Identifying and measuring ic

Identifying and measuring the unique IC of a company

Source: Corrado and Hulten (2010). Last point plotted is 2007.

Intangible capital•Computerized information

– Software

– Databases

•Innovative property – R&D, broadly

defined

– Copyrights and licenses

– Designs

•Economic competencies

– Marketing and branding

– Strategic firm practices

Intangible vs. tangible investment rate rises over time in the United States

www.conference-board.org/data/intangibles/

Investment patterns shifting…

…but the investments are invisible

Source: Ocean Tomo

Intangibles information gap

Intangible book value

Tangible book value

“When the map and the territory don’t agree, always believe the

territory”

Gause and Weinberg

describing Swedish Army Training

Employees collaborating together

and with external partners

to create re-usable knowledge, designs and processes

that meet market needs via a viable business model

Intangible capital territory

Strategic Capital

Human Capital

Relationship Capital

Structural Capital

Identifying and measuring the unique IC of a company

Example of a software and service company in the healthcare field

Questions to identify core IC

1. What do you do to create value and get paid by your clients (strategic capital)?

2. What are the key processes and knowledge that support the model (structural capital)?

3. Who are the key partners that support the model (relationship capital)?

4. What are the key competencies your people need to support the model (human capital)?

5. How do these pieces fit together and link to a market (strategic capital)?

How do you get paid?

Strategic Capital

What’s your key technology/IP?

Structural Capital

What are the key processes supporting this business model?

Structural Capital

Partners and Customers?

Relationship Capital

…and core competencies?

Human Capital

How does it all fit together and link with the market?

Strategic Capital

Stakeholders assessment Performance Areas Score Range

1-Management

3.40 Average

Hum

mn

2-Employees

3.60 Above Average

3-Processes/Systems/IT

3.39 Average

4-Marketing and Sales Processes

3.60 Above Average

Str

uctu

ral

5-Technology/IP

3.74 Above Average

6-Customer Base

3.53 Above Average

7-Network/Non-Customer Relationships

3.21 Average

Rel

atio

nshi

p

8-Brand

3.18 Average

9-Business Model

3.40 Above Average

Str

ateg

ic

10-External Factors

3.97 Above Average

…visual report of scoring

1.00

1.50

2.00

2.50

3.00

3.50

4.00

4.50

5.00

Human Capital StructuralCapital

RelationshipCapital

StrategicCapital

Another example

Healthcare Staffing Company

Knowledge Factory

IC Assessment

1.00

1.50

2.00

2.50

3.00

3.50

4.00

4.50

5.00

HumanCapital

StructuralCapital

RelationshipCapital

StrategicCapital

More resources

Methodology ICValueDrivers.com

Book IntangibleCapitalBook.com

Articles/Blog SmarterCompaniesBlog.com

Community ICKnowledgeCenter.com

Company TrekConsulting.com

Mary Adams 781-729-9650

adams@i-capitaladvisors.com