Workshop Tokyo October 2012

© 2012 Wissenskapital ZFI/ECI GmbH

Japan October 2012

Mart Kivikas

S. 1


State-of-the-art

• On Intellectual Capital Reporting (or Intangible Assets based Management)

• On IC Statement and Management Reporting

• On Intellectual Property Rights

• On IC of Cities

• On Economic Policy

S. 2

© 2012 Wissenskapital ZFI/ECI GmbH S. 3

Key Questions for Business Success

1. How can I keep and improve my competitive position?

2. What do we do differently and better than our competitors?

3. How can I avoid making a wrong decision? How support and find new

innovations?

4. How can we manage quality and service as well as production in our

value chain?

5. What can I as a leader have real impact on?


Quelle: © 4Value Management Consulting GmbH

Modern Leadership


Human-capital

Structural-capital

Relational-capital

Service-quality

Product-quality

Business Concept

Finding Skills HC

Build StructuresHC -> SC

Ready for MarketRC

Spin-off of Companies

t0 ... tX

Growth

High Value Added Work

Regional

Prosperity

Financial Indicators Non-financial Indicators

Working Model of Sevilla Global?


Strategic Goals Fomento San Sebastian


Would You Invest?


Fraunhofer IPK © 2008 , No. 8

Result: Priority Map for Investment or InterventionQQS-Bar-Chart: Human Capital (HC)

0 30 60 90

HC-1

HC-2

HC-3

HC-4

Systematic (%) Quality (%) Quantity (%)

HC-4 Leadership AbilityHC-3 Employee MotivationHC-2 Social CompetenceHC-1 Professional Competence

Internal Co-operation & Knowledge Transfer

Leadership Ability


Prel. IC Map Fomento San Sebastian



Fraunhofer IPK © 2008 , No. 11

0,25Y – 1Y

1Y – 2Y

0,25Y – 1Y

1Y – 2Y

0,25Y – 1Y

0,25Y – 1Y

1Y – 2Y

>2Y

1. product process

8. co-operation/ knowledge

transfer

10. product

innovation

12. Customer relations

27. financial results

28. image/brand

5. employee motivaionleadership

Strong impact

Very strong impact

Generator

Y = Year

www.incas-europe.org

Software… Taxonomy..

Process /Systems Dynamics


Portfolio Matrix


The Logic behind the Earnings Capability Index (ECI)™

Current Earnings Competitiveness Ability to Change

Cost / Income RatioValue 0,0 %Score 0Weight 1

0

CashValue 0,0 %Score 0Weight 2

0

ProfitabilityValue 0,0 %Score 0Weight 1

0

Earnings sustainabilityValue 0,0 %Score 0Weight 1

0

Weighted SumWeight short termWeight mid termWeight long term

Short term EC forecast 0

Custome ValueValue 0,0 %Score 0Weight 1

0

Market PositionValue 0,0 %Score 0Weight 2

0

Quality and Systematic Relational CapitalValue 0,0 %Score 0Weight 2

0

Quality and Systematic Structural CapitalValue 0,0 %Score 0Weight 1

0


40 %40 %20 %

Mid term EC forecast 0

Innovation and Growth CapabilityValue 0,0 %Score 0Weight 2

0

Payroll FlexibilityValue 0,0 %Score 0Weight 1

0

Quality and Systematic Human CapitalValue 0,0 %Score 0Weight 2

0

Interdependency Analysis HC, SC and RCValue 0,0 %Score 0Weight 2

0


5 %50 %45 %

Long term EC forecast 0

Earnings Capability Index (ECI)™= Forecast on Business Success

and Profitability

80 %15 % 5 %


Relatives GNP PPP European countries vs. USA 1990-2006.


A joint triple helix action needed!

• On Intellectual Capital Reporting (or Intangible Assets based Management)

• On IC Statement and Management Reporting

• On Intellectual Property Rights

• On IC of Cities

• On Economic Policy

S. 15


Thank You!

The IC Statement

The Financial Statement

© Leif Edvinsson


Short term earnings capability:Current earnings status

Mid term earnings capability:Competitiveness

Long term earnings capability:Ability to change

Intangibles

Employees, Who contribute with their

knowledge and competences

Internal Processes, i.e.efficient processing of the production of

goods or services, internal requests, logisitcs etc.

Networks,including customers, suppliers, investors and cooperation with

other companies

- Motivation- Qualification- Leadership

Business Success Factors

- Product cycle time- Quality of the processes- Processes of communication- Risk management

- Customer satisfaction- Customer structures- Investor relations - Suppliers

Financial indicators;- Cost / Income Ratio- Return on Equity- Return on Capital Employed- Return on Investment

Key Perfomance Indicators (KPI)

Cashflow indicators;- Equity ratio- Debt equtiy ratio- Solvency- Cashflow margin

The systematic of business success;- Development of profitability- Business development - Development of cycle times- Customer acquisition


The framework of the German “Wissensbilanz”

Commercial environment(Possibilities & risks)

Business processesBusiness processes

Business- Strategyknowledge

VisionBusinesssuccess

Knowledge processes

Financialresources

Initialsituation

Humancapital

Structuralcapital

Relationalcapital

Intellectual capital External

impact

Measures

Organization


Steps Criterias Sources

1. Current financial situation Profitability/Cash Annual Report, Bankratings, BSC

2. Competiveness Customer segments, branch, competitors,structural- and relational capital

Business environment analysis, Intellectual Capital Statement, BSC

3. Ability to change Innovation capability, fixed vs. Variable costs, human capital

Intellectual Capital Statement, BSC

4. (Future) Earnings Capability (steps 1 to 3)

Earnings Capability Index™

Analyse of steps 1 to 3.

5. Management action points Activity plan ECI report, BSC

6. Implementation (in business operations)

i.e. CRM or HR development

i.e. job and process descriptions, customer survey

7. Follow-up, controlling Verification of index Actuals vs. Plan, KPI (adjusted)

Documents

Workshop Tokyo October 2012