intangible but very real opportunity for consultants
DESCRIPTION
The shift to the knowledge economy has created significant gaps in management information and practices. Management consultants are perfectly positioned to help their clients bridge these gaps--and take advantage of the opportunities for growth and innovation that exist for every company today.TRANSCRIPT
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The Intangible(But Very Real)
Market Opportunityfor Consultants
Originally delivered to:Institute of Management
Consultants USABy Mary Adams
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Vocabulary and mental concepts color our perceptions
Source: “Seeing the Blues,” Nature, April 30, 2007
siniy goluboy
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Rank according to importance for the future of the firm (5 is highest) :
___Total___Total
___Strategy___Land
___Relationships___Buildings
___Processes ___Equipment
___People___Inventory
0-5Intellectual Capital0-5Physical Capital:
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Every business
Source: http://mstrepair.com/
…is a knowledge business
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Where do you get information on these assets?
StrategyLand
RelationshipsBuildings
Processes Equipment
PeopleInventory
Knowledge CapitalPhysical Capital
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The intangibles information gap is large and growing
Components of
- 2,000
4,000
6,000
8,000
10,000
12,000 14,000
1973 1975 1977 1979 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005
Market Premium Intangible Book Value Tangible Book Value
Components of S&P 500® Market Capitalization
- 2,000
4,000
6,000
8,000
10,000
12,000 14,000
1973 1975 1977 1979 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005
S&P 500 M
arket Cap ($ billions)
Market Premium Intangible Book Value Tangible Book Value
Data: Ned Davis Research, Inc
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This gap explains some big problems across our economy• Analyst over-reliance on earnings
• Mergers that fail in integration• Innovation efforts that stumble on culture
• Management teams that fail to see what is really going on in their businesses
�Companies are flying blind and they need your help
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Answers come from the field of intellectual capital
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HumanCapitalHumanCapital
Organizational Structural
Capital
Organizational Structural
Capital
Relational Structural
Capital
Relational Structural
Capital
FinancialCapital
BusinessRecipeBusinessRecipe
FinancialCapital
BusinessRecipeBusinessRecipe
These authors tell us that intangibles are a system…
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This intangibles system cannot been seen with traditional tools
To get good intangibles info:• Assess rather than measure • Use strategy as your yardstick • Provide detail for each component • But do a consolidated presentation so IC is seen as a
system
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Do we have the right people with the right competencies to support our strategy?
Human Capital
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Do we have the knowledge and processes we need to deliver on our strategy?
Structural Capital
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Do we have the right external relationships to deliver on our strategy?
How strong is our brand?
Relation-ship Capital
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Do we have a sound market opportunity?
Does our strategy make sense ?
Business Recipe
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In the end, summarize your assessment on one page
Human CapitalInternal
Structural Capital
Network Brand CustomersProcess
ExternalStructural Capital
Employ-ees
Manage-ment
IntellectualProperties
BusinessRecipe
IntellectualCapital
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Where will your clients learn about these ideas?Who will help your clients apply these ideas?Should you add intangibles assessments to your business model?
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