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Advanced tools for Visualizing, Measuring and Managing Intangibles

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Powerpoint for the 5th Workshop on Visualizing, Measuring and Managing Intangibles and Intellectual Capital. Oct. 2009 Dresden.

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Advanced tools for Visualizing, Measuring and Managing Intangibles

  1. 1. © 2009 bengin Mapping values bengin Advanced Tools for Visualizing, Measuring and Managing Intangibles 5 th European Institute for Advanced Studies in Management (EIASM), Workshop on Visualizing, Measuring and Managing Intangibles and Intellectual Capital Dresden (Germany), 8-9 October 2009 – © 2009 peter.bretscher@bengin.com – www.bengin.net
  2. 2. Speaker © 2009 bengin Mapping values Peter Bretscher, Founder and owner, Engineering Office for Business Development Ingenieurbüro für Wirtschaftsentwicklung, Eggersriet / Switzerland Function in the Ing.Büro: Advisor to organizations in the design of economic steering and management systems that integrate the intangible perspective <ul><li>Engineering background (worked 20 years in several functions along the whole value chain of an international R&D and manufacturing company based in Switzerland) </li></ul><ul><li>Developed over the last 20 years the “Business Engineering System” (Tools for Business Administration) a MindSet and models for structuring and quantifying the tangible and intangible resources. </li></ul><ul><li>In addition he is supporting companies, consultants, and other organizations in innovation and project management, in intellectual property and patent management, and in setting up business plans and defining enterprise strategy </li></ul><ul><li>He has initiated and is leading the “bengin” project. Its mission is to facilitate the awareness for and further development of management concepts that enhance the traditional economic model </li></ul><ul><li>Since 1994 he is teaching business engineering und business planning at the University of Applied Sciences in St. Gallen, Switzerland. E-Mail: [email_address] , Website : http://www.bengin.com/ , Blog: http://www.bengin.net/wp/ , Twitter: http://twitter.com/peterbretscher </li></ul>
  3. 3. Agenda <ul><li>Development of Economy </li></ul><ul><li>Innovation of Products - and Economic MindSet as a Product </li></ul><ul><li>Two Outpaced Paradigms </li></ul><ul><li>The Vector Solution </li></ul><ul><li>Conclusion and Outlook </li></ul>© 2009 bengin Mapping values
  4. 4. Development of economic assets © 2009 bengin Mapping values Relative significance of economic goods 100 60 80 40 Low middle high state of economic development 20 intangible goods tangible goods
  5. 5. Development of Business Offerings © 2009 bengin Mapping values
  6. 6. Summary <ul><li>This are two developments we see in the real reality. Intangibles are (and will be) more and more important . </li></ul><ul><li>Intangibles in a form of knowledge (use-how, make-how, think-how) and in a form of intellectual property rights . </li></ul><ul><li>In order to enable a sustainable development we need an enhanced theory that has the means for structuring and quantifying this (new) reality. </li></ul>© 2009 bengin Mapping values «Many of the patterns of nature we can discover only after they have been constructed by our mind.» Friedrich von Hayek
  7. 7. Agenda <ul><li>Development of Economy </li></ul><ul><li>Innovation of Products - and Economic MindSet as a Product </li></ul><ul><li>Two Outpaced Paradigms </li></ul><ul><li>The Vector Solution </li></ul><ul><li>Conclusion and Outlook </li></ul>© 2009 bengin Mapping values
  8. 8. Idea to Innovation Phase of incubation : 70% Phase of invention : 25% Phase of innovation : 5% Examples: Concrete 40 28 20 years Inforced concrete 22 7 18 years Aluminium 29 53 26 years Telephone ? 14 2 years Radio 56 13 2 years Radar 29 2 1 years TV 22 22 8 years Computer 115 9 5 years ICs 40 2 3 years © 2009 bengin Mapping values
  9. 9. Development of Business Theory (S-Curve of Product Development) © 2009 bengin Mapping values
  10. 10. Three Worlds – trigger for invention? © 2009 bengin Mapping values
  11. 11. World 3: Six interdependent fields © 2009 bengin Mapping values
  12. 12. World 3: Six interdependent fields © 2009 bengin Mapping values © 2009 bengin Mapping values
  13. 13. World 3: Six interdependent fields © 2009 bengin Mapping values © 2009 bengin Mapping values
  14. 14. World 3: Six interdependent fields © 2009 bengin Mapping values © 2009 bengin Mapping values
