© josé m. viedma marti, 2001. i c the 4th world congress on intellectual capital josé maría...

© José M. Viedma Marti, 2001.

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The 4th World Congress on Intellectual CapitalThe 4th World Congress on Intellectual Capital

José María Viedma MartiProfessor of Business Administration at the Polytechnic University of Catalonia

and President of Intellectual Capital Management Systems

IICBS Innovation Intellectual Capital IICBS Innovation Intellectual Capital Benchmarking SystemBenchmarking System


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Any business sectorAny business sector

Excellent competitor

Own company

?

• Multinationals acceleratethe process

BIG COMPETITIONBIG COMPETITION

COMPETITIVE “GAP”

• Interlinked economy• Global markets• World = Global village• Telecomunications• Transportation• Strategic alliances• Strategic networks• Franchise• Cooperation agreements

Global MarketplaceGlobal Marketplace


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La Sagrada FamiliaLa Sagrada Familia


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Reality was recognizableReality was recognizable


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Harder to recognizeHarder to recognize


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You could still tell what was going onYou could still tell what was going on


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Impossible to see what was going onImpossible to see what was going on


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Sources of excellence or sustainable competitive advantageSources of excellence or sustainable competitive advantage

Most meaningful paradigmsMost meaningful paradigms

ManagementManagement Strategic ManagementStrategic Management

Virtual corporationVirtual corporation ··Resource based viewResource based view• Networking organisationNetworking organisation• Intelligent enterprise Intelligent enterprise • Knowledge creating companyKnowledge creating company• Learning organisationLearning organisation• Horizontal organisationHorizontal organisation• Centerless corporationCenterless corporation• Innovative organisationInnovative organisation

Conclusion: Knowledge and intellectual capital are theConclusion: Knowledge and intellectual capital are theonly sources of sustainable competitive advantagesonly sources of sustainable competitive advantages


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Strategy formulation: Shifting from an industry Strategy formulation: Shifting from an industry focus to a resource focusfocus to a resource focus

The FirmThe FirmThe FirmThe Firm

• Goals and ValuesGoals and Values

• Resources and CapabilitiesResources and Capabilities

• Structure and SystemsStructure and Systems

• Goals and ValuesGoals and Values

• Resources and CapabilitiesResources and Capabilities

• Structure and SystemsStructure and Systems

• CompetitorsCompetitors

• CustomersCustomers

• SuppliersSuppliers

• CompetitorsCompetitors

• CustomersCustomers

• SuppliersSuppliers

The Industry The Industry EnvironmentEnvironmentThe Industry The Industry EnvironmentEnvironment

StrategyStrategyStrategyStrategy

The Firm-Strategy InterfaceThe Firm-Strategy InterfaceThe Firm-Strategy InterfaceThe Firm-Strategy Interface The Strategy-Environment InterfaceThe Strategy-Environment InterfaceThe Strategy-Environment InterfaceThe Strategy-Environment Interface

Source: Robert M. Grant 1998.


iCBased on Robert M. Grant 1998

Strategy

Key success factorsBest in class competitors

Core capabilities

Competitiveadvantage

Resources

Tangible Intangible

Physical

Financial Human StructuralRelational

The relationships among resources, capabilities and The relationships among resources, capabilities and competitive advantagecompetitive advantage

Core capabilities = Core competencies = Intellectual capitalCore capabilities = Core competencies = Intellectual capital


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TA

NG

IBLE

RES

OU

RC

ES

Process A

Company Value Creation TreeCompany Value Creation Tree

Process C

Product A

Service B Service C

COMPETENCIES

KNOWLEDGE KNOWLEDGE KNOWLEDGE KNOWLEDGE KNOWLEDGE

HUMANCAPITAL

INTANGIBLE RESOURCES

STRUCTURALCAPITAL

RELATIONALCAPITAL

INTELLECTUALCAPITAL

PRESENT(Value Extraction)

Process A

Service A’

Product A”

Pro

cess

B

Product B’

Process C

Process C

Product C’

Service C”

CAPABILITIESKNOWLEDGE

Pro

cess

B

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© Intellectual Capital Management Systems


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Company Value Creation TreeCompany Value Creation Tree

