It may sound like a recruiter’s job only, but the matter of fact is, your marketing success will be determined by the skill set and experience of the person in charge of your marketing. As such, you should take a keen interested in finding the person with the right profile for your SME. As discussed earlier, in SMEs marketers have a generalist profile, but even the most broad knowledge does not cover all aspects that are necessary to connect to the target audience on an initial shoestring budget.

Hiring for the start-up phase

You want a person who can market plan and understands the value of organising not only your planning, but comes well connected to local vendors when it is time to implement activities. It is important to start off with a strong brand development. The marketer in the start-up phase can either develop brands (has a creative background, e.g., comes with a job title like ‘art director’) or is a marketing manager who can direct an outsourced team to develop the brand in accordance with your market strategy. This includes knowledge or access to market research so that the brand development is grounded in real world needs and wants of your customers. Don’t fall in the trap of thinking that all you need is a logo for your business cards, unless you are not serious of building a company brand that gives you return on investment.

A person with strong creative background may give your visual market presence the edge if you are in life style industries, however, if you are manufacturing widgets or other commodity products, you may want to consider a B2B (business-to-business) marketer with a commerce degree who understands the ins and outs of B2B marketing and out sources the creative parts on your behalf.

SME brands are now in a fortunate position to have low-cost, far-reach digital tools at their communication disposal but it requires some dedication and expertise to leverage them. Most of all, after the start-up phase, marketing is about widening the appeal and building on existing equity internally and externally of your business. You might find, that your start-up brand builder or manager does not want to continue in a monitoring role, or that stewardship and control is not their cup of tea. Find a supplement or replacement for the next phase in your company life cycle.

Hiring For Growth

This is the phase when initial ground work has been done, the company should have a brand identity and marketing direction. And a pretty good understanding who their customers and competitors are and will be. The creative part now involves planning and steering the brand. Stewardship is replacing development for the most part of the marketer’s SME role. Budget presentation, market research and campaign planning are the forte of SME marketers in a business growth phase.

The role is working closely with your sales department (where applicable) and influences service delivery and internal brand building (internal brand building: connecting your brand with your employees). How much of the stewardship can and should reside in one person depends on your growth plans and business strategy. As mentioned in part 1 of this post, its about skill distribution and industry fit.

Picasso (1907) Source: Wikipedia

Richard Ogle described how Picasso came to paint ‘the first real masterpiece of the 20th Centrury’, the Les Demoiselles d’Avignon. In his book ‘Smart World‘ Ogle argues that there is no such thing than the lonesome Genius who came up with the idea overnight.

Regardless of profession or calling, Ogle argues, that humankind has a collective consciousness in which trailblazers like Picasso delve to retrieve their ground breaking ideas. Picasso is quoted in referring to African art for the inspiration of this painting.

By thinking outside the brain and tapping into the extended History and wealth of experience of the extended Mind (Ogle 2007, 10) we see how all great inventions actually came to be. Think of the internet itself- Wikipedia is just one example of such an extended external brain in action.

It is interesting to look at intangible assets in firms that way. Perhaps intangible assets (Intellectual Property, Trademarks and Patents) and their nature of ’suddenly leaping onto stage’, thus ‘disrupting the status quo’ are just an expression of where we are going as a human society. Look closely and we can see how the collective conscious is opening up individual creativity, for example with the ‘Open Source’ concept.

Not one company can claim to ‘own the ideas’ since everything is connected through history, material, memory. This is a scary thought for economists and accountants alike. Yet, this disruptive idea space (Ogle) was first named by Schumpeter as prerequisite to entrepreneurship.

The intangible is quickly becoming a new stage of consciousness, a way forward to the next new thing. It is true that our current Western business models  can’t put a price tag on it- which I assume means ‘making the intangible tangible’ in current economic thinking. If the summary of collective social networks are actually creating the new value in our economies than it is time to investigate the consistency of this mix instead of denying its contribution to firm assets as not quantifiable.

The most prevalent areas in which the small businesses have problems
are Sales/Marketing (40.2 per cent),
Human Resource Management (15.3 per
cent), and General Management (14.3 per
cent). Specifically, Promotion, Market Research, and Training are the most frequently encountered problems, all of which are knowledge or skill related, reflecting the general shortage of expertise in small business sector.

It is not that these smaller businesses are not doing any marketing – they would not be in business if they were not – but that the effort in marketing lacks professional input and expertise. And, when businesses turn to the published literature for help, they find that writing on marketing focuses on larger organisations. Managing marketing activity is a different beast within a department of 10 people compared to the owner/manager developing their own marketing.

