I enjoy respectfully engaging business management teams and entrepreneurs from all sectors…regarding the intangible assets embedded in their business, especially, intellectual, structural, and relationship capital.
Not long ago, I had a particularly memorable conversation with a very astute senior executive who…I presume, intended no disrespect by suggesting, that the development, unraveling, assessment, and exploitation of intangible assets is, through her lens, a largely theoretical, not practical exercise which she could not recommend as being useful.
I am seldom taken aback by such ‘shoot from the hip’ and incorrect perspectives…I have heard plenty. There are several ways I choose to translate such utterances, i.e., I generally choose to translate them as the speaker lacks operational familiarity with…
- the 17 different types – categories of intangible assets (as articulated at this blog on numerous occasions.
- the very lucrative intangible asset side of their business, and
- the economic fact that today, and for the foreseeable future, 80+% of most company’s value, sources of revenue, sustainability, competitiveness, and reputation lie in – emerge directly from intangible assets.
So, obviously I disagree with her premise.
Unfortunately, there remain too many business leaders and management team members inclined to…dismiss the development, exploitation, and safeguarding of intangibles. Instead, their characterizations suggest intangible assets (a.) are best addressed in university lecture halls, and (b.) will not hold up to the rigors and speed required in today’s aggressive, competitive, go fast, go hard, go global business (transaction) environments.
Having taught in universities for 25+ years, I can say…without hesitation, that I have uttered the word ‘theory’ in a lecture hall, on only a handful of occasions.
On the few occasions I actually spoke the word ‘theory’ in a presentation to…a professional (practitioner) association or society (foreign or domestic), the audience’ initial reaction, if body language and facial expression are indicators, the intangible asset message they were about to be introduced, would have little, if any, relevance to their ‘real business world’.
Such initial reaction often held true, until the audience learned…about the 17 types-categories of intangible assets embedded in companies irrespective of sector, and essential to their growth, sustainability, and competitiveness.
Not wishing to have my message advocating businesses to exploit their intangible assets…reduced to the time-honored sport of ‘theory vs. reality’, I re-characterized the word ‘theory’ to represent well researched explanations of specific phenomenon, in this instance, the contributory role and value of intangible assets.
In my business reality...a theory is an expression of a concept or idea that is testable, replicable, and based upon well-grounded hypotheses. Even in the real world of business operation, management, economics, and organizational behavior, it is an…
- irrefutable economic fact that 80+% of most company’s ‘building blocks’ for growth, value, revenue, and sustainability are directly attributable to intangible assets, primarily variations of intellectual, structural, and relationship capital.
Characterizing theories in this manner has paid dividends to me…in my chosen professional endeavor to be one, if not the most knowledgeable intangible asset strategists and risk specialists, it’s still occasionally frustrating to witness, otherwise intelligent, experienced, and successful business leaders convey dismissiveness to this irrefutable and globally universal economic fact regarding the contributory role and value of intangible assets.
What’s more, it is frustrating too, when, on countless occasions…I find the naysaying business management teams are actually leading, unbeknownst to them, a company that is, by definition, intangible asset intensive and dependent!
What prompted intangible asset ‘think tanks’…i.e., Brookings Institution, Athena Alliance, IC Knowledge Center, the Intangible Asset Finance Society, In Re Steel, KPSTRAT, and others to engage business intangible assets, occurred, in part, by recognizing their very conspicuous contributory role in most all business transactions, along with the…
- need for effective stewardship, oversight, management, exploitation,
and monetization of the assets.
- forward-looking-thinking role for intangible assets in most every
business initiative, process, and/or transactions.
- unrelenting reality that conventional financial statements and
balance sheets no longer convey an adequate, nor complete picture of
a company’s entire (real) financial health.
The inclusion of a company’s intangible assets in…valuation, management, and strategic planning leads to a far more insightful portrait of any businesses current financial circumstance by comprehensively describing who, how, why, when, and where value, revenues, future wealth creation, and sustainability derive from intangible assets.
Thus, to respectfully appeal to the various business persons who remain reluctant to engage – skeptical of their company’s intangible assets, what follows are relevant and practical definitions of intangible assets, i.e., they are…
- unique blends of know how-based assets that variously intersect to support specific (often proprietary) methodologies, processes, best practices, and information sharing infrastructures. Adapted by Michael D. Moberly from the experienced work of Weston Anson, CONSOR
- interwoven – embedded processes, relationships, and operating culture in synchronized to market demands-conditions to differentiate businesses (in their market spaces-sectors) to create-deliver value, generate revenue, and build-sustain competitive advantages. Adapted by Michael D. Moberly from the fine work of Michael Porter, Harvard Business School
- economic benefits anchored in company processes, personnel, efficiencies, and/or programs that set a company apart from its competitors to create new and sustainable sources revenue and value. Michael D. Moberly
- at the center of all business innovation; they come at the beginning as ideas, at the middle as processes, and at the end as commercialization and distribution channels. Adapted by Michael D. Moberly from the many years of excellent work of Dr. Baruch Lev, NYU, Stearns School of Economics
Michael D. Moberly June 29, 2017 St. Louis [email protected], the ‘Business Intangible Asset Blog’ since May 2006, 650+ blog posts published, where one’s attention span, intangible assets, and solutions converge!
Readers are invited to explore other published blog posts, video, and position papers at https://kpstrat.com/blog