balanced scorecard in the emotional economy
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S c a n d i n a v i a n b r a n c h of S K A g l o b a l - w o r l d w i d e l e a d e r s i n k n o w l e d g e m a n a g e m e n t a n d i n t e l l e c t u a l c a p i t a l
Braintrust 2003
Balanced Scorecard in the emotional economy
Egil Sandvik & Bastian Lie-NielsenPartners
Knowledge Management Group DA
S c a n d i n a v i a n b r a n c h of S K A g l o b a l - w o r l d w i d e l e a d e r s i n k n o w l e d g e m a n a g e m e n t a n d i n t e l l e c t u a l c a p i t a l
Braintrust 2003
BusinessIQBusinessIQ-making business of knowledge
. .
++
++++
++++++
S c a n d i n a v i a n b r a n c h of S K A g l o b a l - w o r l d w i d e l e a d e r s i n k n o w l e d g e m a n a g e m e n t a n d i n t e l l e c t u a l c a p i t a l
Braintrust 2003
BusinessIQBusinessIQ-making business of knowledge
160
140
120
100
80
60
40
20
0
BIQ
HCI
FCI
SCI
CCI
ICI
AverageAverage””smartnesssmartness””
TimeTime
S c a n d i n a v i a n b r a n c h of S K A g l o b a l - w o r l d w i d e l e a d e r s i n k n o w l e d g e m a n a g e m e n t a n d i n t e l l e c t u a l c a p i t a l
Braintrust 2003
The story we are tellingScore Card
Kaplan& Norton
Balanced Score Card
Sveiby Intangible
Assets Monitor
Sandvik& Lie-Nielsen BusinessIQ
tells the story of
a SBU strategy
making the invisible visible
making business of knowledge
andmeasures
performance linked to strategy
growth, innovation,
effectiveness and stability
engagement, identity,
learning and financial
performance
S c a n d i n a v i a n b r a n c h of S K A g l o b a l - w o r l d w i d e l e a d e r s i n k n o w l e d g e m a n a g e m e n t a n d i n t e l l e c t u a l c a p i t a l
Braintrust 2003
Value Creation Bottomline
Talents The Role The Leader
Engaged Employees
EngagedCustomers
Strategy & Culture
””People first”People first”
””Tipping point”Tipping point”
””Fly wheel”Fly wheel”
The People First Model for Value Creation
S c a n d i n a v i a n b r a n c h of S K A g l o b a l - w o r l d w i d e l e a d e r s i n k n o w l e d g e m a n a g e m e n t a n d i n t e l l e c t u a l c a p i t a l
Braintrust 2003
Maslow’s Hierarchy of Needs in the emotional economy
Traditional Present
Self Realization
Recognition
Social Needs
Security
Physical Needs
S c a n d i n a v i a n b r a n c h of S K A g l o b a l - w o r l d w i d e l e a d e r s i n k n o w l e d g e m a n a g e m e n t a n d i n t e l l e c t u a l c a p i t a l
Braintrust 2003
Theoretical foundationPerspectives
”People first- perspective on Knowledge Management”
”Tipping Point”
”Fly Wheel Effect”
Empirical research
Pfeffer, JeffreyCollins, JimLev, BaruchGladwell, MalcolmThe Gallup Organization(Buckingham & Coffman)Investors in People
Concepts and strategy
Sveiby, Karl-ErikHamel, GaryPrahalad, C.K.
