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.

1. The Intangible
(But Very Real)
Market Opportunity
for Consultants
Originally delivered to:
Institute of Management
Consultants USA
By Mary Adams
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2. Vocabulary and mental
concepts color our perceptions
goluboy
siniy
Source: “Seeing the Blues,” Nature, April 30, 2007 ICA-2

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 ___
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4. Every
…is a knowledge business
business
Source: http://mstrepair.com/
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5. Where do you get information on
these assets?
Physical Capital Knowledge Capital
Inventory People
Equipment Processes
Buildings Relationships
Land Strategy
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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
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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. 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
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8. Answers
come from
the field of
intellectual
capital
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9. These
authors tell
Organizational
us that
Human
Structural
Capital
Capital
intangibles
Financial
are a
Capital
system…
Relational
Structural
Capital Business
Recipe
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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
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11. Human
Capital
Do we have the
right people
with the right
competencies
to support our
strategy?
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12. Structural
Capital
Do we have the
knowledge and
processes we need to
deliver on our strategy?
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13. Relation-
ship
Capital
Do we have the right external
relationships to deliver on our
strategy?
How strong is our brand? ICA-13

14. Business
Recipe
Do we have a
sound market
opportunity?
Does our
strategy make
sense ?
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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
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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?
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17. Want to
keep
learning
about
intangibles?
Visit www.i-capitaladvisors.com and
www.icknowledgecenter.com
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