Today, business management teams are fiduciarily obliged to…recognize that most every business transaction and/or initiative considered or undertaken, irrespective of company size or revenues, will be intangible asset intensive and dependent!
One consequence, is that company management teams will find prudence in ensuring intangible asset strategists and risk specialists are…invitees to transaction planning. And, once ‘at the table’, their assessments, experiences, and insights should be given due attention relative to enabling a more secure, stable, competitive, and lucrative transaction outcome, as it was initially envisioned! In other words, a company’s intangible assets are going to be in play.
As intangible assets become more recognizable…insofar as consistently playing integral and contributory roles in business transactions, value creation, and revenue generation, etc., their exposure (vulnerability) to various types-levels of risk elevate. So today, it’s not merely prudent, rather, rapidly becoming quite correctly characterized as a fiduciary responsibility for business – transaction management teams to:
- include intangible asset specialists and strategists skilled in the art and science of thwarting and mitigating risk and conducting pre – post transaction due diligence on intangible assets having a bearing on a transaction’s outcome
- be alert to an ever-increasing volume and sophisticated array of risks to intangible assets which, when – if they materialize, can rapidly undermine and/or erode asset value, competitive advantages, and projected synergies and efficiencies of a projected transaction, and
- cascade throughout any business’s increasingly tentacled consumer – supply chain, or, worse, cause certain intangible asset value ‘to go to zero’!
It’s no longer merely prudent…its essential for those undertaking for those undertaking any new business initiative and/or transaction to recognize that in most, if not every circumstance, how intangible assets are played, will effect-impact the outcome.
For this reason, I urge business -transaction management teams to…include, at the outset, expertise in the array of circumstances in which their intangibles are in play (see website definitions, explanations, categories titled, ‘What Are Intangible Assets’).
At minimum, intangible asset specialists are professionals possessing skill sets for…
- identifying, unraveling, and safeguarding intangible assets, especially, those identified as being integral to lucrative – competitive transaction outcomes.
- distinguishing transaction risks, which, if materialized, can stifle a deals’ momentum and/or undermine important assets’ projected value, competitive advantages, and synergies.
- articulating relevant-favorable (off-setting, mitigating) modifications to the terms of a transaction when risks are revealed that jeopardize asset projected values, synergies, or expected efficiencies, etc.
- executing effective, yet unobtrusive measures that effect re-negotiated transaction – contractual codicils to ensure retention, control, use, ownership, and monitorability of value and materiality of key assets in both pre, and post transaction contexts
There is an effective argument to be made that intangible asset strategists and risk specialists today are…
- comparable to industry sector (Wall Street) analysts who assess and monitor relevant variables, e.g., trends, events, cycles, and risks relative to
- intellectual, structural, relationship, and competitive capital.
- innovation – supply chain pipelines.
- the full range of intangibles relative to their near – long term stability, sustainability, fragility, and volatility.
The premise, of course, is that…as intangible assets become more recognizable and play more integral and contributory roles in business transactions, their value and exposure (vulnerability) elevates. So now, it’s not merely prudent, but rapidly becoming quite correctly characterized as a fiduciary responsibility for transaction management teams to:
- include intangible asset specialists and strategists skilled in the art and science of conducting due diligence on intangible assets that are increasingly in play and/or part of a deal.
- be alert to an ever increasing and sophisticated array of risks and threats when materialized, can rapidly undermine and/or erode asset value, competitive advantages, and projected synergies and efficiencies, or, worst case, cause certain intangible asset values ‘to go to zero’
Michael D. Moberly August 29, 2017 [email protected], the ‘Business Intangible Asset Blog’ since May 2006, 650+ published posts, ‘where one’s attention span, businesses intangible assets, and solutions converge’.
Readers are invited to explore other published posts, books, position papers, and videos at https://kpstrat.com/blog