Making Better Corporate Decisions with Intangible Capital Visualization
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Making Better Corporate Decisions with Intangible Capital Visualization

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These slides are from a meeting of the KM Forum in Boston where Mary Adams told five stories of the power of intangibles visualization: performance, value, innovation, reputation and growth. For more ...

These slides are from a meeting of the KM Forum in Boston where Mary Adams told five stories of the power of intangibles visualization: performance, value, innovation, reputation and growth. For more information visit http://i-capitaladvisors.com/

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    Making Better Corporate Decisions with Intangible Capital Visualization Making Better Corporate Decisions with Intangible Capital Visualization Presentation Transcript

    • Using Intangible Visualization to Support Corporate Decisions How to become an intangible capitalist Mary Adams I-Capital Advisors ICA-1
    • Intro to intangible capital ICA-2
    • Undefined, intangible portion of corporate value Components of S&P 500® Market Capitalization 14,000 Market Premium 12,000 Intangible Book Value Tangible Book Value 10,000 8,000 S&P 500 Market Cap ($ billions) 6,000 4,000 2,000 - 1973 1975 1977 1979 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 Research: Ned Davis ICA-3
    • Knowledge Assets ICA-4
    • Model of how IC pieces fit together From You Can Grow Like Google on YouTube ICA-5
    • Three ways to measure intangibles Assessment (qualitative) Investment Corporate Intangibles (financial) Performance Management (quantitative) ICA-6
    • 1. How to grow? Scaled business using balanced IC investment, especially structural capital ICA-7
    • Gaps in structural capital Need to add headcount National relationships ICA-8
    • 2. How to improve performance? Optimized structural capital infrastructure ICA-9
    • Developing ID four core Program processes Relationships Motivating Referral Closing Developing HCO Sale Relationships ICA-10
    • Map each process as a value network Intangible exchange Tangible exchange Role Tangible Role exchange Intangible exchange ICA-11
    • ICA-12
    • 3. How to innovate? Evaluated IC as the innovation ecosystem ICA-13
    • Intellectual Capital A Bus. Recipe Organisational Human Capital Relational AA BBB A BBB Current strength I.P Process Management Employees Network Brand Customers BBB BBB AA BB A BBB Intellectual Capital BB Bus. Recipe Organisational Human Capital Relational BBB BBB CCC BBB Preparation for future I.P Process Management Employees Network Brand Customers Intellectual Capital BBB BB CC B AA BBB R Bus. Recipe Organisational Human Capital Relational R R R R I.P No value Process R Management RR Employees R Network RR Brand R Customers Risk ICA-14
    • Experience in core competencies 83 Renewal of productivity Ability tackle new projects 74 57 39 55 Vulnerability defection Training/education 74 Equal competence level Employees AA CC R While the staff is perceived as having the capacity to deliver world class performance, other capabilities are less certain . . Developing or expanding capabilities could be hindered by the fact that training and education efforts are largely informal and non-standardized. ICA-15
    • 4. How to acquire knowledge? In mergers, most people ignore important structural capital and fail to understand relationship between IC and valuation ICA-16
    • Mergers are 70% intangible Tangible, 30% Goodwill, 47% Intangible, 23% E&Y: Acquisition Accounting – What’s Next for You? Global sample of 700+ mergers in 2007 ICA-17
    • Most deals ignore SC ICA-18
    • Map multiples against IC Best 8x Average 4x Low 2x Human Structural Relationship Strategic ICA-19
    • 5. How to build reputation? Helped stakeholders see inside the IC “black box” to attract new clients at higher rates ICA-20
    • Visualization of a six- inch methodology notebook ICA-21
    • For better decision making… • Remember that intangibles dominate value creation, revenue and expenses • Use IC buckets to be clear about type of knowledge asset (human, relationship, structural capital) • Use all three kinds of measurement (financial, quantitative, qualitative) • Visualization cuts through complexity ICA-22
    • Resources Slides at slideshare.com/maryadamsica Newsletter: Management 2.0 last Tues of month Book: www.intangiblecapitalbook.com Community: www.icknowledgecenter.com Blog: www.smartercompaniesblog.com Mary Adams, 781-729-9650 adams@i-capitaladvisors.com Twitter: maryadamsica ICA-23