4 Types of Intangible Assets in Digital Businesses (151)

This week’s podcast is about why intangible assets are so important in operations, competitive moats and valuation. They are central to digital businesses - but confusing.

You can listen to this podcast here, which has the slides and graphics mentioned. Also available at iTunes and Google Podcasts.

Here is the AI company Movio.la

Here is the link to the China Tech Tour.

McKinsey’s Framework for Intangible Assets

• Innovation / Creative Assets. This is any time, effort or money spent developing intellectual property. This includes content creation, such as entertainment and artistic originals. And it includes other types of content such as mapping and user generated content. But it can also include R&D in new product development, improved customer interfaces and improved user experiences (whether digital or physical). The term “innovation capital” is a good description of these types of intangible assets, which we see frequently in digital businesses.
• Digital and Analytics Assets. This is any time, effort or money spent developing, maintaining, and advancing digital assets and capabilities. This includes software, data warehouses, digital infrastructure, and other digital and data capabilities. This includes pretty much everything in the digital operating basics. It also includes CRM software, ecommerce interfaces, data analytics models and algorithms and so on. I like that they separated this as a category from intellectual property and content assets. The title “digital and analytics capital” is great.
• Human and Relational Assets. This has two sub-types. This is any time, effort or money spent on:
  • Building individual or organizational skills through training within an organization. So, this is your talent strategy – which includes specialist skills and capabilities but also social and emotional skills. This also includes relations and interactions within organizations, such as organizational and managerial capabilities. You can put adaptability and resilience here.
  • Building ecosystems and networks external the organization is also important. This is relationships and partnerships with suppliers, complements and data partners. This is where Digital Operating Basics 4 as well as Consumption Ecosystems would go.
• Brand Assets. This is any time, effort or money spent to maintain or increase brand equity. This is an important category, but the name is not great. Relationships with current and potential customers is an important intangible asset (often called brand equity). This can include capabilities that build and maintain these relationships – such as loyalty programs, promotions, and fan clubs. Customer service and churn and retention initiatives are also very important.

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I write, speak and consult about how to win (and not lose) in digital strategy and transformation.

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