Capabilities that are difficult to define, also referred to as ‘soft’ capabilities are intangible assets. The dynamic capabilities approach recognises that generation, ownership and management of intangible assets have powerful implications for building and maintaining a competitive advantage. Teece claims that they are so important that ‘Such assets are the new “natural resources” of the global economy.’ (Teece, 2011, p. 2). Examples identified by Teece are:
1 Technological know-how. How to connect the iPad to the printer over WiFi or how to simplify and save money on an Ocado delivery.
2 A family’s business model for a given market. That is, the ability to create a unified, organised, healthy, loving unit that can be tailored to community, church or school events.
3 Business process know-how. For example, how to order school uniforms and keep track of sizes for hand me downs or making shop bought mince pies look homemade for the school cake sale.
4 Customer and business relationships. Identifying the parish priest and building a relationship with him based on at least one of the parents attending church once a week for the duration of the school application window. Thus hoping the family has secured a place at the local catholic school.
5 Reputations. Very important to families. From simple things like remembering birthdays or posting Christmas cards, through to possessing the most expensive items you can afford. Also, the home must be impeccable when entertaining visitors. A family’s reputation or standing in society dictates which social events the family is invited to.
6 Family cultures and values. What the family stands for. Keeping traditions alive by dragging their children to indigenous festivals or forcing them to learn archaic, dying languages then dressing them in traditional garb for a school show and tell.
7 Formally identified intellectual property. Unfortunately, for families, there is no way of securing the copyright to the ability to balance a child on one hip, pick up a pair of soiled pants with your foot and close the dishwasher with your bum.
An intangible asset is generally hard to develop, difficult to manage, costly to transfer and problematic to specify. Consequently, intangible assets are unlikely to be bought and sold. Nevertheless, they clearly have significant implications for families seeking to develop and maintain dynamic capabilities, and particularly so in settings where the pursuit of competitive advantage is so important.
Teece, D.J. (2011) ‘Dynamic Capabilities: A Guide for Managers’, Ivey Business Journal Online, vol. 75, no. 2. p. 29.