Michael D. Moberly September 1, 2008
With all things intangible, as always, the starting point remains the same, that is, it’s essential for business owners and decision makers to recognize the indispustable economic fact – business reality that today, 75+% of most company’s value, sources of revenue, and future wealth creation lie in – are directly linked to intangible assets, i.e., intellectual property (IP), proprietary know how, competitive advantages, goodwill, reputation, brand, etc.
An intangible asset assessment is not merely a ‘warmed over’ (generized) version of an IP audit. Rather, an intangible asset assessments’ primary objectives are to…
1. serve as an efficient, methodical, and company specific procedure to identify, unravel, value, and ultimately bring (business) insight and clarity to a company’s intangible assets, i.e., utilization, leveraging, extracting value, and
2. objectively identify any gaps – disconnects that may exit relative to what’s necessary to sustain (protect, preserve) control, use, and ownership of those assets throughout their respective functional – life/value cycle.
In other words, an intangible asset assessment brings to the surface – sheds light on a company’s underlying, and, what I often refer to as its, real sources – drivers of value, revenue, and competitive advantage.
As a procedure, I advocate that an intangible asset assessment should not rigidly adhere to a preconceived or generic template, rather, the assessment should include protocols that are sufficiently flexible to reflect (identify, unravel) each company’s nuanced circumstances and the various contexts – formats in which its intangibles’ exist, including those produced and used internally, as well as, those acquired externally.
There are three additional objectives to be achieved when conducting an intangible asset assessment:
3. objectively identify and mitigate risks-threats that elevate the vulnerability of those assets to circumstances that are known to ensnare and/or entangle them in costly, time consuming, and momentum stifling legal challenges and disputes that can undermine and/or erode their value and competitive advantages…
4. objectively align the assets with the company’s core competencies, mission, and business strategy (vision)…
5. objectively identify practical and efficient strategies to better utilize, leverage, and/or bundle the intangibles to lay a strategic foundation for extracting as much value as possible from them!
Remember, the value, sources of revenue, and future wealth creation attributed to intangible assets, for most companies, ranges from 40% to as as high as 90+%!