S c a n d i n a v i a n b r a n c h of S K A g l o b a l - w o r l d w i d e l e a d e r s i n k n o w l e d g e m a n a g e m e n t a n d i n t e l l e c t u a l c a p i t a l
Braintrust 2003
BusinessIQ Dynamic
Interactive
Emerging
Simple
Focus on developing skills and capacities to act
S c a n d i n a v i a n b r a n c h of S K A g l o b a l - w o r l d w i d e l e a d e r s i n k n o w l e d g e m a n a g e m e n t a n d i n t e l l e c t u a l c a p i t a l
Braintrust 2003
Conceptual framework BusinessIQ
. .SCISCI
HCIHCI
CCICCI
++
++++
++++++
HCI = Human Capital IndexHCI = Human Capital Index
SCI = Human Capital IndexSCI = Human Capital Index
CCI = Customer Capital IndexCCI = Customer Capital Index
ICI = Identity Capital IndexICI = Identity Capital Index
FCI = Financial Capital IndexFCI = Financial Capital Index
ICIICI
””People first”People first”
FCIFCI
S c a n d i n a v i a n b r a n c h of S K A g l o b a l - w o r l d w i d e l e a d e r s i n k n o w l e d g e m a n a g e m e n t a n d i n t e l l e c t u a l c a p i t a l
Braintrust 2003
Organizational learning
HCIHCI
Operations/goal of Operations/goal of
team/organizationteam/organization
Feedback (webbased)Feedback (webbased)
Interpretation Interpretation
(Workshop)(Workshop)
DevelopementDevelopement
(Coaching)(Coaching)
S c a n d i n a v i a n b r a n c h of S K A g l o b a l - w o r l d w i d e l e a d e r s i n k n o w l e d g e m a n a g e m e n t a n d i n t e l l e c t u a l c a p i t a l
Braintrust 2003
160
140
120
100
80
60
40
20
0
BIQ
HCI
FCI
SCI
CCI
ICI
Average Average
”smartness””smartness”
TimeTime
S c a n d i n a v i a n b r a n c h of S K A g l o b a l - w o r l d w i d e l e a d e r s i n k n o w l e d g e m a n a g e m e n t a n d i n t e l l e c t u a l c a p i t a l
Braintrust 2003
160
140
120
100
80
60
40
20
0
BIQ
HCI
FCI
SCI
CCI
ICI
Average Average
”smartness””smartness”
If you are so smart - prove it!
HCI
FCI
SCI
CCI
ICI
PeriodePeriode11 22
HCI
FCI
SCI
CCI
ICI
33
S c a n d i n a v i a n b r a n c h of S K A g l o b a l - w o r l d w i d e l e a d e r s i n k n o w l e d g e m a n a g e m e n t a n d i n t e l l e c t u a l c a p i t a l
Braintrust 2003
Vision andVision and
strategystrategy
FinancialFinancial
CustomerCustomerProcessProcess
Learning andLearning and
developementdevelopement
BSC (Kaplan&Norton)
S c a n d i n a v i a n b r a n c h of S K A g l o b a l - w o r l d w i d e l e a d e r s i n k n o w l e d g e m a n a g e m e n t a n d i n t e l l e c t u a l c a p i t a l
Braintrust 2003
BusinessIQ compared with BSC
.
LearningLearning
Engage-Engage-
mentment
Engage-Engage-
mentment
++
++++
++++++
IdentityIdentity
FinancialFinancial
Vision andVision andstrategystrategy
FinancialFinancial
CustomerCustomerProcessProcess
Learning andLearning anddevelopementdevelopement
S c a n d i n a v i a n b r a n c h of S K A g l o b a l - w o r l d w i d e l e a d e r s i n k n o w l e d g e m a n a g e m e n t a n d i n t e l l e c t u a l c a p i t a l
Braintrust 2003
Two ”similar” units in the same company- Who, A or B, has the better result?
A B
-Actively engaged 17% 55%
-Not-engaged 60% 37%
-Actively unengaged 23% 8%
S c a n d i n a v i a n b r a n c h of S K A g l o b a l - w o r l d w i d e l e a d e r s i n k n o w l e d g e m a n a g e m e n t a n d i n t e l l e c t u a l c a p i t a l
Braintrust 2003
1. Focus me2. Equip me3. Use me4. See me5. Care about me6. Develop me
What do you ask of your manager?
