Intangible assets include many different aspects: brands, intellectual property, patents, know-how, and copyrights, among others like customers relationships, organization processes, information system, partners, etc. Companies have numerous intangible assets, and most of the time much more than they believe, according to Pierre.
I/ Pierre Ollivier’s bio
Pierre Ollivier is founder of Winnove (www.winnove.com), an innovation management & strategy support consultancy service company. He believes that companies can create real value by maximizing their intangible assets.
II/ Identifying existing intangible assets
How to create more value through intangible assets? This can be tricky, because, it’s proven remarkably difficult to quantify value created through intangible asset maximization. This is due to the fact that intangible assets are hard to quantify to start with; in fact, is is even more important to identify intangible assets and build means to exploit them and observe qualitative results rather than trying to quantify them
And again, it seems that the current finance paradigm, with its desire to predict future revenue streams, is the enemy of innovation. Indeed, projected revenue streams almost never turn out right. The reason is first because uncertainty is the enemy of excel sheets (errors propagate and amplify very rapidly), and second largely because these projections are based on a given industry structure that exists at the present time but is not guaranteed to exist as such in the future, regardless of product performance, market traction and consumer demand. This may sound counter-intuitive, but it is possible to assume that there will never be a way to predict with a sufficient level of certainty how market structure will change (which is the basis of all corporate financial revenue projections):
- Will a new entrant change how value is shared in the industry?
- Will a substitution product make existing products irrelevant?
- Will industry incumbents merge upstream, downstream and gain a significant competitive advantage?
III/ Building consortiums to maximize intangible assets
Pierre and I then talked about some of the work he’s doing on building innovation driven partnerships and consortiums today. In other words, he helps to create partnerships among multiple companies. For example, today, he’s working on improving vision on how to control power grids (smart grids). He partnered with a number of leading electricity companies, including, EDF, Areva T&D, Alstom and a number of universities. And today, the problem that needs to be solved is the following: how to get reliable power from one point to another, given that power and energy production is more and more distributed and intermittent, whereas energy consumption is more and more diverse, in other words less and less predictive?
For example, he’s currently working on the distributed control system of direct current networks. Distributed control systems are control processes in which the controller elements are not centrally located (like the brain) but are distributed throughout the system with each component sub-system controlled by one or more controllers. Direct current networks are interconnected networks for delivering power from suppliers to consumers. Interconnected networks consist of generating stations that produce electrical power, high-voltage transmission lines that carry power from distant sources to demand centers, and medium to low voltage distribution lines that connect individual customers.A number of direct current networks exist or will exist in the future, such as Electric Vehicles charging/ discharging systems, city quarter energy management systems, ocean power, city transportation, quarter cogeneration, collective solar power, data center energy management or city lightening, etc. Facing these numerous innovative situations, power utility companies are still learning how to manage these networks and ensure stability, security and flexibility.
Pierre works with the R&D teams in the consortium member companies. He typically identifies partners, builds a novel business model and coaches the partnership. This is one example of how to maximize intangible assets through cooperative R&D innovation.
Further readings :
- For an analysis of how intangible assets create financial value, please refer here
- For an example of a consortium dedicated to innovation in the digital space, please refer here
- For an example of a consortium dedicated the media, please refer here
© Guillaume Villon de Benveniste – The Innovation and Strategy Blog