TA

NG

IBLE

RES

OU

RC

ES

Process A

Process B

Process C

Service A

Service B

Service C

COMPETENCIESCAPABILITIES

KNOWLEDGEKNOWLEDGEKNOWLEDGEKNOWLEDGEKNOWLEDGE

HUMANCAPITAL

INTANGIBLE RESOURCES

STRUCTURALCAPITAL

RELATIONALCAPITAL

INTELLECTUALCAPITAL

PRESENT(Value Extraction)

Process A

Process A

Service A’

Service A”

Process B

Process B

Service B’Service B”

Process C

Process C

Service C’

Service C”

FUTURE(Innovation)

NEWCOMPETENCIES

NEWCAPABILITIES

KNOWLEDGE NEWKNOWLEDGE

NEWKNOWLEDGE

NEWKNOWLEDGE

HUMANCAPITAL

NEW INTANGIBLE RESOURCES

STRUCTURALCAPITAL

RELATIONALCAPITAL

NEW INTELLECTUALCAPITAL

New Process

New Product M

New Process

New Process

New Product M’

New Product M”

TA

NG

IBLE

RES

OU

RC

ES

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© Intellectual Capital Management Systems


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Business Process Value ChainBusiness Process Value Chain

CustomerNeed

Satisfied

CustomerNeed

Satisfied

Customerneed

Identified

Customerneed

Identified

InnovationValue Chain

InnovativeProducts and

Services

CurrentProducts and

Services

OperationsValue Chain

PROJECTS CURRENTPROCESS


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What to Benchmark ?What to Benchmark ?

• New Business designs• Innovation core capabilities• Innovation Intellectual Capital

Own Company Best Competitor

Fast Food Bocatta Mc Donald’sFast Food Bocatta Mc Donald’s

Application Logic Control SAPSoftware

Application Logic Control SAPSoftware

Telecommunications Ericsson NokiaTechnology

Telecommunications Ericsson NokiaTechnology

Pharmaceutical Almirall MerckServices

Pharmaceutical Almirall MerckServices

Casual Wear Cortefiel ZARARetailing

Casual Wear Cortefiel ZARARetailing


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COMPANY A COMPANY B

(h) =

The IICBS FrameworkThe IICBS Framework CustomerEmerging

Benchmarking

Project

Objetives

Project 1Objectives

COMPANY Binnovation

infraestructure

COMPANY Ainnovation

infraestructure

New Professionalcore capabilities

(h)

New Professionalcore capabilities

New companycore capabilities

(h)

NewProcesses

(h)

New companycore capabilities

NewProcesses

New Productsand services

(h)


Project (h)Objectives

Benchmarking

GAP

Benchmarking

GAP

Benchmarking

GAP

Benchmarking

GAP

Benchmarking

GAP

Benchmarking

GAP

needs

homologous


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Financial Results

Competitive Segment

environment

New core

capabilities

New professional

core capabilities

Emerging customer

needs

New products New products

and servicesand services

Competitive advantages core business activitiesCompetitive advantages outsourcing activitiesCompetitive advantages alliance activities

Project capabilitiesProject capabilities

ProjectValue Chain


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Project 1 Project 2 Project 3 Project ...n

R+D INFRASTRUCTUREa) Innovation and strategyb) Technology standardc) R+D integrationd) R+D organizatione) Innovation resource allocationf) Technology information systemsg) Technology Managements systems

R+D INFRASTRUCTUREa) Innovation and strategyb) Technology standardc) R+D integrationd) R+D organizatione) Innovation resource allocationf) Technology information systemsg) Technology Managements systems

Common R+D infrastructureCommon R+D infrastructure


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The eight factors frameworkThe eight factors framework

Emerging needs

Emerging needs

Project Objetives

Project Objetives



New core capabilities

New core capabilities

New professional core

capabilities

New professional core

capabilities

Company innovation

infrastructure

Company innovation

infrastructure

5 4

3

2

6

Financialresults

Financialresults

7

1

New processes

New processes

8

FACTORS


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• Emerging needs. Potential or emerging customer segment needs that the

company expects to cover through the project.

• Project objectives. The project is the innovation business unit that leads to

new products and services through new processes using company and

professional core capabilities and company innovation infrastructure. The

ultimate objectives of the projects are the expected financial results.

