Reshaping business and the world by leveraging knowledge intangibles
What is your favorite IC story?
This is a new category in our discussions section. Over time, we would like to get more specific with real world examples of how folks address specific IC challenges. But to kick things off, we'd like to ask for you favorite IC stories.
The story may be your favorite because of the result or the learning or the novelty. Share a short summary of the story and tell us why it is your favorite.
Cheers!
The story may be your favorite because of the result or the learning or the novelty. Share a short summary of the story and tell us why it is your favorite.
Cheers!
Views: 4
Replies to This Discussion
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Permalink Reply by Mary Adams on
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The Day Structural Capital Became Sexy
For years, people have been telling me that they can't use the term structural capital in front of "real" businesspeople. It is too geeky a term, they told me. (In the field of IC we face this with a lot of our vocabulary. But I have always thought that if we keep changing the words we use, we'll confuse people even more).
Anyway, my firm had been engaged to help the sales group in this division of a multinational. They wanted to figure out how to scale their group. While they had a dominant market share, they felt that their industry had only begun to tap potential demand. They thought the market had the potential to triple in size. The engagement didn't say anything about IC. But, in the presentation of the results to management, it was impossible to avoid it.
We presented a simple "org" chart with high level summaries in three columns under the headings human, relationship and structural capital. Their story was that human capital was strong but inadequate (in numbers) to meet the needs of the market. Relationship capital was very strong on paper as they had long-time relationships and programs in place with virtually every potential partner in the US. Structural capital was OK but had lots of room for improvement.
I looked the General Manager in the eye and said that in this structure, the first option for scaling would be to triple the sales force. He started shaking his head vigorously. So I shrugged and suggested that maybe we should look at structural capital. I explained that structural capital is captured, re-usable knowledge that, done right, makes everyone in the organization smarter and more effective.
He immediately got it and asked me if we could do a structural capital gap analysis. It was one of those moments when you want to slap your own forehead. Why didn't I think of that?
Of course, then I had to figure out how to do an assignment like that in a practical way. We have come up with an interesting approach. We're kicking off the project with a big group work session next week. I'll share how it all works in a future installment!
Anyone have other experiences with structural capital? Other IC successes or lessons? I look forward to hearing from you!
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Permalink Reply by Leif Edvinsson on -
There are many IC stories. But one of them is about 2 companies born 1947 in Sweden.
One of the is named SAAB, and is a car company, born out of the Aircraft industry. The other one is H&M and is a retail company in the fashion sector.
Both of them have generated a lot of knowledge and intellectual capital over the decades. H&M has gone global with its retail systems and branding.
However SAAB was acquired by GM, and the IC started to erode....At the same time companies like Toyota invested in pioneering car technology like in Lexus.
So what can we learn from these cases?
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Permalink Reply by Michael Oleksak on -
New Framework to Analyze Old Company
Often we look at the issues around intangible capital in theory. I’d like to describe how intangible capital has changed my approach to a new engagement.
I’ve recently been engaged as a consultant to improve a 50-year old apparel company. The company has second-generation ownership (the son of the founder) and has been trying to catch up in the world of Internet sales and marketing.
The company’s production moved to China ten years ago. This meant it reduced its manufacturing work force. The current employees handle mainly warehousing duties of the product when it is shipped back to the U.S. as well as distribution to retail outlets and big e-commerce sites.
In intangible capital terms, there are many issues this company needs to face in order to build value and increase the owner’s chances for a successful exit down the road:
Among the tasks:
1) Analyze work force to make sure they will embrace modernization of the operation. Are they ready for the future? (Human Capital)
2) Evaluate depth of management in case the owner gets hit by a bus and is out of the picture. (Human Capital)
3) Improve systems and process around marketing spend and marketing ROI (Structural Capital)
4) Enliven the brand. It has not had an updated look for many years. This will take investment. What is the unique differentiator? (Relationship Capital)
5) Ask whether the company is reaching out adequately for product and brand feedback from the market, from key stakeholders as well as industry experts? (Relationship Capital)
6) Determine whether the business model is optimized. Can revenues be accelerated? Through different channels? By introducing new or partnering with related products? By deploying other marketing vehicles? This exercise is really the transformation of a manufacturing company into a marketing company. (Business Recipe)
So when you look at a situation and can use the vocabulary and ideas of human capital, structural capital and relational capital, you have a new framework for improvement of a company’s value in the long term.
Mike
Michael Oleksak
Trek Consulting LLC
10 Mt. Vernon St. #217
Winchester, MA 01890
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Permalink Reply by Stephen Selby on -
Intellectual Capital Management is about getting a good, bird’s-eye view of the intangible assets of your enterprise, so as to help you find your way past difficulties and make your business more profitable. Things that once seemed useless or even a hindrance to development can be turned around to your advantage. The key to the process is to ‘know what you know’, so that you can put it to effective use.
Asian businessmen often turn to the ancient Chinese military classics for inspiration. Bookshops are full of editions of Sunzi’s ‘Art of War’ with useful illustrations of how ancient strategy might be used to solve modern business problems. This year is the Year of the Tiger, and that reminds me of the ‘Tiger Strategy’ recorded in the ‘Six Strategies of Tai Gong’.
Jiang Tai Gong was said to have been the mentor of the young Prince Wu back at the beginning of the Zhou Period around 1000 BCE. Whether it is true that he taught these strategies we have no way of knowing, but they have been passed down and respected down to the present day.
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“Here’s the problem,” said Prince Wu. “We’re deep in enemy territory. Our forces are surrounded by thick, high grass and scrub on both sides. Our three divisions with their horses are tired after a few hundred miles on the march. The enemy takes advantage of dry conditions and a sudden wind to set fire to the grass up-wind of us. With the fire bearing down on us and strong enemy forces at our rear, panic breaks out. What can we do?”
Tai Gong replied, “Get up onto portable lookout towers and carefully check out the terrain. If you see the fire starting to spread in front of you, quickly turn and set fire to the grass down-wind of you. As the enemy in front of you advances, you can retreat onto the earth scorched by the fire you started and hold it resolutely. The enemy forces entrenched to your rear are bound to retreat when they see your fire blowing towards them. Thus we are entrenched on scorched earth with our crack troops and crossbowmen, while fire rages around us. That way the enemy can’t harm us.”
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In this case study, Tai Gung has told his nephew to get a good overview of the situation. Then he points out how the grass and scrub, which seem to Prince Wu to be a useless impediment, and the wind and fire, which appear to the Prince to be a threat, can be turned to his advantage to beat the opposition.
ICM is like the ancient lookout towers: it is a set of tools to let you get an overview of the intangible resources in your company – some of which may at first appear to be useless or even a disadvantage. When you fully ‘know what you know’, you can find innovative strategies for turning all those elements to your advantage.
This year we are rolling out the second phase of our ‘Tiger Strategy for the Tiger Year’. I hope you will take advantage of our free service and I wish you a happy and prosperous year!
© 2012 Created by Mary Adams.
