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In previous posts we?ve mentioned accurate but hard ways to value your intellectual property using financial analysis. There is also a fast and easy way of valuing intellectual property. I call this approach Naked Valuation? because you are going to compare your business to a similar business without your intellectual property.

This technique will help you make the business case for design thinking more easily by quickly providing additional economic evidence that investment in design will increase the value of your business. To get started, ask:

?If I copied all your land, buildings, equipment & machinery, and then employed dozens of well trained but totally inexperienced laborers to do your jobs. Then what can you do today that they couldn?t do??

The answer may well tell you a lot about where the real intellectual property is in your business.

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To perform a Naked Valuation? on a product instead of a business, simply identify the value of an asset with the trait that you are valuing and compare it to a similar asset without the trait. For example:

* Coca Cola sells for $2.69 for 1.5 litres at my local store, the private label store brand sells for $1.39 for the same volume. A value on intellectual property of 48% of the total price.

* A 2009 Lexus ES sells for $41,000 whereas a Toyota Camry from the same manufacturer with the same design sells for $32,000. To be fair the Lexus includes upgrades that if added to the Toyota would cost around $3,000. Even so, the branded premium is still $6,000 or 15% of the total price.

* A nice New Zealand Sauvignon Blanc will retail for $30 whereas an unbranded ?cleanskin? version of the same wine could sell for as little as $10. For a brand and reputation value of 66% of the total price.

There are lots of other reasons for these price differences and the total return on intellectual property is a function of both price and volume. Even so, the insight remains? to get a quick test of the value of a piece of intellectual property, look for the nearest substitute without your intellectual property and compare the economic value of the two.