Whenever Business Intangible Assets Are In Play…

The primary objective-outcome to any business transaction…i.e., marketing initiative, R&D project, or entrepreneurial startup is to produce – extract as much value, competitive advantage, and revenue as possible from the intangible assets in playhttps://kpstrat.com/wp-admin/post.php?post=1108

My experiences suggest the most appropriate starting points…for elevating the probability these objectives will occur as projected-desired is through recognizing and distinguishing (precisely) which intangible assets are (a.) most relevant, (b.) actually in play, and (c.) how to best to leverage-showcase those assets relative to their contributory value, superiority, marketing potential, and how they add value to each consumer’s experience.

Of course, effective – lucrative execution of each of the above…require management teams and business leadership to…  https://kpstrat.com/wp-admin/post.php?post=141

1.  also exhibit sufficient operational level familiarity with how, why, when, and where intangible assets are in play and,

2.  have intangible asset risk mitigation and safeguards (i.e., stewardship, oversight, management, and monitoring) practices in place that focus on sustaining control, use, ownership, and preserving asset value and brand integrity.

The rationale for doing each…is, all too frequently, management – leadership teams presume the dominance of intellectual properties, patents particularly. As such, many are inclined to overlook, dismiss, and undervalue the contributory (underlying, integral) role intangible assets make to product-service value, competitiveness, and standing given relative to transactions when IP (transfer, sharing, relinquishment, or probability of infringement) are negotiable components.  https://kpstrat.com/wp-admin/post.php?post=301

Through numerous engagements, I have found most intangible asset oversights and under-valuations, etc…can be best described in the context of a continuum, one part of which lies with intangible assets’ lack of conventional sense of physicality.  This absence of a conventional physicality, in my judgment, is often a prelude to intangible assets remaining unrecognized or wholly dismissed and not as the routine embeds they actually are, in most every business (proprietary) operation, process, function, and/or transaction.

Too, intangible assets often fall under conventional business radar…which unfortunately (business radar) remains more fixated on the tangible – physical (assets) by virtue of their being conducive to human sensory mechanisms ala touch and sight.  Whereas, intangible assets are typically sensed and influenced, i.e., relationships, experiences, feelings, the visual-sensual aura conveyed by a specific environment, and reputation, etc.

Readers, please don’t lose sight of this undisputable and irreversible economic fact…80+% of most company’s value, sources of revenue, competitiveness, and sustainability today lie in – emerge directly from intangible assets. Business decision makers accepting of this economic fact recognize their obligatory – fiduciary responsibilities to their intellectual, structural, and relationship capital-based intangible assets and intellectual properties, as constituting business decisions which are supported, not necessarily lead by, legal processes.

Other obligations for decision makers when their intangible assets are in play include recognizing…

1.  the time frames when the most value can be realized-extracted from intangibles and IP continues to be compressed relative to each assets’ life, value, and functionality-materiality cycle.

2.  for the foreseeable future, the illicit trade and economic benefits derived from infringement, misappropriation, and counterfeiting of intangible assets and intellectual property will remain more lucrative than originating.

3.  patents especially, are (a.) no longer consistent indicators of asset – company value, (b.) readily disregarded and circumvented by a growing global cadre of ‘legacy free players’, and (c.) can advance a company only so long as indeterminate control, use, ownership, and value can be sustained.

So, today, measures to safeguard – preserve the value of intangible assets…must now reach well beyond the conventional enforcement protections afforded through conventional forms of intellectual property, i.e., patents, copyrights, and trademarks.

For context, there are two primary forms of intangible assets, i.e., there are…

1. Legal intangibles that generate – serve as the basis for establishing legal property rights to intangibles which are defensible in courts of law.  Examples include trade secrets, copyrights, patents, trademarks, and goodwill, etc. Legal intangibles often serve as the keys to a company’s long term performance and sustainability.

2. Competitive (advantage) intangibles which are not typically subject to legal ownership insofar as having  protective enforcements to deter – prohibit others, perhaps competitors and other forms of legacy free players from duplicating and applying, i.e. infringement.  Consider, if you will, Harley-Davidson Motor Cycle’s efforts to secure a legal distinction to the purposeful sounds made by Harley engines, especially during engine acceleration.

  • Human intellectual capital (intangibles) are most frequently designed-embedded in products and/or services to manifest as competitive intangibles, from which, obviously, specific competitive advantages are projected –  intended to emerge.
  • Competitive advantage intangibles’ contributory role and value manifest as effectiveness, consistency, efficiency, productivity, customer service, and consumer satisfaction, etc.

More specifically, intangible assets and the competitive advantages they produce…

1. manifest as economics arising from distinctive features, processes, or programs that set a company apart from its competitors. Michael D. Moberly

2. any personalized (consumer) competitive advantages may evolve over time and are not always the result of a planned action or the product of specific capital allocation decisions. Michael D. Moberly adapted from Brookings Institution’s Understanding Intangible Sources of Value

3. are at the center of all innovation, they come at the beginning of the process (as ideas), at the middle of the process (as patents), and, of course, at the end of the process (as commercialization and distribution channels). Dr. Baruch Lev, NYU, Stearns School of Economics

4. are the unique blend (combinations, collections) of activities, assets, relationships, history, and market conditions that an organization exploits in order to differentiate itself from its competitors, and thus create value. Michael Porter, Harvard Business School

5. lie increasingly in unique and proprietary knowledge products possess – deliver to consumers, and the special value that comes with the unique understanding of that knowledge that provides a real (competitive) edge. Adapted by Michael D. Moberly from the McKinsey Quarterly , 2004

6. largely evolve from getting an idea to the market first, and for some companies, the source of value is that race to market, not the permanent protection of intellectual property. Adapted by Michael D. Moberly from the fine work of Peter Likins

Michael D. Moberly May 24, 2018 St. Louis [email protected] ‘The Intangible Asset Blog’ https://kpstrat.com/blog where one’s attention span, intangible assets, and solutions converge!

Readers are invited to explore papers, blog posts, and  books I have produced-published at https://kpstrat.com/books

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