Reshaping business and the world by leveraging knowledge intangibles
Need help cataloging different business perspectives on intangibles
I am currently working on an article for IAM Magazine about the differing vocabularies and points of view on intangibles and intellectual property.
My thought process for the article led me to create a table that would serve as my outline (see attached). It focuses on five perspectives:
Feel free to forward this to others. However, please don't publish this on your blogs yet--I'll be thrilled to broaden the audience after our community has had a chance to refine it.
Thank you in advance for your help!
Mary
My thought process for the article led me to create a table that would serve as my outline (see attached). It focuses on five perspectives:
- Accounting/Valuation
- Law
- Capital Markets
- Insurance/Risk
- Integrated IC View
Feel free to forward this to others. However, please don't publish this on your blogs yet--I'll be thrilled to broaden the audience after our community has had a chance to refine it.
Thank you in advance for your help!
Mary
Tags: IC, IP, accounting, capital, insurance, intangible, intangibles, intellectual, law, property, More…
Views: 7
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Permalink Reply by Daan Andriessen on
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Hi Mary,
My analysis of various metaphors for knowledge might help. Each metaphor for knowledge that we use highlights (and hides) different characteristics of knowledge and triggers a different discourse; e.g. an accounting discourse, a logistic discourse or legal discourse.
See enclosed presentation that I gave for the ICM Gathering in 2007.
Regards
Daniel - Attachments:
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Permalink Reply by Mary Adams on
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Thanks Daan! I have to say that this presentation helps me understand you "metaphor" approach much more clearly than I had in the past. It also is relevant to what I am trying to do with this table. I think that it suggests a few new rows--around intent, goal, what is missing...I'll circle back with next version. Mary
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Permalink Reply by Abhijit Talukdar on -
Mary,
There is a Reporting perspective of IC that is prevalent, judging from the number of IC Reports out there. It seems to me that firms and institutions who are heavy on R&D have a need to produce such IC Reports more than others, although I personally feel that the need is highly relevant for all firms and especially for listed firms.
I also feel that IC Reporting is highly relevant for start-ups and young high growth firms who more often than not have only IC propelling their growth and even their very existence. Some of these firms are able to protect their knowledge in the form of IP, however most do not or cannot. Yet IC is the only real asset that such firms have at an early stage until they are able to generate revenues or raise funding for buying other assets. I feel intrigued that the IC community so far has not devoted sufficient attention in this area, however I feel that IC is substantially visible and demonstrated in such young firms. Further, I feel that discovery, reporting and valuation of IC in such firms may enable them to raise growth capital at terms that are more favorable than if they do so otherwise.
Therefore IC Reporting to my mind is a very important perspective.
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Abhijt- I have been mulling over your comment. My first reaction was that the IC Reporting perspective is what I was trying to get at in the last column "integrated IC management." But I am not sure that it is. Most IC Reports do not include financial data. So maybe they should be a separate column. If so, what would be the differences from the final column? Thanks, Mary
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Permalink Reply by Abhijit Talukdar on
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Mary, I was afraid you would ask this very question!! I had it mind myself when writing the earlier post.
Lets see, as far as I am aware I have found that IC Reports are typically published by firms as part of or as an addendum to their annual report. Now we know that an annual report is a regulatory requirement for listed firms and this report is produced solely for the benefit of the shareholders of the firm. Therefore I think that an IC Report fits in the Capital Market column since it is addressing the needs of current and future shareholders of the firm.
However, we can assume that management in the course of producing the IC Report will surely use all of the metrics that are published in the there (and others that are produced but not published) in the course of making management decisions. Therefore it makes eminent sense also to put IC Reporting in the 'Integrated IC" column. Perhaps a better name for this column will be "Firm Management" rather than "Integrated Management".
As far as IC Reporting for high growth firms is concerned, I think that it fits in the Capital markets column again if we use Capital Markets in a wider sense to also include VC/PE and angel investors.
Does that help? Abhijit
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Permalink Reply by Mauro Gatti on -
Let consider this strong assumption: intangibles matter insofar as they can be used for strategic (e.g., competitive advantage) purposes.
