Search results

The business world has enthusiastically adopted the idea that knowledge has become the most strategic of corporate assets, the principal basis for competitive advantage. This enthusiasm has not, however, been matched by an understanding of how to operationalize knowledge. It seems we argue that knowledge is important largely because it is a different kind of asset. While this is perplexing and suggests that it is important to understand the strategic significance of the different kinds of organizational knowledge, it also raises operational issues for managers. How are they to identify knowledge assets, and measure them? We offer tentative proposals for a new approach to assets evaluation.

This paper provides an overview of Fujitsu’s sense and response approach towards performance management. It is demonstrated using a case example of call center performance as part of Fujitsu Services. Call centers (or contact centers) are often used as case examples of how not to measure and manage performance. An operational bias towards efficiency measures often fails to provide the customer focus needed and even has dysfunctional consequences. This case study demonstrates how Fujitsu moved away from the efficiency trap, and completely redesigned their performance management system to focus on their customer needs and the intangible drives of value creation. It will highlight the lessons learned, the pitfalls as well as the achievements.

The balanced scorecard (BSC) is a management tool that helps to align behavior of all employees to the organization’s strategy. Research suggests that about half of large US firms have already adopted the BSC and many more are considering implementation. Organization‐wide implementation of a BSC requires IT support and numerous software vendors have taken the opportunity to build software solutions to support a BSC implementation. The problem executives face today is that there are over two‐dozen application‐providers to choose from, each of them claiming that their solution offers unique and important features. Selecting the wrong solution can undermine the entire BSC development effort and the credibility of the performance management system. This article addresses the issue of BSC software by (1) explaining why organizations might need software to support their implementation and (2) by developing a framework to assist organizations in this important decision process.

With their most recent publications on the balanced scorecard, Kaplan and Norton have focused on the learning and growth perspective in an attempt to clarify its constituent parts, as they acknowledge that many organizations struggle with what to include in this perspective. For that reason Kaplan and Norton introduce the concept of intangible assets as the content of the learning and growth perspective. They classify intangible assets into human capital, information capital, and organization capital. However, it is believed that this latest attempt to evolve the balanced scorecard might have an adverse effect. This article outlines how Kaplan and Norton failed to acknowledge the large body of literature on intangible assets and, therefore, produced an inconsistent, incomplete, and potentially very confusing classification of intangible assets.

Organizations are recognizing that if they want to survive and prosper in the long run they need to strategically manage their intangible assets. New theories of strategic management such as the resource‐based view show that organizations can only gain sustainable competitive advantages if they are focusing on the development of their value drivers. Intangible assets such as know‐how, brands, copyrights, patents and relationships with customers or suppliers, are key value drivers in today’s business world. It is therefore critical for organizations to identify, understand, and manage these organizational value drivers. This article outlines the process of how organizations can identify their key resources – tangible and intangible – as well as their interdependence and causal dynamics to deliver value. An improved understanding of the strategic resource architecture helps to overcome causal ambiguity of how value is created and helps to direct resource allocation and competence acquisition.

Intellectual capital is an important value driver in today’s organizations. Traditional financial statements do not provide the relevant information for managers or investors to understand how their resources – many of which are intangible – create value in the future. Intellectual capital statements are designed to bridge this gap by providing information about how intellectual resources create future value. Intellectual capital statements can be used as tools to communicate the knowledge‐based strategy externally but it can also be used as an internal management tool. In this article we outline the reasons for reporting intellectual capital, introduce the elements of such statements, and present a case example from a Danish mobile phone design company.

The purpose of this paper is to provide a review of an analytic methodology (knowledge valuation analysis, i.e. KVA), based on complexity and information theory, that is capable of quantifying value creation by corporate intellectual capital. It aims to use a real‐world case to demonstrate this methodology within a consulting context.

The fundamental assumptions and theoretical constructs underlying KVA are summarized. The history of the concept, a case application, limitations, and implications for the methodology are presented.

Although well‐known financial analytic tools were used to justify IT investment proposals, none provided a satisfying result because none offered an unambiguous way to tie IT performance to value creation. KVA provided a means to count the amount of corporate knowledge, in equivalent units, required to produce the outputs of client core processes. This enabled stakeholders to assign revenue streams to IT, develop IT ROIs, and decide with clarity where to invest.

When stakeholders can assign revenue streams to sub‐corporate processes, they have a new context for making IC investment decisions. “Cost centers” and decisions based on cost containment can be replaced. Concepts such as a knowledge market, the knowledge asset pricing model, k‐betas, and a sub‐corporate equities market can be developed and applied. Some of the limitations related to real options analysis can be resolved.

This paper introduces an approach to measuring corporate intellectual capital that solves some long‐standing IC valuation problems.