Entrepreneur’s 60-Second Guide to Trade Secrets

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Collaboration as an Intangible Asset

Harvard Business Review

The point is not to nod in the direction of the "little people," but instead to recognize that the intangible assets an organization has are the product of the hundreds, perhaps the thousands, of "assists" — to extend the basketball metaphor — that usually go unnoticed but without which problems would not get solved, insights would not be generated, and uncertainties would not be vanquished. Interestingly, intangible assets are all the rage these days on Wall Street.

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Managing With a Conscience

Leading Blog

Frank Sonnenberg makes the case in Managing with a Conscience , that the only sustainable way to succeed is the right way—not cutting corners—emphasizing the intangibles like trust, creativity, focus, speed, flexibility, relationships, loyalty, and employee commitment. Sonnenberg believes that leaders who have a jaded view of intangible assets will never make the commitment required to reap their full potential.

Why Leaders Are Still So Hesitant to Invest in New Business Models

Harvard Business Review

Consider the dramatic shift in the types of assets that create market value. According to Ocean Tomo, a consulting firm focused on intellectual capital, physical assets (plant, property, and equipment) made up more than 80% of the market value of the S&P 500 in 1975. Today, the majority of market value is made up of intangible assets (networks, platforms, intellectual property, customer relationships, big data) more than physical assets.

How to Make Organizational Change Enduring

Six Disciplines

Most organizations say their most important assets are their people, but few behave as if this were true. There is still a whole notion of focusing on tangible assets and their impact on the bottom line, rather than the intangible assets, which are people. Here''s a real shocker: In a survey of 3,300 senior managers and human resource professionals reported by Rob Lebow in his Washington CEO magazine. 75% of all organizational change programs fail.

The Answer to Short-Termism Isn’t Asking Investors to Be Patient

Harvard Business Review

An informed shareholder, who looks beyond earnings numbers and analyzes the company’s intangible assets, would notice that the firm has mortgaged its future. Gathering information on a firm’s intangible assets is costly, and so not worth doing if you own only a tiny bit of stock in a company. Large shareholders – blockholders – do have incentives to gather intangible information. Tim Evans for HBR.

How to Navigate a Digital Transformation

Harvard Business Review

Different industries and different business models have always maintained different percentages of these asset types. Manufacturers invest most of their capital into physical assets, while high-tech firms invest in R&D to create new intellectual capital.

What the Companies That Predict the Future Do Differently

Harvard Business Review

Financially, organizations require new models to account for information assets beyond treating them as intangibles. The ultimate goal is to treat information as a tangible flow rather than an intangible asset stuck on the balance sheet. If knowledge is power, then predictive analytics promises the ultimate knowledge — that of the future.

GDP Is a Wildly Flawed Measure for the Digital Age

Harvard Business Review

It struggles to account for today’s intangible assets—services, insights, and networks. Our research into business models clearly indicates a world where networks and digital assets are more valuable than things and “access” is more convenient than ownership.

A Four-wheel-drive Diamond in the Rough Leadership Model

Great Leadership By Dan

These results can be, in my experience, best conceived as a progression of outcomes moving from intangible assets to tangible outcomes.

What It Will Take to Fix HR

Harvard Business Review

In the early 1980’s, sixty percent of corporate value creation emanated from the optimization of tangible assets. Today, we live in an era where 85 percent of value creation stems from brand, intellectual property, and people — all intangible assets.

Profit Is Less About Good Management than You Think

Harvard Business Review

” Value investors like Graham and Buffett believe that the sources of sustainable returns on capital are not a company’s human assets but their so-called “economic moats,” structural, durable competitive advantages around revenues or costs. STEVEN MOORE FOR HBR.

The U.S. Needs Tax Reform, Not Tax Cuts

Harvard Business Review

tax law to keep up with changes in the business environment in the past three decades, including the growth in international trade and capital flows, the increased importance of intangible assets to businesses, and lower corporate tax rates in all our major trading partners. The current U.S. presidential administration and congressional leadership have spent months talking about tax reform.

How NASA Uses Telemedicine to Care for Astronauts in Space

Harvard Business Review

They determine what material and intangible means of disease and trauma prevention, diagnosis, and treatment are needed for each mission. Medicines, instruments, consumables, and exercise devices belong to material assets; intangible assets involve medical expertise on board and on the ground, processes, procedures, and protocols. Before launch, all astronauts are trained to use the medical assets that will be on board.

The Case for Stock Buybacks

Harvard Business Review

Since these shareholders have “skin in the game”, they have the incentive to look beyond earnings and instead look to a company’s long-term growth opportunities and intangible assets. Laura Schneider for HBR. If paying excessive CEO salaries is the most maligned use of corporate funds, stock buybacks may well take second place. Conventional wisdom is that CEOs buy back stock to manipulate the short-term stock price.

Startups Could Fundamentally Change the Way Big Investors Operate

Harvard Business Review

The success of institutional-investment firms is socioeconomically vital: Their task is to grow the financial assets needed to fund retirements, development, education, scientific research, and many other capabilities associated with pensions, endowments, foundations, sovereign wealth funds, and the like. Collectively, the world’s investment giants hold in excess of $70 trillion in assets, which represents the bulk of investable capital globally.