Regardless of the view among smaller businesses that marketing is a weakness many smaller businesses are very good at marketing. SMEs may even be more responsive to the market and far more flexible than their larger competitors. But these businesses still look enviously at the big consumer brands and wonder how they too can achieve such awareness and provenance. Marketing in smaller businesses tends to concentrate on sales and promotional tactics rather than on the big strategic issues.

And herein lies the problem. Despite the perception, that such wide awareness requires lots of Marketing expenditure, it is actually the lack of strategic competence and knowledge amongst SME owners/managers that prohibits effective Marketing and market awareness of the SME offering. Sales and Marketing are often either lumped together wit Sales taking a precedent over Marketing. As Paul Fifield writes:

Remember:
Sales is about ensuring the customer buys what the company makes. Marketing is about ensuring that the company makes what the customer wants to buy.

Both areas require a different professional skill set and mindset. Companies, regardless of size, should not be lead by either mindset or preference. They should be market-led, not inside-driven. But that is another aspect of the problem altogether.

There are however, fundamentals that can make all the difference. These are Consensio’s SME brand observations based on market experience and marketing literature:

• cultivate brand emotions
• build corporate and product/service brands and understand how to use them
• integrate marketing and brand development
• develop matching brand affiliations
• create a consistent brand logic
• link the brand to the people and personalise it
• Document your logic and keep experimenting with the right media mix

Ten Years later, and without quantifying the number of businesses in WA, I am assuming the same Marketing issues still apply to our SME’s.

He observed, that firms were not static output-restrained entities, but that their interactions with the market were of interest and impact to the whole economic system. He noted the cost of resource investment as barrier to firm imitators.
Yet he also reflected, that copycats would always exist in markets. New ways of doing business could produce above normal returns on investments. And Schumpeter concluded that exogenous disruptions are vital to “creative destruction”. In his observation, at the core of the firm was the entrepreneurial vision. Creating or adopting innovations would give firms the necessary competitive advantage.

His work is giving intangible asset creation, firm theory and the processes necessary for creation new integrative meaning. To put it simple; questioning the status quo may give an advantage to innovation in firms, however healthy earnings could also result from less ‘disruptive’ innovations.

…In dealing with capitalism we are dealing with an evolutionary process… (1942).

Business goodwill is a key intangible asset that represents the portion of the business value that cannot be attributed to other business assets.

(Btw: For a quick definition on institutional, professional, practice and practitioner goodwill, see for example here or Wikipedia.)

IA’s are according to this:

• Intangible assets can be identified and described. They must be a specific property, not an idea.
• Intangible assets are legal property. Just as tangible assets, the owners can assert their legal rights to and defend their possession of intangible assets.
• Ownership of intangible assets can be transferred. For example, the owners can sell them or give them away.
• Evidence of intangible existence. Documentation is a typical way to establish that. Examples are customer lists, blueprints, contract documents, software source code printouts.
• Intangible assets have a life span.

Why is it locked out of the definition of an intangible asset when all you have to do is follow through with this logic and place ‘idea’ in the above bullet points? So tell me, what did my last idea not do to increase business value?

I carried it around, I gave it to somebody, I wrote it down, it got me a good reputation, I was paid for it and in the end it might be a good one to keep for solving a specific problem in the organisation later on. A bit of goodwill, anyone?

Parts of the organisation traditionally dealing in ‘tangibles’ are the finance and sales departments. HR and Marketing are the domain of the intangible asset.

The process of developing a linear intangible asset chain can be described in this model. They are presented here as linear, because in my experience, setting them in random order is not creating sustainable competitive advantage in the long-term. Step 3 to 7 are intrinsically linked and are more like layers than consecutive steps as they are initiated simultaneously.

intangible asset chain

1. The process of naming the company
2. The process of trademarking
3. The process of defining the corporate identity
4. The process of inducting employees to the corporate identity and marketing strategy
5. The process of product/services development
6. The process of defining the target market and target demographics
7. The process of communicating with internal and external stakeholders
8. The process of determining brand equity

It was my observation that if the start-up company had not followed through with the linear building of this intangible asset line, sales were either stagnating or did not attract the appropriate buyers if the company tried to employ a price skimming strategy.

Premature investment in corporate identity creation before the naming process or product development before the research into target markets led in all instances to reconsideration and further financial and time investment.

