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Knowledge Assets Creating, Measuring and Managing Intellectual Capital Advisory Agenda • • • • • Recap previous modules Creating knowledge assets Measuring knowledge assets Managing knowledge assets Q&A What is knowledge? • Discuss between groups and each develop a working definition • knowledge defined: “understanding gained through experience or study” What are knowledge assets? • Discuss between groups and each develop a working definition • Knowledge assets = Intellectual Capital = “knowledge which can be exploited for financial or other reward” Other foundation questions • Where does Knowledge reside in an organisation? • Who is responsible for knowledge management Knowledge Capture • The process of extracting and capturing the thoughts and experiences of experts • How? – interviews – questionnaires – observations – brainstorming – writing Tacit vs explicit knowledge Source: A D Marwick, Knowledge Management Technology Codification • Getting the right knowledge to the right people at the right time – Organising knowledge and presenting it in a coherent manner – Converting tacit knowledge into explicit knowledge – Communicating who has relevant tacit knowledge and how to contact them KM Concept People Content Technology Source: Awad & Ghaziri, Knowledge Management Conventional IC Model Skandia IC concept Skandia IC framework Definition of Intellectual Capital The factors not shown in the traditional balance sheet... that are of critical importance to a company’s future success. What is Measured? • Business Recipe – Business idea, business strategies, business environment • Intellectual Property – Patents, licenses, in-house developed software • Process – Methods, manuals, IT systems • Employees – Competence, motivation, loyalty, incentives • Management – Qualities, abilities, management methods • Network – Business partners and other external connections, contributing to fulfilling company needs • Brand – Awareness, attention, differentiation • Customers – Image, relations, loyalty, potential When Should You Measure IC? • M&A – Either prior to selling or buying a company, or as a feature of post acquisition integration, an IC Appraisal will give you invaluable information as to future earnings potential and critical success factors • Benchmarking – When you have several units you want to compare, either within companies or between companies, IC Appraisals provide you with a standardized tool and terminology • Organisational Development – An IC Appraisal pinpoints areas to improve and lets you measure improvements consistently over time • External Reporting – There is an increasing demand for transparency in company reporting. An IC Appraisal complements traditional financial reporting and provides a comprehensive and future-oriented view of your company How to Measure? • • • • Extensive individual interviews Internal & external respondents Strategic and operational respondents Structured questions tailored to specific type of business • Both quantitative and qualitative data Value Platform Human Capital Organisational Structural Capital Financial Capital Relational Structural Capital Business Recipe The IC Rating TM Framework IC Rating TM : Three Focuses 1. Efficiency 2. Risk 3. Renewal and Development Present day Accounting Present value of IC efficiency in creating future financial value Threat against present efficiency * probability of threat coming true Efforts to renew and develop present efficiency IC Rating Efficiency AAA AA A BBB BB B TM Scales Risk R RR RRR Renewal & Development AAA AA A BBB BB B CCC CC C CCC CC C D D Executive View BB Efficiency BBB Renewal Intellectual Capital Intellectual Capital CC A Business Recipe C IP Organisation CC Process BB BBB BB BB Human Relation Business Recipe Organisation BB B Management Employees A Network BB BBB BBB BB Brand Customers IP Process Risk A BBB Human Relation A A Management Employees RR Intellectual Capital - RR Business Recipe - RR - Process Relation Human Organisation - R IP RRR Management R RR Employees RRR Network Brand Customers BB CCC Network Brand BBB+ A Customers Executive View - Matrix Risk AAA Efficiency AA Nw A BR BBB BB Cu Bd Mg B Em CCC Pr IP CCC B BB BBB A AA AAA Renewal Operational View Relation Non-vulnerability 75 86 57 Strategic Supplier Interaction 80 31 77 25 11 79 56 Usage Rate 54 71 76 78 Duration of 73 79 81 Customer 78 Relation Competence Enhancing Image Creating Process Strengthening Respondent View • Categorized document showing comments from respondents • All comments are anonymous • Provides qualitative feedback and often useful suggestions for improvement Q&A Contact Details Brett Shadbolt, Managing Director Censere Group Mobile +852 9199 9140 E-Mail [email protected] Website http://www.censere.com