Will Conventional Business Plans and Mission Statements Remain Relevant In Intangible Asset Driven Economies?

 

Michael D. Moberly   February 1, 2011

The increasingly competive business terrain in which know how and other intangible assets have become the overwhelmingly dominant drivers and producers of value and revenue, is, in my view, prompting many companies to re-examine the relevance of their often times, conventional and even static business plans and mission statements.  

I am not suggesting there is anything inherently wrong with continuing to write business plans and mission statements, because they frequently do serve as a descriptive (Gannt Chart type) of roadmap of what one wants his or her business to eventually look like and how to get there!

But, for analogous purposes, some (management teams, boards) are inclined to view business plans and mission statements in a ’constitutional’ like fashion, i.e., either as a ’living’ document that’s malleable and subject to flexible interpretations to reflect an evolving global business environment, or a more static document that can only be interpreted on the basis of its ’original intent’. 

I am finding however, more companies, at least some of those that I come in contact with, positioning themselves to become more responsive, more adaptive, and more prepared to execute relatively rapid internal changes, absent being bound to any particular conventional or structured sets of processes associated with traditional business plans. 

Let’s be clear though, my engagements, by choice, are primarily with the small, mid-size, and early stage arena from which its easy to surmise that the standard or conventional business plan or mission statement is becoming less relevant.  I find this particularly evident when I advise company’s about the necessity to ensure the intangible assets they produce and/or acquire are effectively aligned with their company’s strategic planning, hence, its mission statement and business plan. 

Business plan construction is still routinely portrayed in many college (business management) textbooks as being one, if not the very first step one should engage toward developing a new business.  Interestingly, in an MBA course I taught several several semesters ago, I presented this alternative view to the class, in which there were numerous ‘entrepreneurial spirited’ individuals who aspired to start their own businesses, with some already in the early stages.  

For them, my (alternative) view, prompted numerous opposing reactions, particularly from those students who had toiled over writing a business plan and now were clearly wedded to it.

But again, its simply not uncommon to find myself visiting companies which, at first blush, appear to be, for lack of a better term, almost ‘rudderless’ in that they are continually evolving, emerging, and even, what appears to some I’m sure, as being in a perpetual state of ’re-inventing themselves’.  The reason or rationale for this rather un-conventional management style, according to the management team leaders of those firms, is the necessity to retain sufficient internal flexibility and maneuverability to be able to accommodate their particular transaction space as quickly and effectively as is warranted, which again, is increasingly being dominated by intangible assets which, I am arguing, do not always mesh well with  conventional, highly structured or inflexible business plans or mission statements.  Admittedly, lenders are not always enamored with this alternative view.

And also, admittedly, this alternative view (management styles) does require, in most instances, more attention and oversight from the management team and board.  They need to epitomize (embrace) flexibility, intellectually and conceptually, by being prepared to adapt, change, and have the necessary information, at the ready, to make sound decisions as rapidly as a new deal, proposal, or circumstance warrants.

There’s little question now that ntangible assets have become the key and irreversible underlier to business success and profitability, that is, if they’re recognized, developed, and used effectively.  But, those assets must also be very maneuverable, flexible, adaptable, and ‘bundable’ in order to serve as preludes to accommodating the development and execution of a new product, service, or transaction. 

With respect to company mission statements I see some being replaced by (a.) more broad and generally worded statements drawing attention to customer service, supply and value chains, and regulatory compliance issues, or (b.)  perhaps a series of what I refer to as ‘mini-mission statements’ inter-twined with tactical-strategic planning language geared toward the development and execution of a particular product or service.

Of course, an inextricable and underlying key to all of this, in my view, is for decision makers to have a firm grasp of the intangible assets their company and its employees are producing even for early stage firms, which have come to be so integral, again, when recognized and applied effectively. 

A point worth noting is that is only the producers of intangibles, i.e., employees, who possess the intelligence, wisdom, timing, and sense of foreseeability to recognize when and how to adapt, modify, or change those assets to accommodate a new or different company initiative.  In other words, there must be a ‘company culture’ in place that, among other things, includes the stewardship, oversight, and management of intangible assets.

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