Michael D. Moberly June 28, 2008
We’re well into the 21st century and the role intangible assets’ are playing as value and growth creators is widely discussed, understood, and accepted at the 5,000 foot elevations in business communities globally.
At those elevations, it’s come to be a well known economic fact – business reality that steadily increasing percentages, perhaps as much as 75%, of a companies’ value, sources of revenue and future wealth creation have shifted from tangible (physical) assets to intangible assets, or, as the British sometimes refer to them as ‘invisibles’.
One question is, why isn’t this reality resonating – manifesting itself with a broader sense of urgency within the U.S. business communty, especially with small, medium size enterprises (SME’s), to the point they willingly engage in strategies to maximize and extract as much value as possible from the intangible assets those very companies have likely developed and continually, even routinely, produce?
Cutting to the chase, I, like other national voices advocating greater recognition and utilization of intangible assets, meet with astute, intelligent, and extraordinarily talented and successful business leaders who are apt to use sophisticated techniques to schedule employee work schedules to rightfully save overtime pay, but, mention the words intangibles or intangible assets and eyes glaze over!
What’s puzzling is, why aren’t these decision makers acting on this information, whether it comes from me or myriad of other sources? Why are these ‘within hands reach’ sources of value, revenue, and future wealth creation essentially being overlooked, neglected, or, in some instances, literally being dismissed?
In part, the lack of business enthusiasm for intangible assets may be attributed to:
1. accountants who may or may not fully grasp the contributory significance of intangibles (and reporting – accounting for same) therefore are reticent to introduce or explain the relevance of intangibles to clients…
2. faux strategic planning which is more akin to near term – quarterly-based perspectives that exclude discussions about better utilization of intangibles…
3. a tendency to develop explanations of intangibles that are synonymous with intellectual property to which business decision makers may attach little, or no relevance because they don’t have nor plan to have any IP…
4. a self-deprecating assumption by some business decision makers that their company possesses no valuable intangible assets, i.e., competitive advantages, proprietary know how, etc., worthy of the time necessary to identify and assess…
5. the mere lack of physicality of intangible assets…
6. consultants’ that inappropriately characterize the process of identifying, assessing, and extracting value from intangible assets as being far more complicated and time consuming than necessary, and I hasten to add, is the reality…
Understanding and taking affirmative steps to maximize and extract as much value as possible from the intangible assets a company has developed, is not rocket science, it’s just good business!
