Intangible But Very Real Opportunity For Consultants


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The shift to the knowledge economy has created significant gaps in management information and practices. Management consultants are perfectly positioned to help their clients bridge these gaps--and take advantage of the opportunities for growth and innovation that exist for every company today.

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Intangible But Very Real Opportunity For Consultants

  1. 1. The Intangible (But Very Real) Market Opportunity for Consultants Originally delivered to: Institute of Management Consultants USA By Mary Adams ICA-1
  2. 2. Vocabulary and mental concepts color our perceptions goluboy siniy Source: “Seeing the Blues,” Nature, April 30, 2007 ICA-2
  3. 3. Rank according to importance for the future of the firm (5 is highest) : Physical Capital: 0-5 Intellectual Capital 0-5 Inventory ___ People ___ Equipment ___ Processes ___ Buildings ___ Relationships ___ Land ___ Strategy ___ Total ___ Total ___ ICA-3
  4. 4. Every …is a knowledge business business Source: ICA-4
  5. 5. Where do you get information on these assets? Physical Capital Knowledge Capital Inventory People Equipment Processes Buildings Relationships Land Strategy ICA-5
  6. 6. The intangibles information gap is large and growing Components of S&P 500® Market Capitalization 14,000 Market Premium S& P 5 0 0 M ark et C ap ($ b illio n s) 12,000 Intangible Book Value Tangible Book Value 10,000 8,000 6,000 4,000 2,000 - 1973 1975 1977 1979 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 Data: Ned Davis Research, Inc ICA-6
  7. 7. This gap explains some big problems across our economy • Analyst over-reliance on earnings • Mergers that fail in integration • Innovation efforts that stumble on culture • Management teams that fail to see what is really going on in their businesses Companies are flying blind and they need your help ICA-7
  8. 8. Answers come from the field of intellectual capital ICA-8
  9. 9. These authors tell Organizational us that Human Structural Capital Capital intangibles Financial are a Capital system… Relational Structural Capital Business Recipe ICA-9
  10. 10. This intangibles system cannot been seen with traditional tools To get good intangibles info: • Assess rather than measure • Use strategy as your yardstick • Provide detail for each component • But do a consolidated presentation so IC is seen as a system ICA-10
  11. 11. Human Capital Do we have the right people with the right competencies to support our strategy? ICA-11
  12. 12. Structural Capital Do we have the knowledge and processes we need to deliver on our strategy? ICA-12
  13. 13. Relation- ship Capital Do we have the right external relationships to deliver on our strategy? How strong is our brand? ICA-13
  14. 14. Business Recipe Do we have a sound market opportunity? Does our strategy make sense ? ICA-14
  15. 15. In the end, summarize your assessment on one page Intellectual Capital Business Internal External Human Capital Recipe Structural Capital Structural Capital Manage- Employ- Intellectual Process Network Brand Customers Properties ment ees ICA-15
  16. 16. Where will your clients learn about these ideas? Who will help your clients apply these ideas? Should you add intangibles assessments to your business model? ICA-16
  17. 17. Want to keep learning about intangibles? Visit and Sign up for monthly updates! ICA-17