  15. 15. World 3: Six interdependent fields © 2009 bengin Mapping values © 2009 bengin Mapping values
  16. 16. World 3: Six interdependent fields © 2009 bengin Mapping values © 2009 bengin Mapping values
  17. 17. World 3: Six interdependent fields © 2009 bengin Mapping values © 2009 bengin Mapping values
  18. 18. Summary <ul><li>Tools for mapping economy and the rules for planning and reasoning business objects are divised in six interdependent specialized fields of profession. </li></ul><ul><li>In order to have an reasonable impact all areas/fields have to work on solutions. </li></ul><ul><li>Even if a coordinator would be an idea.... I expect, that the development will follow a „swarm behaviour“. </li></ul><ul><li>The direction is driven by the need for: (i) a framework that structures the intangibles and (ii) a value-metric that allows calculation with subjective values . </li></ul>© 2009 bengin Mapping values «Count what’s countable. Measure what’s measurable. Make measurable what’s not measurable.» Galileo Galilei
  19. 19. Agenda <ul><li>Development of Economy </li></ul><ul><li>Innovation of Products - and Economic MindSet as a Product </li></ul><ul><li>Two Outpaced Paradigms </li></ul><ul><li>The Vector Solution </li></ul><ul><li>Conclusion and Outlook </li></ul>© 2009 bengin Mapping values
  20. 20. Enhancing Paradigms <ul><li>Deeply ingrained assumptions, teaching programs, mental models, „taken as granted“. They determine how we are aware of the reality and influence our behaviour. </li></ul><ul><li>At least 17 paradigms to be revised. </li></ul><ul><li>Ground, Work, Capital (as resources) ... to be substituted by a framework that is based on tangible and intangible resources. </li></ul><ul><li>Value paradigm Value – as a result of a valuation process – has objective AND subjective aspects / dimensions. A scientifically correct value metric system has to reflect this necessity. Therefore it has to be multidimensional. (Linear measure vaporises the essence.) </li></ul>© 2009 bengin Mapping values
  21. 21. Objects, Attributes, Value-Measures © 2009 bengin Mapping values Imaginary Numbers Unit: iCHF, i$, i€ Subjective Numbers Real Numbers Unit: CHF, $, € Objective Numbers Resources Objects Numbers tangible intangible Complex Numbers Unit: CHF/iCHF, $/i$, €/i€ Vector Implicit Values Explicit Values combined
  22. 22. Summary <ul><li>Enhancing this two overhauled paradigms is possible. </li></ul><ul><li>(Even if it takes some time.) </li></ul>© 2009 bengin Mapping values «It is the theory which determines what we can observe.» Albert Einstein
  23. 23. Agenda <ul><li>Development of Economy </li></ul><ul><li>Innovation of Products - and Economic MindSet as a Product </li></ul><ul><li>Two Outpaced Paradigms </li></ul><ul><li>The Vector Solution </li></ul><ul><li>Conclusion and Outlook </li></ul>© 2009 bengin Mapping values
  24. 24. The Vector © 2009 bengin Mapping values 4 vectors of objects Adding vectors y x y x
  25. 25. Vector Type 1 © 2009 bengin Mapping values More samples: http://bh.bengin.com http://www.bengin.net/soft/vektorbeispiele01_d.htm
  26. 26. Vector Type 1 (Aggregation and Drilldown) Engine Chassis Body / Design Brand / Image Functionality subjective customer value (of the product)  R&D effectiveness R&D expenditures / input ressources  R&D efficiency © 2009 bengin Mapping values qualitative / subjective quantitative / financial Total (Compound) Performance Drill-Down
  27. 27. Vector Type 1 (Public Service Departments) 9 Police&Justice Public Service Departments Effects (subjective citizen perspective Costs Performance (of public service departments) 8 Others 7 Healthcare 6 Economy 5 Education 4 Infrastructure 3 Finance 2 Defense 1 Foreign Affairs © 2009 bengin Mapping values
  28. 28. Vector Type 1 (practical application) © 2009 bengin Mapping values Asking customer (Internet) Decision cockpit (links internal economic data with answers of customers)
  29. 29. Vector Type 2: Linking „objective“ with „subjective“ axis subjective (intangible) view objective (financial) view intrinsic value price © 2009 bengin Mapping values book value use value of investment for investor A price investor B is willing to pay price investor A is willing to pay use value of investment for investor B
  30. 30. Overpriced Papers? Is the Vector a prognostic tool? ....a year before the downturn of the classic curve.... ...the Vector Map indicated a change of Coca Cola Amatil......... © 2009 bengin Mapping values Stock Exchange Value 0 2000000000 4000000000 6000000000 8000000000 10000000000 12000000000 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 96 97 98 99 Value Vector 0 1000000000 2000000000 3000000000 4000000000 5000000000 6000000000 7000000000 8000000000 9000000000 0 2E+0 9 4E+0 9 6E+0 9 Explicit Values Implicit Values 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 96 97 98 99