• New products and services. New products and services with their attributes

and characteristics and functions.

• New processes. Primary and support value chain activities that produce the

project’s new products and services. These activities are made up of core

project activities, outsourcing activities and strategic alliances and

cooperation agreement activities. Competitive advantages will be generated

mainly in the different value chain core project activities.

• New company core capabilities. Essential knowledge or core capabilities that

will make it possible and will give way to competitive advantages, new processes

and new products and services within the project.


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• New professional core capabilities. Professionals, managers and support staff

capabilities that will generate and perfect core capabilities and core

competencies.

• Company innovation infrastructure. Research and development infrastructure (tangible and intangible assets) that the company has and that is for the use of

the different projects.

• The company innovation infrastructure covers the following issues:

• Is technology innovation part of the business strategy?

• What is the company’s knowledge and technology standard?

• Is the R+D department working together with the other main departments?

• How well organised is the R+D department?

• How many resources are allocated to the innovation function?

• Are there any technologies informations systems? How are they performing?

• How are they performing the technology management systems?

• Financial results. Expected economic and financial results from the

project


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Specific IICBS frameworkSpecific IICBS framework

1IICBS

framework2

34

5

6

7 8

Factors

Criteria

Criteria 1

Criteria 2

Criteria 3..........

Capability 1Capability 2Capability 3..........

Human Capital 2Structural Capital 2Relational Capital 3..........

Questionnaires


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From general framework to specific frameworkFrom general framework to specific framework

General Context Specific Context

The general framework

8 factorsxx Criteria

xxx Questionnaires

The 8 Factors Framework

Competitive Benchmarking

Benchmarking

BestCompetitors

projectValue Chain

Our companyproject

Value Chain

Specific framework

8 factorsa, b,... Criteria

m,n, p... Questionnaires

Specific competitivenessfactors and criteria which

are relevant in a givenproject activity

Core CapabilitiesBenchmarking

Our company

Best internationalcompetitors

Core capabilitiesevaluation

Key competitivenessdrivers


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## ju n -0 2

M & L . F a s t n e w f a s h i o n p r o d u c t s p r o d u c t i o n

Z a r a

C O N S O L I D A T E D R E S U L T S

N E W P R O D U C T S

N E W P R O C E S S E S

N E W C O R E C A P A B I L IT I E S

N E W P R O F E S S I O N A L C O R E C A P A B I L IT IE S

C O M P A N Y I N N O V A T IO N I N F R A S T R U C T U R E

F I N A N C I A L R E S U L T S

K S F K E Y S U C E S S F A C T O R S

Q U I C K P R O D U C T I O N C Y C L E

D E S I G N T E A M

S U P P L Y C H A I N

O U T L E T S

F A S H I O N C R E A T I V I T Y

I N F O R M A T I O N , T E C H N O L O G Y , S Y S T E M S

- 5 - 4 - 3 - 2 - 1 0 1 2 3 4 5

C o n s o l i d a t e dR e l i a b i l i t y

I n d e x

C O M P E T I T O R

- 5 - 4 - 3 - 2 - 1 0 1 2 3 4 537%


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jun-02

M & L. Project Fast new fashion products production

Zara

ASSETS LIABILITIES

1.- NEW PRODUCTS 1.- NEW PRODUCTS 1.2 Price/Quality relationship 2,1 1.1 Design -1,21.7 Conformance 1,7 1.3 Embodied services -1,31.8 Garment selection 0,8 1.4 New trens adaptation -2,1

1.5 Fabric quality -1,51.6 Fashion -0,9

2.- NEW PROCESSES 2.- NEW PROCESSES 2.1 Customer needs identification 1,0 2.2 Discovering emerging needs -4,02.5 Design CAD 2,2 2.3 Selecting merket segment -3,82.6 Manufacturing CAM 1,4 2.4 Creativity -3,0

2.7 supply chain architecture -2,52.8 Process architecture -3,22.9 Logistics -3,1

3.- NEW CORE CAPABILITIES 3.- NEW CORE CAPABILITIES3.2 Supply chain architecture 1,0 3.1 FASHION CREATION -2,0

