Michael D. Moberly October 24, 2008
Some decision makers in SME’s (small, medium enterprises) and SMM’s (small, medium multinationals) find (a.) the phrase ‘knowledge-based economy’, and (b.) contemporary economists’ view that 75+% of most companies’ value, sources of revenue, sustainability, and future wealth lie in – are directly linked to intangible assets to be more cliche’ than reality and more relevant to Fortune 500 types of companies’ perceived to be rich in intellectual property, know how, and R&D.
Frankly, I don’t share that reality, but do advocate this reality; unless and until c-suites, D&O’s, shareholders, and investors in SME’s and SMM’s begin to practice (a.) more consistent management, stewardship, and oversight (to sustain control, use, ownership, and value) of their intangible assets, and (b.) recognize (give credence to) practical strategies to leverage and exploit the ‘veritable goldmines of un-acknowledged and unutilized intangible assets’, (Kenan Patrick Jarboe) such perceptions will likely persist. The result will be tremendous unrealized value being left ‘on the table’ untouched and available for others (competitors, adversaries, acquisitions) to capture and exploit!
In respectful defense of SME and SMM decision makers, many do not, as yet, have the means or perhaps inclination (internally) to turn (their) intangible assets into potentially revenue generating assets. In addition, business decision makers are generally realists, that is, they recognize that before embarking on an initiative such as this, three things, at minimum, must be in place (up front) before they take the time and devote the resources to identifying, unraveling, assessing, accounting for, and ultimately disclosing their intangible assets:
1. incentives, i.e., specific tax advantages and direct (immediate) financial inducements, etc., and/or
2. mandates by regulatory agencies (every company begins doing it), and
3. practical – relevant – useable training, i.e. having a strong internal familiarity with intangibles and how to identify, unravel, assess, leverage, and exploit (maximize and extract value from) them.
While the parameters of #1 and #2 would require (federal, state) legislative action, #3 is essentially independant. That is to say, forward looking – forward thinking c-suites should be obliged, on a fiduciary plain, by their boards, stakeholders, and business units, etc., to proceed now toward achieving a level of familiarity with intangible assets that enables them to regularly (at will) engage their companies’ intangibles through effective stewardship, oversight, management, and monitoring to maximize and extract as much value as possible.