  31. 31. 0.00 50.00 100.00 150.00 200.00 250.00 300.00 350.00 400.00 0.00 20.00 40.00 60.00 80.00 100.00 120.00 mV Food Media Services Electronic Information Technology Mechanical Industries Insurance Steel Electricity, Gas Wood Industries Bank Automobil Real estate Health iV Source: Morgan & Stanley Capital International World Index; Cited in: Sveiby, Wissenskapital; Seite 23; Mi-Verlag 1998 14 types of industry (Sveiby) © 2009 bengin Mapping values
  32. 32. Intangible Assets or Shareholders Profit Expectation? The explicit Value and the implicit Value together draw a complete picture about the company’s value and its development. The question remains: Is the implicit Value given by the real Value of the company? Is it given by some marketing tricks? Which part of it is made by the Shareholders Value Expectation? © 2009 bengin Mapping values 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 80 75 70 65 60 55 50 45 40 35 30 25 20 15 10 5 implicit value [i - Mia] explicit value [Mia] - McDonald's Microsoft IBM Ford Coca Cola
  33. 33. A better model for new decisions © 2009 bengin Mapping values Value Points of 75 enterprises 0 1'000 2'000 3'000 4'000 5'000 6'000 7'000 8'000 9'000 10'000 0 1'000 2'000 3'000 4'000 5'000 6'00 0 7'000 8'000 9'000 10'000 explicit Values implicit Values Investors: Attention! Management could use the potential more effective.
  34. 34. Tracking the development of an enterprise Question: &quot;What happened in the year 1996?“ Answer: Part of enterprise sold. 2 nd Question: Is this loss of intangible values compen-sated by the price received for the sold part of enterprise. Answer: ?  Ask Auditor – if he’s still available…. © 2009 bengin Mapping values Pointer of vector for five years 0 200 400 600 800 1'00 0 1'2 0 0 1'4 0 0 1'600 explicit axis [Mio CHF] 0 200 400 600 800 1'000 1'200 1'400 implicit axis [ Mio iCHF] 96 93 94 92 95
  35. 35. Summary <ul><li>With Vector 1 it is possible to show any desired values in context . </li></ul><ul><li>With Vector 2 it is possible to introduce a standard for subjective values . </li></ul><ul><li>After the relativity of time for the physicists 100 years ago, an analogical step can be made by economists with the relativity of value . </li></ul><ul><li>It will enable a more sustainable economy. </li></ul>© 2009 bengin Mapping values When you can measure what you are speaking about and express it in numbers, you know something about it; but when you cannot measure it, when you cannot express it in Numbers, your knowledge is of meagre and unsatisfactory kind. Lord Kelvin
  36. 36. Agenda <ul><li>Development of Economy </li></ul><ul><li>Innovation of Products - and Economic MindSet as a Product </li></ul><ul><li>Two Outpaced Paradigms </li></ul><ul><li>The Vector Solution </li></ul><ul><li>Conclusion and Outlook </li></ul>© 2009 bengin Mapping values
  37. 37. Summary <ul><li>I am very optimistic , that the economic theory will reach a higher level of applicability. </li></ul><ul><li>An enhanced economic paradigm (in that intangibles and subjective values will count) will improve the reasoning and decision process and in it‘s consequences will enable a new dimension of wealth . </li></ul><ul><li>Tree samples of influence we see at that time: </li></ul>© 2009 bengin Mapping values «Many of the patterns of nature we can discover only after they have been constructed by our mind.» Friedrich von Hayek
  38. 38. Four Main Points © 2009 bengin Mapping values 1. Structure of Enterprise 3 Offerings 7 Processes 6 Primary-Resources 2. Measures and Metrics Enhanced System of Measures that Integrates Intangibles and Subjective Metrics 3. Strategy of Enterprise Outside-In and Inside-Out 4. Optimizing Value Net From supplier of supplier to customer of customer
  39. 39. Four Main Points © 2009 bengin Mapping values © 2009 bengin Mapping values
  40. 40. Back- and Frontside of the Economics MindSet © 2009 bengin Mapping values Subjective Experiences, Values and Believes Classic Rules, Standards and Value Metrics and Measures
  41. 41. Back- and Frontside of the Economics MindSet © 2009 bengin Mapping values © 2009 bengin Mapping values
  42. 42. Pricing Values? © 2009 bengin Mapping values Tangible and intangible assets of an enterprise, potential of an enterprise, values of an enterprise Market for Papers (Stock-Exchange) How to determine „fair value“ (price) for a paper?
