necessary in a knowledge-based economy?   First and foremost because it’s an irreversible economic fact that 65+% of most company’s value, sources of revenue, and building blocks for growth and sustainability lie in – directly evolve from intangible assets.  

Far too frequently however, the existence and contributory value of intangible assets do not consistently appear on conventional mba oriented dashboards, in part because the dashboards remain tuned to tangible-physical assets vs. intangible (non-physical) assets.  

Still, for some management teams and boards, intangibles:

  • remain as somewhat of a managerial, financial, and exploitation mystery in terms of how to best utilize them to extract value and build competitive advantages
  • present a reporting-accounting conundrum because they’re seldom, if ever, reported on company balance sheets or financial statements, yet they literally form the competitive, value, and revenue backbone for most companies. 

The much desired objective is to build a resilient and self-perpetuating (company) culture that collectively understands intangibles’ value, revenue, and competitive advantage creation potential and processes, i.e., how ideas and innovation (intangible assets) evolve and can be fostered to the point they consistently deliver favorable returns for a company.  Again, such an objective can materialize in many forms, e.g., newly created efficiencies, stronger competitive advantages and customer relationships, new knowledge, and/or greater reputational value.

 (Some definitions contained in this post relating to knowledge-based economy were adapted by Mr. Moberly from Wikipedia.)

While visiting  my blog, you are respectfully encouraged to browse other topics/subjects (left column, below photograph) .  Should you find particular topics of interest or relevant to your circumstance,  I would welcome your inquiry at  314-440-3593 or [email protected]


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