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. Projects & Why they Matter: Captur ing Intangible Value . Fundamental Message What applies at the macro level also applies at the micro level The Intangibles Challenge NEW YORK ; Jan 29, 2004 According to Accenture global survey

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projects why they matter captur ing intangible value

.

Projects & Why they Matter:

Capturing Intangible Value

Lea Symonds June 2007

fundamental message

Fundamental Message

What applies at the

macro level

also applies at the

micro level

the intangibles challenge

The Intangibles Challenge

NEW YORK ; Jan 29, 2004

According to Accenture global survey

“Half of senior executives believe that managing intangible assets is one of the top three management issues facing their companies today.”

fundamental question

Fundamental question

What is an intangible?

what are intangibles

What are Intangibles ?

Anything in an organisation thatgenerates value that you cannotdrop on your foot!”

The Economist

about intangibles

About Intangibles

Aren’t articulated in numbers (but make up what is behind them)

Are ambiguous

Easy to miss the opportunity they offer

Long to build/quick to lose

Need gifted and insightful leadership to realise the benefits on behalf of the business

fundamental question10

Fundamental question

What measures are currently being used?

balanced scorecard

Balanced Scorecard

Kaplin & Norton’s balanced scorecard is a useful performance measurement framework well known to business.

4 Dimensions are:

-Financial -Customer -Internal -Innovation & Learning

balanced scorecard12

Balanced Scorecard

Financial – return on capital, return on sales, sales growth, return on assets etc (desiredoutcome)

Customer Perspective – satisfaction,growth of customer base, service delivery (project driver)

Internal Process Perspective – order taking, fulfilment & delivery, client information ( project driver)

Innovation & Learning – performance mgt, career development, knowledge capture ( intangible)

the invisible balance sheet

The invisible balance sheet

Karl- Erik Sveibytalks of an invisible balance sheet for measuring intangible assets

Internal structure: patents concepts, models, computer & admin systems. Created by employees and“owned” by the organisation. Culture or esprit d’corpsbelongs here too.

External structure: relationships, stakeholder/customer satisfaction, strategic partnerships, brand names, trademarks, reputation, image.

Individual competence: skills, education experience, values, leadership and social skills.

slide15

.

Question: Did Nokia really “lose” US $86 billion worth of intangible assets (or intellectual capital) in a year?

Answer: Share price is a perception about future– will fluctuate with general economy

fundamental message16

Fundamental Message

“I don’t believe any numbers I haven’t already massaged myself!”

Gerhard Cerny

CIO of Siemens Business Services

fundamental message18

Fundamental Message

In a knowledge economy the tangibles & the“intangibles” are all about people as the organisation’s sole profit generators…

peoples’ actions as revenue creators

peoples’ knowledge & competence as wealth creators

people who create & maintain value

fundamental questions

Fundamental Questions

What is this project’s value to the business?

How should we measure value…. and what should we know about “intangibles” ?

fundamental message21

Fundamental Message

Value is defined by receiver more than the giver

projects organisational value

Projects & organisational value

Project deliverables (tangibles)are only a start.

What intangibles do projects offer?

name the intangibles24

Name the Intangibles

Build Organisational Capability(innovation,new ways to do business, more complex projects extend competence)

Competitiveness(speed to market,speed to change)

Support Brand & Reputation

Goodwill(customer/stakeholder)

Investor Confidence(flagship projects)

Support Strategic Intent

Strategic Alliances/Partnerships

what other intangibles at your table group identify 2 more
What other intangibles?

At your table groupidentify 2 more.

name the intangibles26

Name the Intangibles

Talent(incubator, extender, attractor)

Knowledge Management (transfer knowledgefrom experienced to the inexperienced)

Career Building (talent spotters, networks)

Employee Development & Extension(skills building, mentoring, coaching)

Leader Development

Translate Organisation Values into Practice

Change Agents (experience in facilitating change)

name the intangibles27

Name the Intangibles

Workforce Recruitment & Retention

Incentives, Rewards & Recognition

Diversity ( Generational mix)

Culture (Organisation & Team)

Collaborative Cross Business Synergies

Intellectual Capital

Relationship Building & Networks(External & Internal)

warning dysfunctional projects will fail to capture the value of the intangibles
Warning

Dysfunctional projects will fail to capture the value of the intangibles!

how can you use this the elevator speech
How can you use this?

The elevatorspeech…

the elevator speech

The elevatorspeech…

Our project is on track to deliver identified tangible benefits.

You might also be interested to know how else it is supporting strategic intent and building organisational capability in areas such as talent management, career planning and brand enhancement…….

Yeah!!!

b usiness r ealities p eople

Business Realities - People

Skills shortages – recruiting & retaining

Mobile workforce – meeting career needs

Diversity in workforce – Gen X Y & BB

Markets–Global vs traditional

Where work is done – alternate locations/virtual work sites

Labour Cost - “cheap” labour source options

quote

Quote

Many firms have intangible assets – knowledge, relationships, reputations and people.

However, only some firms succeed in converting these assets into intangible capital.

Intangible assets only create value when captured asintellectual property, networks, brand, and talent.

These four intangibles are the scarce resources of the intangible economy.

The Intangible Economy and Australia

By John Daley Australian Journal of Management, Vol. 26, Special Issue, August 2001, © The Australian Graduate School of Management

intangibles

Intangibles

“The effectiveness of your intangible assets (knowledge, relationships, motivation and speed), determines organisational performance, retention, returns, loyalty, service and satisfaction.

Underperforming organisations have underperforming intangible assets.”

Dr Ken Standfield,Chairman International Intangible Management Standards Institute.

􀁏

references
References
  • Karl-Erik Sveiby: The Invisible Balance Sheet
  • Murphy & Simon: The Intangible benefits valuation in ERP Projects, Florida International University
a f inal w ord

A Final Word…

You know ….

That absenteeism, sick leave, accidents, all reduce productivity, revenue, and earnings as well as result in cost wastage - but what is the financial value?

That when people do not share their knowledge or have low-quality knowledge, that productivity, revenue, and earnings are lost as well as costs being wasted - but what is the financial value?

That ineffective collaboration results in lost productivity, revenue, and earnings as well as wasted costs - but what is the financial value?

That knowledge is valuable, but what is the contribution of knowledge to revenue, costs, and earnings?

That collaboration is valuable, but what is the contribution of collaboration to revenue, costs, and earnings?

That organizational culture is valuable, but what is the contribution of culture to revenue, costs, and earnings?

Its hard to put a financial value on staff engagement or disengagement.

Its hard to determine the costs and benefits associated with strategic execution - the project related operational activities that either create or prevent strategic success.