Despite living in an age of intellectual capital, most boards have little visibility of the strength and value of their intangible assets.
Despite living in an age of intellectual capital, most boards have little visibility of the strength and value of their intangible assets. When intangibles are dominant value drivers, this is beyond nonsensical - it’s reckless!
Poor visibility of asset strength and value compromises a board’s ability to mitigate value at risk and evaluate corporate strategy.
Here are seven straightforward questions to help gauge your performance in intangible value-management:
Managing intangible value at risk:
1. What is the dollar value of your technology, brand, content and customer assets? (And how big a contribution does each make to enterprise value?)
2. What measures do you use to track the commercial strength of these assets, and to provide early warning of erosion in competitive advantage?
3. Are your intangible assets underpinned by adequate legal protection? What stops them ‘walking out the door’ overnight?
4. What has caused any changes in value during the last financial period?
Developing strategies that maximise business value:
1. How do you identify opportunities to generate corporate value by sweating your intangible assets?
2. Have you quantified intangible value added by the strategic plan?
3. Are your budgets for R&D, marketing and innovation value-based?
Scored well? Congratulations - you understand the current and potential value of key corporate assets, and are in a position to develop value maximising strategies, set appropriate targets and track the return on investment.
Failed? Reckless? Well, at least the questions identify what needs to be done …
If you have further questions or require expert advice, please don't hesitate to contact us.
Author: Tim Heberden