Our Vision

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SKANDIA

• The service sector has few visible assets. What
  price does one assign to creativity, service
  standards or unique computer systems? Auditors,
  analysts and accounting people have long lacked
  instruments and generally accepted norms for
  accurately valuating service companies and their
  intellectual capital.

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Intellectual Capital
What is it?

• Knowledge creation
• how do we measure it
• valuing intangible assets
• why understand it
• private versus public

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Focus on Knowledge Creation Capacity
To strengthen the ability to realise future
opportunities we need to find the points of most
leverage
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Book Value versus Market Value?
Assuming book value 1
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A Traditional Model
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A Non-Traditional Model
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A More Realistic Model
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Categories of Intangible Assets

• External
• Internal
• Individual Competence

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Categories of Intangible Assets

• External
• brand
• customer loyalty
• customer advocacy
• 3rd party relationships
• track record
• reputation

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Categories of Intangible Assets

• Internal
• values
• beliefs
• behaviours
• culture
• processes
• methodologies
• market positioning
• internal communications

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Categories of Intangible Assets

• Individual Competence
• leadership
• knowledge of our people
• individual beliefs ethics
• risk taking
• commercial acumen
• intellect
• extrapolation
• conceptualisation

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Categories of Intangible Revenue

• External Structure
• Internal Structure
• Individual Competence

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Examples of Intangible Revenue

• External Structure
• referrals of new customers reduces sales
  marketing costs
• prestige makes it easier to sell to customers
  recruit new staff
• policy advice is respected and listened to
• prestige / expertise makes it easier to recruit
  new staff, work in interdepartmental teams,
  sell new initiatives, win support for business
  cases

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Examples of Intangible Revenue

• Internal Structure
• management leverage when solutions developed for
  one customer are reused
• patents projects that support knowledge
  transfer reduce dependence on individuals
• institutional knowledge and memory accessible to
  all
• knowledge management ensures historical and
  current information about policy, operations and
  regulations, is accurate, timely and relevant.

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Examples of Intangible Revenue

• Individual Competence
• learning via on-the-job training increases
  revenue creation potential and value to the
  organisation
• encourage people to maintain steep learning
  curves avoid career plateaux
• adds to calibre and reputation of organisation

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The Skandia Navigator
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The Unisys Intellectual Capital Model
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The Calculation Model
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Categories of People
Organisational Competence
Revenue Creators
Leaders
Professional Competence
Supporters
Managers
What is the right mix of people for your
organisation?
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Sample Intangible Asset Measurement

• External Structure (growth renewal)
• revenue from organisation building projects
• annuity revenues
• brand recognition rating (prompted unprompted)
• client value-add
• client referrals
• market share
• share of clients wallet

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Sample Intangible Asset Measurement

• External Structure (efficiency)
• return on investment (bid cost/bid value)
• value add/client
• contingency applied
• incentives achieved
• cost of sale
• value add/partner

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Sample Intangible Asset Measurement

• External Structure (stability)
• customer retention
• client references
• partnership measurements
• employee satisfaction
• employee referrals
• annuity revenues/all revenues
• customer complaints

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Sample Intangible Asset Measurement

• Internal Structure (growth renewal)
• revenue from image building projects
• of employees who own Unisys stock
• Unisys NZ share value
• of positive feedback from Ministers
• of staff who have specialist government
  sector expertise e.g. privacy
• benchmark values with international peers

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Sample Intangible Asset Measurement

• Internal Structure (efficiency)
• NZQF Award winner
• application of methodologies
• compliance with audit
• perfect internal transactions

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Sample Intangible Asset Measurement

• Internal Structure (stability)
• cultural alignment
• remuneration satisfaction
• employee churn
• employee retention

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Sample Intangible Asset Measurement

• Individual Competence (growth renewal)
• total company IQ, EQ, KQ ratings
• turnover
• of new ideas generated

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Sample Intangible Asset Measurement

• Individual Competence (efficiency)
• rate realisation / productivity
• morale
• client chargeability / output / KRA / FTEs
• utilisation statistics
• course attendance

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Sample Intangible Asset Measurement

• Individual Competence (stability)
• training levels achieved
• employee technical certification
• rookie ratio
• recruitment

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What Builds External Structures?

• External communication of sound, total message
• Internal communication of sound, total message
• Construction/enunciation of unique value
  propositions
• Press coverage ie. positive results
• Consistent advertising
• Business reports demonstrating value in clients
  terms
• Managed expectations
• Scorecard approach - clients/partners
• Common/consistent behaviours

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What Drains External Structures?

• Improper budget bids / opportunity qualification
• Contracting to outcomes that we cannot control
• Talking partnership with those who dont value
  partnering
• Inconsistent methodology application
• Commercial naivety
• Being too difficult to do business with
• Rigid compliance with a corporate model

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What Builds Internal Structures?

• Alignment of objectives/measurements
• Identification of acceptable behaviours
• Common business practices
• A single business model aligned with sector or
  whole of goverment
• Application of professional disciplines
• Clear consistent communications
• Easy-to-use systems
• Knowledge management systems

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What Drains Internal Structures?

• Failure to carry out decisions made
• Lack of personal accountability
• Lack of collegiate ethos
• Equating activity with progress
• Lack of management cohesion
• One rule fits all attitude
• Constant re-invention of the wheel
• Commercial naivety

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What Builds Individual Competency?

• Acceptance of skills inventory available
• Clear vision values
• Strong, agile people
• Leadership in our leaders
• Clear accountabilities and responsibilities
• Appropriate reward recognition systems
• Supportive performance management
• Appropriate tools
• A learning environment
• Investment in our people

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What Drains Individual Competency?

• Lack of think time
• Tolerating poor performance
• Inconsistent views of value
• One size fits all
• Rework
• Leadership failure
• Inconsistent hiring policies/practices
• Inappropriate incentives/rewards/recognition
• Poor business planning

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• organisations are like people. The most
  perceptive and curious live the longest. They
  stay young by testing new ways and being alert to
  new opportunities. They make the future an
  asset.

Lief Edvinsson