Michael D. Moberly – January 31, 2024 – Business Intangible Asset Strategy & Risk Mitigation – Founder, Business Intangible Asset Blog & kpstrat
This post is about business leaders, management teams, boards, and investors’ (fiduciary) obligations to differentiate, safeguard, monitor, and mitigate risk to their ‘mission essential’ intangible assets, e.g., reputation and brand.
That’s because, if – when particular-risks materialize, they routinely do so (a.) asymmetrically, (b.) at the will and timing of others, and (c.) include warnings, threats, fears, uncertainties, and/or doubts (WT-FUD factors). Routinely, they are directed to a business’s leadership, mission, reputation, alliances, products, or services.
The undermining effects which such assertions can potently cascade @ keystroke speeds throughout the targets’ value chain. This obliges self-protective responses to try to steady and clarify reputation, mission, competitiveness, valuation, and revenue generation.
This post counters – mitigates such risks by encouraging leaders, et al, to acknowledge that businesses, across sectors, irrespective of size, stage, sales, location, products, or services, are increasingly and irreversibly intangible asset intensive, dependent, and reliant,
That is, reputation, brand, image, goodwill, and standing are intangible assets largely conveyed publicly by – through operating culture and marketing campaigns.
This business economic – operational reality translates to 70 – 80+% of most business’s valuation, competitiveness, and revenue generation capability, etc., lie in – derive directly from intangible (non-physical) assets. Intangibles | Brookings – Unseen Wealth: Report of the Brookings Task Force on Intangibles on JSTOR – Intangible Assets: Computers and Organizational Capital | Brookings)
Intangible assets are embedded with various forms, contexts, and applications of unique and often proprietary…
- intellectual capital (knowledge, know how),
- structural capital (processes, procedures)
- relationship capital (marketing, associations, alliances), and
- IP (issued intellectual property, i.e., patents, copyrights, trademarks, trade secrets).
For business leaders, management teams, boards, and investors the paragraphs above are obliged to be interpreted as…reputation, image, perception, goodwill, and a resilient and sustainable operating culture, etc. are inextricably linked. That is, they are influenced by and embedded with various intangible assets, as described above.
Hence, the importance attached to developing the right sets – collaborations of intangible assets, introducing-applying same at the right time, in the right way, at the right cost should not be understated. And, safeguarding – mitigating risk to same, should always be considered ‘mission essential’.
Safeguarding – mitigating risk to any business’s ‘mission essential’ intangible assets is important. For example, those unique intangibles which have been developed internally, held and applied proprietarily, and relied for business – brand differentiation and valuation, etc., should be interpreted, accordingly.
That is, intangible assets differentiated – designated as ‘mission essential’, should not be treated via conventional practices or procedures. In other words, they should not be treated as if they…
- are tangible (physical, fixed) assets.
- hold only limited time-durations of contribution and valuation.
- are receptive to contingency or convergence practices of risk mitigation and management.
Contingency approaches to addressing business risk are inclined to be focused on the probability, and perhaps less on nuanced – current vulnerabilities and criticalities of risk materialization perceived to occur singularly, in (a.) relative isolation, and (b.) with obvious – known preludes, circumstances, conditions, or adversities, etc.
- for example, tornadic weather event, wherein, there are ample experience and mechanisms for public alerts, warnings, and real time doppler radar tracking, and projecting course, timing, and damage effects, etc.
- unfortunately, tornadic (touch down) events can emerge rapidly and present few risk avoidance options, aside from contingencies of when – where for people to take shelter.
- tornadic activity can quickly subside, followed by hoping there is no loss of life, attending to the injured, retrieving personal possessions, assessing damage to property, and interacting with insurance entities.
- often holding heartfelt beliefs-perspectives that the event was ‘once in a lifetime’ and comes no probability of repeat. Hence, an often times emphasis on contingencies for ‘one off’ events, as destructively tragic and irreversible as they may be.
Convergence approaches to addressing business risk are inclined to be rooted in presumptions – conventions wherein there is little, if any differentiation of-to-for risk materialization.
That is, the causes of risk, and thus, avoidance, mitigation, and management are considered, comparable, and therefore may not warrant presumed time, cost, and/or disruption to differentiate for business things intangible. Such perspectives are inclined to allow most-all risks to be treated similarly, ala convergence.
These analyses of contingency and convergence approaches rise from 20+ years of experience + research + publishing as a business intangible asset strategist and risk mitigator across sectors, and reflect…
- how – why some business leaders – management teams remain inclined to conceive, frame, execute, and describe what is expected from risk avoidance, mitigation, and management practices, which are likely to fall short.
Instead, business leaders, management teams, and boards (collectively), and investors (exceptionally) are (fiduciarily) obliged to recognize that risk to reputation, and other ‘mission essential’ intangible assets, once materialized, can…
- produce uniquely confusing circumstances while cascading, not tactically or locally, but strategically throughout a business’ value, supply, and user chains.
This is why this blog draws attention to and places emphasis on differentiating, safeguarding, and mitigating risk to business’s ‘mission essential’ intangible assets.
Thus, less attachment to conventions which may include pre-conceived, standardized, indistinguishable perspective about risk to intangible vs tangible assets. And, their vulnerability to, the probability, and criticality, should risk materialize
More attention to intangibles which measurably contribute to competitiveness, valuation, reputation, operating culture, revenue generation, and sustainability, And, favorably effect brands, products, and services. Therefore, they should be reasonably resilient and recoupable (remain intact) if/when particular – shouts, shouters, and/or shouting ‘come a calling’.
Special insights regarding business risk, and contingency – convergence theories for risk mitigation, were gleaned from the fine work and research of Dr. Brian Klaas, Professor in Global Politics at University College London. Dr. Klaas’ work include numerous books which I encourage all to consider. https://www.google.com/search?q=fluke+chance+chaos+and+why+everything+we+do+matters+by+brian+klaas&sca
Posts @ Business Intangible Asset Blog present various ‘risk realities’. Each warrant attention of business leaders, entrepreneurs, R&D administrators, management teams, boards, and investors across sectors. Mitigating (reacting, responding to) the often ‘public – viral’ risks and challenges produced by reputational risks, are obligations with little room or time for equivocation or error.
.The Business Intangible Asset Blog was created in 2006 and now includes 1100+ topic specific posts. Each is intended to provide readers, ala business leaders, management teams, R&D administrators, boards, and investors, etc., with reliable insights on most matters related to business things intangible.
Posts at Business Intangible Asset Blog are developed – written solely by Mr. Moberly and are intended to draw attention to the development, application, management, safeguards, and risk mitigation of business’s ‘mission essential’ intangible assets.
Readers are respectfully invited to explore other posts, along with books and papers available @ ‘Home – kpstrat
