Intangible Asset Roadmap

Michael D. Moberly    April 29, 2013       ‘A blog where attention span matters’.

It’s really quite straight forward, embedded in the economic fact – business reality that increasing percentages of company value and revenue lie in – evolve directly from  intangible assets, management teams, boards, and other business decision makers, regardless of a company’s size, the location of its headquarters’, its maturation, its receptivity to being innovative and forward looking, or industry sector(s) it serves, its quite likely that a practical and viable roadmap for (a.) putting intangible assets to work, and (b.) preserving their (contributory) value and competitive advantages will be beneficial.

Such a roadmap, particularly the type that I advocate which includes ‘putting intangible assets to work’ for a company, starts, in my view, with (a.) the misnomer that intangible assets are synonymous with intellectual property, i.e., patents in particular, and (b.) re-framing the perception that the management, stewardship, and oversight of a company’s intangible assets fall exclusively to the legal and accounting domain.

Let’s be clear, most, if not all decisions and actions related to intangibles assets are and should be business decisions, preferably in collaborative concert with the c-suite, security, risk management, legal counsel, and accounting.   Too, as articulated by a Delaware court in Stone v Ritter, they can also assume a fiduciary responsibility that includes (a.) having consistent operational familiarity, and (b.) preserving their control, use, ownership and monitoring value, materiality, and risk.

Let there be no misunderstanding, the (effective) management, stewardship, and oversight of a company’s intangible assets has permanently shifted from merely being optional tasks and/or ‘nice to have’ processes, to, as noted above, something akin to fiduciary responsibilities that can no longer be dismissed or neglected, e.g., it will happen only when (a.) time permits, (b.) the resources become available, (c.) competitors are observed doing it, or (d.) a professional standard or a legislative mandate is adopted leaving businesses with few, if any options, other than compliance.

Too, the intangible asset ‘roadmap’ advocated here, dispels the really unfortunate assumption held by far too many management teams that intangible assets and their management are the sole province of large, multi-national, Fortune 1000 categories of corporations.  The reality is, intangible assets are firmly embedded in and being routinely produced by the 20+ million small, mid-size, and early-stage firms in the U.S. and no doubt, an equal number of international firms regardless of sector.  A key issue, in my view, in both circumstances, does either understand it, know it, and actually (a.) put their intangibles to work, and (b.) have processes and procedures in place to identify, unravel, assess, protect,  preserve, and monitor their intangibles’ contributory value and the competitive advantages and revenue they produce.

Most every company, with few, if any exceptions the author has had contact over the years, possesses what I refer to as ‘home grown’ (internally produced)  intangibles that are frequently highly specialized and  company specific irrespective of size, industry sector, or maturity.  In most instances, I find these assets, managerially speaking, are not well suited for one-size-fits-all or snap-shot-in-time (asset) management approaches.  Instead, they require nuanced handling aligned – commensurate with…

  • achieving the most effective and efficient use
  • maximizing their contributory-collaborative value, and
  • building and strengthening a company’s structural capital and competitive advantages throughout its supply-stakeholder value chain
  • particular types of (business) transactions.

For these reasons, I advocate practical, yet individualized intangible asset management approaches which I routinely refer to as my ’what fits best’ approach.  That is, at least my experience suggests that ’what fits best’ for a company will usually ‘work best’ for a company insofar as helping achieve business goals and objectives through its stewardship, oversight, and management of its intangible assets.

So, whether one conceives my ‘roadmap’ through a conventional sequential lens or more as a ‘big picture’ mosaic that reflects – encompasses a range of challenges fully integrated with practical insights for solving (intangible) asset management, stewardship, and oversight challenges, my message remains laser focused; business decision makers, regardless of their specialization, professional experiences, or title, need to acquire, if they haven’t already, a strong operational and managerial clarity – familiarity with intangible assets because these skill sets are essential requisites for successfully and effectively managing intangible asset dominated/intensive companies in the globally competitive, aggressive, and predatorial business transaction arena in which there are absolutely no indicators of reversal.

I respectfully recognize, just making sense of the knowledge (intangible asset) based economy and the increasingly intense business environment it has given birth to, is not sufficient unless readers can literally use and apply the information provided, that is, to frame and execute their own profitable and sustainable roadmap for their intangible assets.  That’s why the various chapters in our upcoming book will, individually and collectively, provide readers with relevant and current insights about, not just a starting point, but the practical steps that are necessary along the way to help management teams arrive at a successful, profitable, and strategically sustainable destination!

While I am a strong advocate of utilizing intangible assets as fully and completely as possible, it is not my intent to represent intangibles as constituting either a silver bullet or a one-size-fits-all template that will produce immediate financial – competitive advantage magic for a company.

I do know however, that it remains an irreversible economic fact that 80+% of most company’s value, sources of revenue, and growth potential lie in – evolve directly from intangible assets.  Thus, unless and until management teams, boards, investors, stakeholders, and other business decision makers begin demanding that (their) company’s intangible assets ‘be taken out for a ride’, those assets will likely remain idle, taken for granted, and otherwise left unused, under-valued, and vulnerable to global competitors to acquire and use at will.

Each blog post is researched and written by me with the genuine intent it serves as a useful and respectful medium to elevate awareness and appreciation for intangible assets throughout the global business community.   Most of my posts focus on issues related to identifying, unraveling, and sustaining control, use, ownership, and monitoring asset value, materiality, and risk.  As such, my blog posts are not intended to be quick bites of  unsubstantiated commentary or information piggy-backed to other sources.

Comments regarding my blog posts are encouraged and respected. Should any reader elect to utilize all or a portion of my posts, attribution is expected and always appreciated. While visiting my blog readers are encouraged to browse other topics (posts) which may be relevant to their circumstance or business transaction.  I always welcome your inquiry at 314-440-3593 or [email protected]

 

 

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