Using Intangible Visualization to
 Support Corporate Decisions


                   How to become
                    an i...
Intro to intangible capital




                              ICA-2
Undefined,
                                                                                    intangible portion
        ...
Knowledge
 Assets




            ICA-4
Model of how IC
pieces fit together




From You Can Grow Like Google on YouTube


                                       ...
Three ways to
      measure
     intangibles                            Assessment
                                       ...
1. How to grow?

   Scaled business using balanced IC
 investment, especially structural capital



                      ...
Gaps in
              structural
               capital




Need to add
headcount
                              National
 ...
2. How to improve performance?

 Optimized structural capital infrastructure




                                         ...
Developing                  ID four core
                   Program                     processes
                 Relatio...
Map each
                         process as a
                        value network

           Intangible
           exc...
ICA-12
3. How to innovate?

 Evaluated IC as the innovation ecosystem




                                        ICA-13
Intellectual Capital
                                                               A



 Bus. Recipe              Organis...
Experience in core
                                       competencies
                                             83



...
4. How to acquire knowledge?

 In mergers, most people ignore important
  structural capital and fail to understand
   rel...
Mergers are 70% intangible

                                                         Tangible, 30%



     Goodwill, 47%

...
Most deals
ignore SC




             ICA-18
Map multiples against IC

   Best
          8x




Average
          4x




  Low
          2x


               Human   St...
5. How to build reputation?

     Helped stakeholders see inside
      the IC “black box” to attract
       new clients at...
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 t...
Resources
Slides at slideshare.com/maryadamsica
Newsletter: Management 2.0 last Tues of month
Book: www.intangiblecapitalb...
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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 information visit http://i-capitaladvisors.com/

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Making Better Corporate Decisions with Intangible Capital Visualization

  1. 1. Using Intangible Visualization to Support Corporate Decisions How to become an intangible capitalist Mary Adams I-Capital Advisors ICA-1
  2. 2. Intro to intangible capital ICA-2
  3. 3. 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
  4. 4. Knowledge Assets ICA-4
  5. 5. Model of how IC pieces fit together From You Can Grow Like Google on YouTube ICA-5
  6. 6. Three ways to measure intangibles Assessment (qualitative) Investment Corporate Intangibles (financial) Performance Management (quantitative) ICA-6
  7. 7. 1. How to grow? Scaled business using balanced IC investment, especially structural capital ICA-7
  8. 8. Gaps in structural capital Need to add headcount National relationships ICA-8
  9. 9. 2. How to improve performance? Optimized structural capital infrastructure ICA-9
  10. 10. Developing ID four core Program processes Relationships Motivating Referral Closing Developing HCO Sale Relationships ICA-10
  11. 11. Map each process as a value network Intangible exchange Tangible exchange Role Tangible Role exchange Intangible exchange ICA-11
  12. 12. ICA-12
  13. 13. 3. How to innovate? Evaluated IC as the innovation ecosystem ICA-13
  14. 14. 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
  15. 15. 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
  16. 16. 4. How to acquire knowledge? In mergers, most people ignore important structural capital and fail to understand relationship between IC and valuation ICA-16
  17. 17. 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
  18. 18. Most deals ignore SC ICA-18
  19. 19. Map multiples against IC Best 8x Average 4x Low 2x Human Structural Relationship Strategic ICA-19
  20. 20. 5. How to build reputation? Helped stakeholders see inside the IC “black box” to attract new clients at higher rates ICA-20
  21. 21. Visualization of a six- inch methodology notebook ICA-21
  22. 22. 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
  23. 23. 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

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