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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:
Capturing Intangible Value
Lea Symonds June 2007
What applies at the
also applies at the
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.”
What is an intangible?
Anything in an organisation thatgenerates value that you cannotdrop on your foot!”
Aren’t articulated in numbers (but make up what is behind them)
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
What measures are currently being used?
Kaplin & Norton’s balanced scorecard is a useful performance measurement framework well known to business.
4 Dimensions are:
-Financial -Customer -Internal -Innovation & Learning
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)
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.
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
“I don’t believe any numbers I haven’t already massaged myself!”
CIO of Siemens Business Services
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
What is this project’s value to the business?
How should we measure value…. and what should we know about “intangibles” ?
Value is defined by receiver more than the giver
Project deliverables (tangibles)are only a start.
What intangibles do projects offer?
Build Organisational Capability(innovation,new ways to do business, more complex projects extend competence)
Competitiveness(speed to market,speed to change)
Support Brand & Reputation
Investor Confidence(flagship projects)
Support Strategic Intent
At your table groupidentify 2 more.
Talent(incubator, extender, attractor)
Knowledge Management (transfer knowledgefrom experienced to the inexperienced)
Career Building (talent spotters, networks)
Employee Development & Extension(skills building, mentoring, coaching)
Translate Organisation Values into Practice
Change Agents (experience in facilitating change)
Workforce Recruitment & Retention
Incentives, Rewards & Recognition
Diversity ( Generational mix)
Culture (Organisation & Team)
Collaborative Cross Business Synergies
Relationship Building & Networks(External & Internal)
Dysfunctional projects will fail to capture the value of the intangibles!
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…….
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
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
“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.
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.