To realize advances in how, when, and where businesses utilize-exploit their intangible assets…more clarity regarding their contributory roles to (a.) (business) value, (b.) creating sources of revenue, and (c.) building competitive advantages, etc., should influence more management teams, c-suites, boards, and investors to engage these extraordinary non-physicals!
I have had the good fortune over the years, to encounter numerous… business persons during client engagements, while conducting professional seminars, making presentations to professional associations, or through my blog, wherein…
- otherwise sophisticated, talented, and financially successful practitioners exhibit-express challenges, insofar as ‘crossing the chasm’ from the tangible to the intangible.
Through my lens as an intangible asset strategist and risk specialist…I find, an essential, but often unforgiving starting point for achieving operational – managerial level familiarity with the intangible asset-side of any business, ala sustainability, value, revenues, and competitiveness.
In other words, a businesses ‘non-physicals’…ala its intangible assets largely emerge from respectful – prudent exploitation of intellectual, structural, and relationship capital and other types-categories of intangible assets, is the fundamental – underlying requisite.
Yes, the language, i.e., metaphors, analogies, and examples used by intangible asset purists to define – characterize…the attributes of non-physicals, may be variously elusive in part because intangibles are too frequently framed in obscure contexts which moderate, if not impede, organization-wide understanding and receptivity…
- for example, language often used to describe intangibles, characterizes them as non-physical ‘things’ of value that have no conventional sense of physicality, no set monetary value, and are not reported on balance sheets or financial statements.
Admittedly, obscure characterizations such as this while they may be technically correct and aligns with conventional accounting and valuation standards…actually, do little, in my view, to engender sufficient managerial-operational confidence (in-for intangibles) that can readily translate to business mission resolve to…
- aggressively engage and exploit a businesses intangible assets, irrespective of the fact that most (intangible assets) originate, develop, and mature internally.
This is particularly evident among business leadership and management teams who…are inclined to assume ‘engaging intangible assets’ requires substantial organizational disruption, resources, time, and a receptive company culture.
I served as a keynote speaker for a professional association group in London (UK) several years ago…in which the audience exhibited genuine curiosity about safeguarding intangible assets, which the British commonly, but respectfully, refer to as ‘invisibles’ which perhaps, may be an apropos characterization – context for the U.S. business community as well.
In speaking engagements, and in writing, this intangible asset strategist assumes a responsibility to…try to bring commonality to operational clarity-familiarity to intangible assets that resonates regardless of the venue, circumstance, or type of engagement.
- that responsibility includes articulating current and relevant rationales and examples, e.g., value propositions, projected returns, measurability of intangible assets’, their contributory role and value, and sources of revenue, etc.
To mitigate as much (business) operational ambiguity, as I am able, about identifying and exploiting intangible assets…and elevate receptivity to both clients and audiences, this strategist relies on a ‘roadmap’ methodology to aid users to distinguish…
- what intangible assets are and what they are not.
- the various types, categories, and manifestations of intangible assets.
- where, how, when, and why intangible assets originate, develop, and mature.
- the various ways intangible assets contribute to businesses as sources of value, revenue, and competitive advantage, etc.
- strategies to assess and exploit intangible assets internally and externally (commercially) relative to their respective life, value, functionality, and materiality cycles.
Still, it’s not infrequent that I observe the experienced and astute business leader – management team member…exhibit reluctance-hesitancy to fully engage their intangible assets, especially when operational ambiguities – questions remain which frequently manifest (intellectually) as risks.
I have enjoyed many opportunities and privileges of initiating and/or becoming involved in…engagements – conversations (regarding businesses intangibles) which I respectfully label as go fast, go hard, go global, get to black!
- Not surprisingly, in most, terms associated with competitive advantage, efficiency, innovation, space, and creativity, etc., are routinely uttered.
- I am respectfully confident these, and other terms are substitutes, equivalents, or perhaps even proxies for intangible asset products and outputs, albeit unrecognized and unattributed at the time.
But, so long as the word ‘intangible’ is not consistently attached to – followed by the word ‘asset’…this (intangible asset) strategist and risk specialist assumes an obligation to continually examine the manner-in-which I apply these words (i.e., intangible assets) in business discourse, public speaking, client engagements, and especially, in my published writing.
Still, with some frequency, I find astute, experienced, and successful practitioners inclined, at least initially, to…minimize, or even dismiss intangible assets’ contributory role and value to their company, and almost universally rationalize doing so because intangible assets…
- are seldom, if ever, distinguished or reported on balance sheets or financial statements, so what’s the return for engaging them?
- through their ‘near term’ lens, intangible assets remain largely theoretical, and therefore not legitimately actionable to company operating agendas.
Such minimalism, of course, overlooks – disregards the economic – competitive reality that...most organizations, whether they recognize it or not, or otherwise brought to their attention…
- routinely create, use, and ‘bank’ substantial amounts of intangible assets.
- which manifest in various form, e.g., intellectual, relationship, structural, cultural, experiential, competitive, entrepreneurial, and reputation capital.
Absent, operational clarity and familiarity with intangible asset originated – premised outputs…a municipal (public) utilities department, for example, may be inclined to characterize the services they deliver merely as quarterly, seasonal, or annual (line item types of) outputs, i.e., the number of streets repaired, sewer systems cleaned, tons of snow removed, etc., but, to be sure…
- political expedience attaches to such recognizable quantifiers.
- unfortunately, there is seldom, if any mention of the intangibles that accompany each of these deliverable outputs.
Instead, when a public street zoned for single family homes…receives a ‘facelift’, i.e., perhaps a tree lined median, pavement re-surfacing, installing turn lanes, new illumination, sidewalks, etc., these seemingly tangible aspects to the facelift…
- will produce an array of ‘value adds’ which intangible asset savvy property owners,
- favorably affected by the facelift, can and should exploit early and immediately to benefit their economic – competitive advantage.
Michael D. Moberly July 7, 2017 [email protected], the ‘Business Intangible Asset Blog’, since May 2006, 650+ published blog posts, read in 137+ countries, ‘where one’s attention span, businesses intangible assets and solutions converge’.
Readers are invited to explore other published posts, video, books, and position papers at https://kpstrat.com/blog