Readers may find it useful to…engage this post with the fundamental premise that organizations and their leadership have good faith fiduciary responsibilities, ala *Stone v. Ritter, which attaches to the stewardship of intangible assets. https://kpstrat.com/wp-admin/post.php?post=5989
The ‘good faith’ responsibilities emanating from Stone v. Ritter...manifest as organization leadership and management teams assuming responsibility to routinely and objectively ask and ensure…
- is this company effectively positioned, insofar as possessing the expertise and skill sets, to identify, unravel, develop, bundle, and fully exploit its intangible assets while simultaneously safeguarding and monitoring the assets’ contributory role, value, materiality, revenue generation, and competitive advantages produced, while thwarting-mitigating the persistent and asymmetric risks which influence the assets vulnerability’?
Fiduciary responsibilities…bring clarity to an organization’s role in the development, monitoring, and safeguarding of intellectual properties and other forms of intangible assets. https://kpstrat.com/wp-admin/post.php?post=5990
Stewardship and safeguarding of a company’s intangible assets…aside from Stone v. Ritter lie squarely with company leadership and management team foresight to sustain control, use, ownership, and monitor intangible assets’ value and materiality throughout their respective contributory value, materiality, and functionality (life) cycles.
When leadership is either unable or unwilling to…do either, or fail, little else may matter, because intangible asset values, competitive advantages, and company reputation can quickly and irreversibly erode, become undermined, or ‘go to zero’! https://kpstrat.com/wp-admin/post.php?post=3656
Important preludes to…achieving – exceeding intangible safeguard objectives, with consistency, is distinguishing and monitoring key-proprietary assets’ development and contributory role(s) and being particularly alert to…
• the presence-materialization of risk as measured by (a.) vulnerability, (b.) probability, and (c.) criticality.
• fluctuation(s) in those assets’ contributory role and value relative to either’s relevance to a particular-project, product, service, or transaction.
The primary benefits – outcomes for company’s doing so, is recognition that…
1. Intangible asset intensive and dependent organizations…are proliferating as it is an economic fact that 80+% of most company’s value, sources of revenue, competitiveness, and sustainability today lie in – emerge directly from intangible assets.
2. Intellectual, structural, and relationship capital…ala intangible assets, are embedded in all innovation, products, services, transactions, and projects.
3. Deploying safeguards at the earliest stage…of the development or acquisition of key intangible assets.
4. Monitoring-measuring-assessing…the status, stability, fragility, defensibility, and sustainability of intangible assets relative to (a.) their contributory role, value, and materiality, and (b.) specific projects, innovation, transactions, products, or services.
5. Elevating confidence in – adding predictability to…achieving negotiated- targeted results relative to the intangible assets in play, insofar as transaction-project outcomes.
6. Hesitance by organizational leadership to engage and safeguard their intangible assets…routinely manifests as attractive preludes for the materialization of risk which can adversely affect the terms, objectives, projected returns, and exit strategy for any transaction, project, product, or service.
To counter those seeming inevitabilities, organizations can…
a. Align intangible asset safeguards and monitoring…with (a.) core-mission specific objectives, (b.) risk management, and (c.) the assets’ respective contributory role, value, and materiality cycles.
b. Ensure their intangible asset safeguards reflect…what, when, where, how, and who asset losses and value-competitive advantage hemorrhaging is attributed or originate.
c. Re-negotiate – re-structure transactions…when substantive risks materialize that adversely affect key intangible assets in play, otherwise, asset holders will also be at risk.
d. Extend conventional intangible asset and IP valuations…beyond subjective ‘snap-shots-in-time’ and apply-leverage same to (a.) asset development, (b.) organizational culture, and (c.) specific products-services, i.e., knowledge management, balanced scorecard, etc.
e. Consider licensing key intangible assets…recognize a fuller range of (internal, external) events – circumstances (risks) which can materialize to impair, erode, and/or undermine the receptivity and value of intangible assets.
f. Reduce the probability…the momentum of a project, transaction, product, or service will be interrupted, stifled, or undermined by the materialization of risks which can (a.) ensnare and/or entangle assets in costly and time-consuming challenges, and (b.) compromise projected asset performance, value, and competitive advantage.
g. Invest in efforts to establish an intangible asset intelligent organizational culture…which is aligned – converged with the organization’s mission, business model, and objectives.
h. Create strong organizational resilience (continuity, contingency) plan…designed to (a.) operationally sustain mission essential intangible assets, (b.) provide quicker economic – competitive advantage recovery following a significant business disruption, risk, or natural disaster and (c.) expand organizational resilience decision options, parameters, and strategies for boards, c-suites, investors, and management teams to consider when substantive risks materialize.
* Stone v. Ritter – 911 A.2d 362, 2006 Del. LEXIS 597 (Del. Nov. 6, 2006)
Michael D. Moberly – September 13, 2018 – St. Louis – kpstrat.com – [email protected] – ‘Business Intangible Asset Blog’ (since May 2006) https://kpstrat.com/blog where one’s attention span, business realities, and solutions converge!
Readers are invited to examine other posts, papers, and books I have published at https://kpstrat.com/books/