  43. 43. Pricing Values? © 2009 bengin Mapping values © 2009 bengin Mapping values
  44. 44. And now? <ul><li>You are welcome and invited to take part of that journey. </li></ul><ul><li>[email_address] </li></ul><ul><li>Mobile: ++41 79 650 49 04 </li></ul><ul><li>Eggersriet, Switzerland </li></ul>© 2009 bengin Mapping values A long journey begins with just one step. Chinese
  45. 45. Thank You Web http://www.bengin.com Blog http://www.bengin.net/wp/ Twitter http://twitter.com/peterbretscher Special Website http://www.bengin.net/dresden/ bengin Beyond Limits of Classic Business Paradigms © 2009 bengin Mapping values
  46. 46. © 2009 bengin Mapping values backing slides bengin
  47. 47. The four Quadrants of Value generation © 2009 bengin Mapping values Transformation (M to I) Q I Q I: Transform -M / +I - New projects - Revisions of offerings - Insourcing/merging - +M in +I -M in out -I out R&D Q II Q II:Generation +M / +I - Daily business - Selling, dispatch - (Re)Production - Value Generation Q III Q III: Transform -I / +M - Outsourcing - Leaner production - Transformation (I to M) Q IV Q IV:Degeneration -I / -M - Graveyard - Value Degeneration
  48. 48. Development of (economic) Value-Metrics (Compound Value-Metric System with the subjective, implicit Value axis) (2, 3, n-dimensional) 2. Qualitative Metrics hot, cold ...... AAA, A+, B, C 3. Quantitative Metrics (linear) Why Metrics? - comparing, comprehensible, reproducible - Making rationale (and indirect) communication easier. 1. Normative &quot;Metrics&quot; Principles, ....The xx &quot;Commandments&quot; Axis of time Measures reduce need for interpretation Strong need for interpretation $ % i$ $ Possible to calculate with and visualize 2D-Values Difficult to visualize. No tools and rules for numerical or graphical calculations. © 2009 bengin Mapping values $ % i$ $
  49. 49. Von verschiedenen Organisationen in verschiedenen Projekten © 2009 bengin Mapping values
  50. 50. © 2009 bengin Mapping values Bus. Techniques new new old old Technologies Innovating Business Models Products + Services Products + Services + Rights (IP)
  51. 51. Measuring performance http://www.performanceprofile.com http://www.balancedscoremap.com © 2009 bengin Mapping values
  52. 52. 2000 0 0 551 97 648 97 0 500 1000 1500 2500 3000 Mio 0 10 20 30 Mio mV iV SPE Initial Base (Value estimation) Initial Offer, March 24. 2000 Value (Price) Development of Paper (Shareholders view) © 2009 bengin Mapping values Evening 1st Day 1969 2'520 SPE Shareholders Profit Expectation Enterprise Value
  53. 53. Explained world Value Nach: Marle Marks, Manager Magazin 3/85 © 2009 bengin Mapping values
  54. 54. Color measures © 2009 bengin Mapping values
  55. 55. 1D – 2D rulers, metrics © 2009 bengin Mapping values
  56. 56. Vector: Velocity © 2009 bengin Mapping values
  57. 57. Next step: Focus on economic MindSetting / Paradigms © 2009 bengin Mapping values
  58. 58. Real economy New MindWare & SoftWare  quantum leap in the simulation and planning of todays economy. © 2009 bengin Mapping values Solutions (Form & Content) Hardware SoftWare Applikations Operating System MindWare Applications Economic. Theory Basics
  59. 59. Basics of 2D-Value-Vector x, y = two arbitrary properties of an object y x Illustration 1 Illustration 2 x, y = explicite (&quot;objective&quot;) and implicite (&quot;subjective&quot;) Value-Properties as a Multi-Value-Compound. © 2009 bengin Mapping values y [i$] x [$] x 1 x 2 x y x y Cost Price Turnover Volume [m 3 ] Transports initialized Transports finished Cost Deckungs-beitrag Budget Rechnung Price Retouren Medical Properties Subjective condition Turnover Mitarbeiter-zufriedenheit Turnover Sparten gewichtet Retouren Kunden-zufriedenheit x 1 x 2 Samples Sum of balance Sum of Share Price Shareholder Value Wagues Turnover Weighted added Value Price VW Price Porsche Subjective Added Value

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