Intangible Assets Not One-Size-Fits-All

Michael D. Moberly    May 27, 2014     ‘A long form blog where attention span really matters’.

Intangibles’ are inherently nuanced…

Because intangible assets are inherently nuanced in terms of how they evolve and ultimately come to be used or applied in companies, especially intellectual, structural, and relationship capital, they are not well suited for one-size-fits-all or snap-shot-in-time management.

This makes it all the more prudent for company management teams to achieve the necessary familiarity with intangibles’ company-operation specific elements, e.g.,

  • how, where, or from whom they originated.
  • their development, maturation, and eventual utilization path, and how to
  • identify, unravel, and differentiate each assets’ contributory value such as competitive advantages, a source of revenue, and efficiency creation, etc.

Intangible asset management has shifted to fiduciary obligations…

It is for these and many other reasons that I urge company c-suites to consider intangible asset management as having shifted from merely being optional ‘nice to have’, but not absolutely necessary skill sets for their management team members to possess, nor skill sets that should be left solely to personal motivation and far sightedness to acquire. Today, these skill sets have become very much akin to genuine fiduciary obligations if not responsibilities.

This level of managerial dexterity and awareness are essential now insofar as representing consistent bases to effectively and profitably operate intangible asset intensive companies, particularly in globally competitive, aggressive, and predatorial business management and transaction environments in which intangibles’ are consistently in play.

Overtime, as management teams’ operational familiarity with intangibles’ elevate, sufficient clarity will be achieved to recognize and distinguish the most effective, lucrative, and strategic path options in which to engage and put a firm’s intangible assets to work, and, with greater assurance they will remain so. Whether management teams conceive and frame their operational familiarity in a ‘roadmap; (visual) context viewed through conventional business lens, or as a ‘mosaic’ (big picture), the message remains the same…

any business decision maker, regardless of their specialization, professional experience, or job title, are, as it were, ‘fiduciarily’ obligated to acquire and remain current in the stewardship, oversight, and management of their firms intangible assets!

Remember, 80+% of most company’s value…

Of course, the economic fact that underlies these managerial obligations are that 80+% of most company’s value and sources of revenue today lie in – evolve directly from intangible assets generally irrespective of a company’s size, maturity, annual sales, sector, innovation, or receptivity to risk.

Key business operating perceptions need to be addressed…

While achieving these hopefully self-evident managerial expectations will absolutely aid management teams to ’put their company’s intangible assets to work’, there remain, what I call, a few key business philosophy hurdles and misconceptions that routinely need to be simultaneously overcome, six of which are…

  1. the assumption that intangible assets are merely another term for or form of intellectual properties, patents particularly.
  2. the stewardship, oversight, and management of a company’s intangible assets are exclusively legal, accounting, or IT processes and responsibilities.
  3. decisions and actions affecting how a company’s intangibles can – are to be used, represent genuine business decisions to be made in concert with security, risk management, legal counsel, accounting, and IT.
  4. intangible assets and their (stewardship, oversight, and) management are not the sole province of large, multi-national, Fortune 1000’s and thus irrelevant to startups or small, medium size firms.
  5. there is a correlation between the intensities embedded in today’s go fast, go hard, go global business development and transaction environment which are integral to – underlie the knowledge (intangible asset) based global economy.
  6. unlike patents, trademarks, and copyrights, there are no certificates issued by the government that tell business owners and decision makers ‘these are your intangible assets’.

Ultimately, responsibility for identifying, unraveling, assessing, safeguarding, managing, mitigating risk, and lucratively exploiting a company’s intangible assets while being aligned with a business’ strategic plan, lie solely with company management teams. So, at minimum, understanding what intangibles’ are, how they develop as structural, intellectual, and relationship capital and the ability to consistently assess and promote their contributory value and commercialization (monetization) potential is paramount.

Yes, I am a strong advocate of engaging and utilizing intangible assets as comprehensively as possible. But, I caution readers to not characterize intangibles’ as constituting a proverbial silver bullet or assume they can be effectively captured by applying a one-size-fits-all template and assume success will be achieved.

So, unless and until management teams, boards, investors, stakeholders, and other business decision makers begin demanding that (their) company’s intangible assets ‘be taken out for a ride’, it’s likely a company’s intangibles will likely remain idle, taken for granted, and otherwise left unused, under-valued, and vulnerable to a global array of competitors and other forms of risk to acquire and use at their will.

As always, reader comments and perspectives are welcome here in St. Louis.


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