We Need to Raise Taxes for Shareholders and Cut Them for Companies

Harvard Business Review

Clinton has proposed raising both taxes by removing some corporate tax breaks, raising capital gains tax rates on assets held from one to six years, imposing a surtax on high-income taxpayers, and taxing some capital gains on assets held until death. There’s no good way to determine where those increasingly important intangibles are located.

Investors Today Prefer Companies with Fewer Physical Assets

Harvard Business Review

At home, we’re Marie Kondo–ing our way to minimalism, buying experiences rather than things, and using services — Netflix, Spotify, Uber — rather than owning assets such as movies, music, and cars. The companies that provide those services and enable us to share what we have (insights, relationships, assets) with others not only are valued more highly by investors but also are relatively asset-light themselves.

Recommended Resources – I Have A Strategy, No You Don’t

Strategy Driven

Recommended Resource – Strategy Maps: Converting Intangible Assets into Tangible Outcomes. I Have a Strategy, No You Don’t : The Illustrated Guide to Strategy. by Howell J Malham Jr. About the Book.

What Apple, Lending Club, and AirBnB Know About Collaborating with Customers

Harvard Business Review

homes and cars) and intangible (e.g. expertise and relationships) assets, firms can gain these advantages of the Network Orchestration business model. Through co-creation, companies can access a deep well of customer capabilities, knowledge and assets.

CVS’s Lesson: Carpe Diem

Harvard Business Review

CVS is now one of a small group of companies that have realized that their reputation is the most valuable asset they have and that building a stronger reputation by avoiding risks to that reputation can create a significant competitive advantage. Finally, how can we calculate the intangible value associated with this rise in reputational capital for CVS? When CVS/Caremark announced that it would forego some $2 billion in sales of tobacco and related products recently, CEO Larry J.

Even in a Digital World, Globalization Is Not Inevitable

Harvard Business Review

Digital devotees tend to conflate digitization with intangible assets — the intensity of which has indeed soared in the last half century — in ways that exaggerate digital transformation’s potential. In the aftermath of the UK’s Brexit vote and Donald Trump’s election in the U.S., globalization is seen as a political hot potato rather than a hot ticket to prosperity.

Why Family Businesses Come Roaring out of Recessions

Harvard Business Review

Tobin’s q is the ratio between a company’s market capitalization and the replacement cost of its tangible assets, with a higher ratio indicating that a company has more intangible assets such as patents, brands, leadership etc., In our sample, the average advertising intensity (advertising expenditure divided by total assets) of the family companies fell marginally, from 2.0%

Blockbuster Becomes a Casualty of Big Bang Disruption

Harvard Business Review

But by then its one-time core assets — retail stores — had become expensive liabilities, weighing down the company’s effort to compete in the winner-take-all kind of market that is often characteristic of Big Bang innovation. With this week’s announcement, the company has acknowledged the accelerating decline in value of Blockbuster’s remaining physical locations, assets stranded by the lightning-fast pace of digital disruption.

The U.S. Corporate Tax Code Is Broken. How Should We Fix It?

Harvard Business Review

Second, the rise of intangible assets, like patents and widgets, means that transfer pricing issues become central, and so high tax rates become more untenable as they increase the incentives to be aggressive.

Profiting from the Golden Rule

Harvard Business Review

Even accounting rules specifically dealing with reputation — goodwill and intangible assets — are subject to frequent rule changes and endless debate. Listen in on MBA classes and corporate conferences and you will hear a lot of talk about the need for inspiring missions, ethical behavior and transcendent purpose.

Filing for a Patent Versus Keeping Your Invention a Trade Secret

Harvard Business Review

These choices are strategic, and a company must think about the broader picture too of the overall intangible assets your company possesses. The different forms of protection should be understood as an asset portfolio – you might want to diversify and spread your risk. For many years, beginning in 1942, Premarin was the only hormone replacement therapy drug on the market derived from a natural source.

A Novel Idea for Putting Sidelined Cash to Work

Harvard Business Review

Second, for small and rapid-growth technology companies, the problem is compounded by the fact that, while rich in intangible assets, they typically lack the kind of collateral (equipment, inventory, real estate, etc.)

What the Companies That Predict the Future Do Differently

Harvard Business Review

Financially, organizations require new models to account for information assets beyond treating them as intangibles. The ultimate goal is to treat information as a tangible flow rather than an intangible asset stuck on the balance sheet. If knowledge is power, then predictive analytics promises the ultimate knowledge — that of the future.

On Creative Accounting: Two Creativity Myths

Harvard Business Review

The Balanced Scorecard's primary form of novelty is that it takes into account the intangible assets that are so crucial for information-age companies. "Creative accounting" is really bad. Except when it's good. Say that in a roomful of managers, and you get nervous laughter.

How Work Will Change When Most of Us Live to 100

Harvard Business Review

Just lengthening that second stage of full-time work may secure the financial assets needed for a 100-year life, but such relentless work will inevitably deplete precious intangible assets such as productive skills, vitality, happiness, and friendship.