This is an economic fact – business reality that is irreversible and which security executives are obliged to recognize…80+% of most company’s value and sources of revenue lie in – emerge directly from intangible, not tangible assets.
Intangible assets’ key ingredients are intellectual, structural, and relationship capital…a percentage of which will likely be designated as proprietary at some point, and they become very valuable contributors to more company’s sustainability, particularly those which are intangible asset intensive and dependent.
Routinely, these ingredients (intellectual, structural, and relationship capital) will…collectively and collaboratively contribute to producing other, increasingly valuable, intangible assets such as brand, reputation, intellectual properties, and competitive advantages, etc.
Collectively, this makes the line between companies meeting their objectives and fighting for their financial survival…increasingly dependent on their foresighted ability to (a.) recognize the intangible assets they producing and/or acquiring, (b.) how to utilize – exploit the assets best, (c.) extract (leverage) as much value from the assets as possible, (d.) for the duration of their respective life, value, and functionality cycles, (e.) while sustaining exclusive rights, i.e., possession, control, and use. Obviously, these are not simple (fiduciary) obligations.
Security executives’ can make substantive contributions though to…sustaining control, use, ownership, value, and defending intangible assets from the persistent global risks perpetrated by cadres of aggressive, variously organized, and predatorial economic – competitive advantage adversaries. But, this too, is not always a simple task, but, certainly one that is wholly necessary.
Why this is important…
1. There is no other time in business governance history when (a.) larger percentages of value, sources of revenue and future earnings potential are more deeply rooted in company’s intangible assets, and (b.) effective stewardship, oversight, management, and safeguards for those assets are more essential to maximizing and extracting value and sustaining a company’s competitive position.
2. Intangible assets, unfortunately, and for many reasons, still frequently fall under conventional business’ radar. All too often, the contributory role and value intangible assets deliver to companies go unrecognized, are variously dismissed, and undervalued. In part, such oversights are linked to (a.) most intangible assets lack a conventional sense of physicality, and, by extension, accountability, and (b.) managing and safeguarding a company’s intangible assets is tantamount to managing of a company’s present and future sources of value, along with its competitiveness, sustainability, and competitive advantages.
3. The time frames (windows) when the most value can be extracted (realized) from a company’s intangible assets is often (a.) subject (vulnerable) to being compressed by numerous (often extraneous) factors, variables, actions, behaviors, and events perhaps best characterized in go fast, go hard, go global contexts, (b.) the ease and relatively low cost which others can enter and compete in a comparable market space, (c.) the rapid and substantial profits which are routinely achieved by global economic – competitive advantage adversaries applying infringed intangible assets produce and introduce counterfeited goods and products into otherwise legitimate supply chains, and (d.) the value of intangible assets is variously perishable and often times non-renewable, i.e., once an asset has been compromised (infringed, stolen, misappropriated) economic – competitive advantage hemorrhaging can commence immediately, globally, and seldom ‘can the genie be put back in it’s bottle, whole’!
4. Legitimately registered patents, trademarks and copyrights (a.) no longer serve as (stand alone) deterrents or safe harbors from global networks of infringers and counterfeiters, (b.) are no longer consistent indicators of company or project value or assurances of transaction success or profitability, and (c.) can advance a company only so long as they’re converged with other safeguards specifically designed to sustain control, use, ownership, and value for the duration of their respective life-value-functionality, and materiality cycles.
5. Global networks of data mining and predatorial business intelligence operations can rapidly undermine competitive advantages and strategic planning to erode intangible assets contributory role, value, and materiality to a transaction, project, or initiative.
What is necessary to do, now…
1.Bring (business) clarity to the range of options – strategies which security – asset safeguard teams can contribute.
2. Treat intangible assets in business and revenue conversion contexts. Doing so will aid in conceiving and more fully capturing the assets value.
3. Treat the control, use, ownership, and contributory role and value of intangible assets as business and financial decisions, not dominated by legal processes.
4. Develop proactive models for security and asset safeguard teams to make substantive and measureable contributions, e.g., (a.) monitoring, mitigating, and minimizing risks which, when materialized, will adversely affect asset control, use, ownership, value, and brand integrity, (b.) monitoring any fluctuations is asset value and materiality relative to their contributory role to current and future projects.
Readers are invited to explore other resources I have produced – published, i.e., papers, blog posts, and books at https://kpstrat.com/books