- ‘if I can kick it, drop it, or stub my toe on it, then it’s a tangible (physical) asset’.
Presumably then, if one can do none of these…it’s an intangible asset. That is to say, intangible assets are generally absent a conventional sense of physicality, e.g., they consist of…
- blends or combinations of procedures, assets, relationships, or culture embedded in a company’s distinctive and often times proprietary processes, procedures, or practices that create efficiencies, facilitate/enhance internal – external relationships, provide special edges/advantages in the market place and/or be leveraged to differentiate a company from its competitors, and thus create value.
- knowledge a company and its employees possess and the special value that comes with understanding how to use/apply it best.
Examples of intangible assets…
1. Internally developed software, customized data bases and/or business processes that create efficiencies, enhance customer service and loyalty, and reduce errors, etc…
2. Unique equipment designs that create efficiencies and produce higher quality products with fewer defects and deficiencies…
3. Specially designed distribution systems and supply chains that get products and/or services to customers and clients faster, better, cheaper…
4. The findings/analysis of competitor – market research and/or focus groups about your company’s products, services, and/or launches…
5. Targeted communication systems that elevate – enhance customer/client awareness, relationships, and loyalty for a company, its brand, products, services, and employees…
6. Real estate zoning rights and permits that provide the all important, location, view, proximity, and prestige…
7. Custom designed training materials and/or procedures that rapidly assimilate new employees for delivering timely and effective service – responses to customer/client questions, problems, or concerns…
8. Domain names and venue naming rights that distinguish a company in the ‘eyes’ – minds’ of both existing and prospective clients and customers, and keep a company’s brand ‘top of mind’…
9. Distinctive website designs with secure use and e-commerce features that provide range of experiences customers/clients want and expect…
10. Corporate (identity) logos (products, brands, etc.), including trade/service marks and trade dress that distinguish a company from its competitors…
11. Contracts and agreements that have a definable life span and/or exclusivity that provide consistency and desirable expectations to benefit employees, customers, clients, vendors, suppliers, etc…
12. Patents, copyrights, and prior art searches, that provide an owner/holder with effective legal standing, and position same to reap the economic benefits from their work product and legally pursue infringers, counterfeiters, and misappropriators…
13. Product R&D studies and related documentation that provide definitive insight about ‘what works and what doesn’t work’ which saves time, money, resources, and staff time…
14. Transferable and legally defensible non-compete and non-disclosure (confidentiality) agreements that reduce the probability valuable proprietary know how, trade secrets, and sensitive information will be revealed…
15. Special employee expertise, distinctive business processes, technical know how, and positive relationships with clients, customers, suppliers, and vendors that facilitate-enhance product/service sales, and company image, goodwill, reputation, and create efficiencies…
To be sure, there are many more (company specific, nuanced) intangible assets than what’s listed above…but, all too frequently, the various contributions’ intangible assets make to a business are overlooked, neglected, or outright dismissed.
Too, the contributory roles and value intangible assets produce-deliver to business value, competitiveness, revenues, and sustainability are often obscured…by intangible assets’ (a.) absence of physicality, and (b.) not knowing precisely where and how intangibles ‘fit’ on balance sheets.
Consequently, and with some frequency…their proprietary competitive advantage features often go unrecognized, undervalued, or not valued at all.
In most company’s, intangible assets are akin to…the proverbial ‘hand in front of our face’. That is, they are often embedded in (a company’s) routine operations, processes, and functions but still fall under conventional ‘mba precepts’ that tend to focus on tangible (physical) assets.
Just as frequently, company’s consider – engage transactions…in which the intangible asset components go unnoticed and therefore, may never be effectively or profitably exploited.
This is why it is beneficial for company c-suites, board’s, D&O’s, business unit manager’s, etc., to…acquire operational familiarity with intangible assets. The objective, of course, is to position – exploit a company’s intangible assets in order to exploit-extract as much value as possible.
Ultimately, if an asset, intangible or otherwise, adds value…and is the source of revenue and contributes to a company’s competitiveness and sustainability, it becomes a fiduciary obligation to put forth the necessary effort to sustain (safeguard, preserve) control, use, ownership, and monitor the assets value!
Michael D. Moberly April 3, 2009 St. Louis kpstrat.com [email protected] ‘Business Intangible Asset Blog’ where attention span and action really matter!
