In the current crisis environment, revenue is scarce and many business models are obsolete. Firms are being forced to think differently about how they operate and where they look for new sources of competitive advantage. That presents a clear opportunity – for innovation and intellectual property (IP) to drive sustainable success.
With intangibles making up around 80% of corporate worth, they can play a critical role in helping businesses to:
- protect revenue streams and foster growth;
- enhance collaboration;
- ensure positive customer and stakeholder advocacy; and
- support asset and risk assurance for investment.
An integrated approach to IP, aligned to business objectives and implemented across business structures, can make a material contribution to assist strategic decision makers to navigate the coronavirus crisis. A strategic approach to IP also supports the ‘bold moves’ needed for effective crisis and recovery response.
IP as a part of business strategy
IP is embedded throughout a business and its contribution is multi-faceted. While best known for supporting differentiation by providing customers with an assurance of quality and origin, IP also underpins and connects critical capabilities – by highlighting value in the way a firm does business, manages people, innovates and operates.
Examples of the way IP contributes value include:
- support for communication of origin, quality, service and firm values which attract not only customers but also investors, collaborators and talent;
- to underpin an exchange of value in commercial transactions such as acquisitions, divestments, collaborations and joint ventures, while also identifying areas of economic worth in the context of debt reduction and insolvency;
- providing frameworks for managing data and securing sensitive information;
- as a key source of innovation and competitor intelligence – helping to evaluate not only freedom to operate, but also adjacencies and white spaces including as part of knowledge based and digital transformations; and
- to facilitate risk and compliance approaches aimed at mitigating legal and monetary impacts, threats to reputation, and the oversight and governance of material assets.
The value of IP to a business lies in its contribution to overall strategy and not just as discrete assets.
When intellectual property is dealt with in isolation – for example, as a discrete legal function and cost centre – there’s an opaque line of sight from IP to strategic thinking and decision making.
However, when IP is dealt with at both an operational and a strategic level, boards and senior management are better able to make informed decisions across key performance indicators.
By focusing on the intersection of IP and business strategy – in the same way as finance, tangibles and people – businesses can more effectively maximise enterprise value and mitigate enterprise risk.
IP supporting bold moves
In the cut and thrust of day to day operations, it can sometimes be difficult for firms to focus on longer term initiatives like investment opportunities, business model pivots or transformational change – bold moves tend to be re-prioritised in favour of more immediate pressures.
A crisis like COVID-19 can compound the distractions resulting in postponement, delay or cancellation of strategic actions.
On the other hand, a crisis like COVID-19 can sometimes accelerate (or force) bold moves – from a rethink of operational structures, to supply chain renewal, action on significant M&A, or divestment opportunities.
Take access and use of technology as an example. By rethinking traditional modes of fulfilment, delivery and billing, firms can take a first mover advantage to scale at speed and meet new consumer demands.
Similarly, by forming new partnerships and strategic alliances firms can adopt solutions outside their experience and attract talent outside their expertise, to support entry into adjacent markets. Intellectual property is one of the ways businesses can finance and leverage these types of opportunities.
An informed and tailored approach to IP in the context of a business reshape or refresh can add real commercial value, by supporting the bold moves that drive business strategy.
IP as a business tool to accelerate recovery
When IP is part of business conversations there’s a clearer line of sight for decision makers to help with:
- strategic planning;
- revenue forecasting and generation;
- positive brand positioning, to drive customer advocacy and sales;
- business efficiencies, including productivity improvements and resource allocation;
- third party collaboration; and
- risk mitigation.
In times of economic downturn, businesses have an opportunity to leverage their intangibles as part of their crisis and recovery strategies. Intellectual property is a lever they can pull to drive performance, which is a critical contribution in the current environment.
Taking intangibles into account when planning and actioning a bold move is a key factor in accelerating the future into the present.
Jane Perrier is the Managing Principal at ipervescence, an intellectual property business advisory firm offering IP consultancy and flexible resourcing services, to help drive competitive advantage and growth. ipervescence is managed by Karen Hallenstein and Jane Perrier, passionate advocates of the role of IP in stimulating ideas, growth and adaptive change. Before co-founding ipervescence, Karen and Jane spent over 20 years leading the global IP team for Telstra Corporation Limited. They have extensive experience advising on all areas of procedural and commercial IP practice, including developing commercial strategies to leverage IP and mitigate risk.