3.3 Design for manufacturability DFM -2,23.4 Supply chain design -1,93.5 Three-D.concurrent engineering -3,03.6 Quick development and production -2,3

5.- INNOVATION INFRASTRUCTURE 5.- INNOVATION INFRASTRUCTURE5.2 R+D integration 2,0 5.1 Innovation and strategy -1,0

5.3 Technology standerd -3,05.4 R+D organisation -4,15.5 Innovation resource allocation -4,05.6 Techgnology information systems -4,05.7 Technology management systems -3,9

Competitoror

INNOVATION INTELLECTUAL CAPITAL BALANCE SHEETIICBS

ConsolidatedReliability

Index

37%


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jun-02

M & L. Project Fast new fashion products production

Zara

ASSETS LIABILITIES

1.- NEW PRODUCTS 1.- NEW PRODUCTS 1.2 Price/Quality relationship 2,1 1.1 Design -1,21.7 Conformance 1,7 1.3 Embodied services -1,31.8 Garment selection 0,8 1.4 New trens adaptation -2,1

1.5 Fabric quality -1,51.6 Fashion -0,9

2.- NEW PROCESSES 2.- NEW PROCESSES 2.1 Customer needs identification 1,0 2.2 Discovering emerging needs -4,02.5 Design CAD 2,2 2.3 Selecting merket segment -3,82.6 Manufacturing CAM 1,4 2.4 Creativity -3,0

2.7 supply chain architecture -2,52.8 Process architecture -3,22.9 Logistics -3,1

3.- NEW CORE CAPABILITIES 3.- NEW CORE CAPABILITIES3.2 Supply chain architecture 1,0 3.1 FASHION CREATION -2,0

3.3 Design for manufacturability DFM -2,23.4 Supply chain design -1,93.5 Three-D.concurrent engineering -3,03.6 Quick development and production -2,3

5.- INNOVATION INFRASTRUCTURE 5.- INNOVATION INFRASTRUCTURE5.2 R+D integration 2,0 5.1 Innovation and strategy -1,0

5.3 Technology standerd -3,05.4 R+D organisation -4,15.5 Innovation resource allocation -4,05.6 Techgnology information systems -4,05.7 Technology management systems -3,9

Competitoror

INNOVATION INTELLECTUAL CAPITAL BALANCE SHEETIICBS

ConsolidatedReliability

Index

37%

KNOWLEDGE AND SKILLS ON- Gorments- Weaving- Dyeing- Printing- Finishing- Fashion trends- Best designers- Dress making - Prototypes and models- Creativity

-2,0-1,0-1,9-2,1-3,0-1,2-3,1-2,3-1,7-3,1


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• Learning from the best competitors that surpass one’s own competitive innovation capabilities

• Identifying the specific innovation capabilities factors and criteria which are relevant in a given business activity.

• Through the IICBS factors framework, enabling the identification, audit and benchmark of the innovation core capabilities or innovation intellectual capital that are the main sources of long term sustainable competitive advantages.

• When using IICBS in an orderly systematic and repetitive way we obtain innovation capabilities balance sheets, that are future oriented and complement and perfect finance balance sheets leading companies to leveraging innovation intellectual capital.

Benefits from using IICBS IBenefits from using IICBS I


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Benefits from using IICBS IIBenefits from using IICBS II

• Selecting in a systematical and organised way the necessary information for evaluating relevant factors, core innovation capabilities and innovation intellectual capital. • Identifying the key areas in which in-depth benchmarking can be carried out in the future.

• Promoting organisation learning through benchmarking teams, assessment teams, project teams and strategic teams.

• Introducing a common language for company managers when dealing with intangible and intellectual assets.


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Benefits from using IICBS IIIBenefits from using IICBS III

• Measuring the reliability concerning the relevant information and the progress of acquiring this information.

• Facilitating the work of the benchmarking and competitive intelligence teams.

• Facilitating the work of the knowledge and intellectual capital managers.

• Giving to the SME’s managers access to innovation capabilities and innovation intellectual capital management in a systematic and organised way

© josé m. viedma marti, 2001. i c the 4th world congress on intellectual capital josé maría...

Documents

intellectual capital

c tangible resources

c reality

c harder

c impossible

capabilities resources

c strategy formulation

c sources of excellence