Research has found that adequate financial resources help secure the tangible side of things on which intangibles can be build. Increased development funding is a start-up competitive advantage, because augmented financial resources are used to increase firm assets (Lee, Lee, and Pennings 2001, 619).

However, consider that, simply possessing resources does not translate them into value (Priem and Butler 2001). Firms achieve value creation by gaining, combining and utilizing resources (Grant 2002).

It is therefore important to map out the steps on how to create their intangible asset chain when start-up businesses of any industry enter the market. For more information and a graphic of the Consensio Intangible Asset Chain, please contact Consensio or leave a comment.

We strive to match Plato’s world view when we describe the intangible as follows: we interpret the world in terms of archetypes (good-bad, beauty-ugly, single-multi, intangible-tangible, asset-non-asset…).We strive to define it by using changeless absolutes and look for the essence of universal truth and structure about ‘intangible assets’.

We ask what is the precise relation between the pattern of ‘intangible asset’ and the empirical world of everyday reality. Why is this important to the way we do business 2000 years later?

In scholarly debate, intangible assets (IA) are often defined as…

…including those factors that are nonphysical sources of economical benefit and are rarely, if at all included in the firm’s financial statements… Intangible resources include intellectual property, culture, reputation and know-how. The researchers found that investment in these asset groups are indeed of competitive advantage to firms (Galvin & Galbreath 2006,152).

By ascertaining the underlying patterns of things we are researching the meaning of IA. We are actually chasing Plato’s archetype of IA, the ‘veiled essence of things‘ by looking at its embodiment in non-physical sources of intellectual property, culture, reputation and know-how.

Rational philosophy forms insights but it remains an example and representation and leads further down the track to classification and compartmentalization that is cutting off what businesses in the 21st century need the most- creativity and ideas.

“There is currently no Australian Accounting Standard that comprehensively deals with intangible assets. However there are general requirements contained in a number of standards that are applied to intangible assets.“

And then the policy goes on to explain:

“The main impact of this standard on ACT Government agencies is in relation to software, as this is the only material intangible asset that is held by the ACT.“

I’m asking you- how is something “material intangible”? According to a Princeton definition it can be one or the other…If you take away the physical code of this asset, it won’t function. Operating systems in this definition are described as tangible (they are make of code, too) but application software isn’t. But for classifying reasons (and tax purposes?), we can look at it any way we want, I suppose. Further down in this defining policy:

“Internally generated brands, mastheads, publishing titles, customer lists and items similar in substance shall not be recognised as intangible assets. This is because expenditure on these internally generated intangibles cannot be distinguished from the cost of developing the business as a whole. Therefore, such items are not recognised as intangible assets”.

Brands are NOT defined as intangibles. Wow! Al these scholars who define IA’s as …must clearly not be thinking of the same thing as the policy makers in NSW!

Since 2001, where Daley found that Australia is not utilising intangible assets (IA) to its full advantage, and therefore falling behind in R&D, something interesting has happened.

The economy boomed on the back of the mining and resource demand despite study findings that the IA driven economy is the sustainable future direction for developed nations.

The advocates of social capital and the creative class seem pretty silent after the dot com crash and amongst the gold rush mentality of the current mining boom in Western Australia.

Perth, Western Australia is a prime example of a state in an identity struggle for the quest to please existing and new citizens.

Although there is a movement to revitalise the city and a call to continue with the IA paradigm to ‘build a state of creativity’ , we are a far cry from amalgamating the operational with the mundane concept of ‘culture and the arts’ in this city.

The money flow that is currently pouring down on the employees and stakeholders of the resource boom, manifests itself also in the State Governments announcements such as:

“Our scientists deserve our support…

“And so too do those employed in our creative industries.
Our local music and fashion scenes are setting the pace.
Again we have so many examples of individual brilliance
and talent in WA. So much potential. All it needed was a spark.

“Two months ago we announced the “Ignite Package” – the
single biggest ever funding boost to Western Australian
cultural and creative industries.

The $73 million injection, over and above the $160 million
already budgeted, will provide unprecedented support for
our most creative people. Support in so many ways.

• Better facilities.
• Greater reward and recognition.
• More and better performances and productions.

“So many different components – different parts of this
package – that will amaze you.

“It will also be used to lever matching donations from the
corporate sector to purchase new art. That fund should be
$25-30million….” Premier Carpenter, 13 Feb 2008 – Speech to the Committee for Economic Development Australia (CEDA)

However, increasing skills and entertainment of residing citizens does not exponentially increase IA. Should we look to IA business models for the state? Quo Vadis, creative state of mind?