We may disagree with that assumption but it is a legitimate one that has been advocated by scholars like Kaplan and Norton. To which of the aforementioned perspectives would you ascribe such an approach? Perhaps the answer is "Integrated IC/View", but I do not find this a good description. I would rather use terms like "operational view" that also includes the tactical perspective.
In some sense the operational perspective is the fundamental one: intangibles would not be relevant for accountants, lawyers, etc. if they had no operational value.
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Hi Mauro - Many thanks for these profound comments (we could write a paper about each one but I'll try to summarize)
"Intangibles matter...for strategic purposes" Yes. Absolutely.
Your point made me think about my assumptions. The first four columns (accounting, legal, capital markets, risk) are intended to summarize the common assumptions and approaches in use today. The last column (integrated view) is trying to sketch out a possible integrated view. The idea is that, while each of the other four specialities will always be guided by the customs and regulations of their perspective, all business people need to also have a shared understanding of intangibles in the organization about these resources that do matter.
Of course, as you begin to lay out, there are different purposes and perspectives in the organization: strategic, operational/tactical and (I would add) financial. I think the different organizational perspectives should be fleshed out but it might distract from what I am trying to do by reaching across to accountants, lawyers, risk managers and financial players.
So let's try to get the "integrated management" column as an overview of a manager's perspective on IC. Here, the question is what are the critical assets to the organization? (assuming a combined strategic, operational and financial view)
If that assumption is right, then do I have the right categories or areas of focus in the "Integrated" column? For human capital, for example, is it competencies, experience and management skills? For relationship capital, is the list a good summary of the most common and important relationships?
Finally and this is really IMPORTANT -- while the first four columns are established and shared views, there is not a shared managerial or overarching view. That's what makes conversations about intangibles so difficult. That's why we have a big job to do.
Any and all feedback please!!
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Thanks Abhjit- Great thoughts! I agree that IC Reporting belongs in the Capital Markets column. However, I have hesitated to put it there because it is still a relatively rare activity. But, you are right, it needs to be mentioned.
Now, what to call the last column? You're right that it is the firm or business view. And it is definitely, like the IC Reports, still a rare perspective (at least explicitly--managers manage IC intuitively every day). But this column will have to be that way--showing a still emergent point of view. See my comments to Mauro above. Do you think that I have the right categories in this firm/integrated column?
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Permalink Reply by Mauro Gatti on
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A short comment to one of your categories
Business processes can be part of the "structural" or "relationship" capital depending on the whether they are internal or external. Those that seem more valuable in the sense that they are more difficult to imitate are likely the latter. There are firms like IKEA and Cisco whose success largely depend on these external processes. There are even firms whose identity actually lies in these processes. I think it makes sense to differentiate these two categories.
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Mauro-My first reaction is to ask whether the process itself is owned by the company--I would think of an owned process as structural capital. I generally think of relationship capital as shared knowledge assets. But, of course, a customer list is not shared. So maybe it does make sense to categorize processes by structural or relationship capital. Thanks!
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Permalink Reply by Mauro Gatti on
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A short comment about Human Capital category
I think one the most important items missing in your list is the category of "motivation systems". That includes both extrinsic motivation systems (e.g., incentive systems used for salespeople), as well as intrinsic motivation systems (e.g., a environment fostering creativity and innovation). Motivation systems may not be very important when business processes are strongly structured, in other terms when tasks are repetitive, precisely defined and strong control mechanisms are in place; but they are important for all those activities that cannot be effectively managed with highly structured processes (notably innovation).
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Permalink Reply by Nick Shepherd on -
Hi Mary - great idea to present the different perspectives this way! Just a few random thoughts. One of the perspectives that might be added is economics as that is the area that deals with "value" and certainly is a key part of this debate related to national economic activity that fails to recognize most intangible value creation? In addition in the accounting and / or investor dimension we should probably have "goodwill" somewhere because that is the label that appears on financial statements that investors also use. I will think on this some more but its a great way of trying to focus the issues.
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