-Gallup--Gallup-
HCI
S c a n d i n a v i a n b r a n c h of S K A g l o b a l - w o r l d w i d e l e a d e r s i n k n o w l e d g e m a n a g e m e n t a n d i n t e l l e c t u a l c a p i t a l
Braintrust 2003
BusinessIQ=Five Capital Indexes Human Capital Index (HCI = 24) Strategy Capital Index (SCI = 19) Customer Capital Index (CCI = 14) Identity Capital Index (ICI = 21 ) Financial Capital Index (FCI = 10)
Your score = 88Average score=100Max score = about 150
S c a n d i n a v i a n b r a n c h of S K A g l o b a l - w o r l d w i d e l e a d e r s i n k n o w l e d g e m a n a g e m e n t a n d i n t e l l e c t u a l c a p i t a l
Braintrust 2003
Engagement Profitability
Human Capital Index
Care The Human Capital Index measures employee engagement
Based on research by the Gallup Organization
Expectations
Right tools
Strenghts
Recognition
Development
S c a n d i n a v i a n b r a n c h of S K A g l o b a l - w o r l d w i d e l e a d e r s i n k n o w l e d g e m a n a g e m e n t a n d i n t e l l e c t u a l c a p i t a l
Braintrust 2003
Activation Profitability
Strategy Capital Index
The Strategy Capital Index measures an organization’s knowledge sharing and implementation of its strategy
Based on theories by Dr. Karl-Erik Sveiby
Knowledge for value creation
Developing tools
Access to tools
Using tools
Customer learning
Learning together
S c a n d i n a v i a n b r a n c h of S K A g l o b a l - w o r l d w i d e l e a d e r s i n k n o w l e d g e m a n a g e m e n t a n d i n t e l l e c t u a l c a p i t a l
Braintrust 2003
Engagement Profitability
Customer Capital Index
The Customer Capital Index measures customer engagement
Based on research by the Gallup Organization
Keep promise
Fair treatment
Problemsolving
Pride
Respect
Perfect
S c a n d i n a v i a n b r a n c h of S K A g l o b a l - w o r l d w i d e l e a d e r s i n k n o w l e d g e m a n a g e m e n t a n d i n t e l l e c t u a l c a p i t a l
Braintrust 2003
Identity Unique and demanded
Identity Capital Index
The Identity Capital Index measures how you are mastering your corporate identity
Based on research by Gioia, Dennis and James
Mission
Vision
Position
Core competence
Values and culture
Image
S c a n d i n a v i a n b r a n c h of S K A g l o b a l - w o r l d w i d e l e a d e r s i n k n o w l e d g e m a n a g e m e n t a n d i n t e l l e c t u a l c a p i t a l
Braintrust 2003
The FCI calculates the Financial value of the firm using the marketvalue to equity.
Customer Capital
Structural Capital
Human Capital
Visible Equity $5.7 Bn
FinanceDebt
FCI ~ 3232
Market Value ~ $190 BnAug 21 00 $40.90
External Structure
Internal Structure
Indiv. Competence
$11 Bn
Assets
Nokia ’s Invisible Balance Sheet, Q3 2000
Karl Erik Sveiby 1997-1999 All rights reserved
Tangible Assets
Intangible Assets orIntellectual Capital~$183 Bn
Brand$38 ”
Brand value by Interbrand
S c a n d i n a v i a n b r a n c h of S K A g l o b a l - w o r l d w i d e l e a d e r s i n k n o w l e d g e m a n a g e m e n t a n d i n t e l l e c t u a l c a p i t a l
Braintrust 2003
Capital indexes as measurement tools Simple indexes that capture emotions and
relations of customers and employees Simplyfies the ideas of Balanced Score Cards The next-generation’s climate-, satisfaction-,
culture- and customersurveys. Builds on research on ”people first” management,
”Fly wheel” effect and ”tipping point” theory (six steps)
S c a n d i n a v i a n b r a n c h of S K A g l o b a l - w o r l d w i d e l e a d e r s i n k n o w l e d g e m a n a g e m e n t a n d i n t e l l e c t u a l c a p i t a l
Braintrust 2003 BusinessIQBusinessIQ-making business of knowledge
. .
++
++++++++++
Develop and manage emotions Manage intellectual capital to improve
your business performance Make the strategy work for people Predict future earnings Making business of knowledge
S c a n d i n a v i a n b r a n c h of S K A g l o b a l - w o r l d w i d e l e a d e r s i n k n o w l e d g e m a n a g e m e n t a n d i n t e l l e c t u a l c a p i t a l
Braintrust 2003
Knowledge Management Group DA - Scandinavian branch of SKAglobal
About Knowledge Management Group DA
KMG DA is a company developing tools and processes for the knowledge-based organization.
KMG DA runs The Norwegian Forum for Intellectual Capital and Consortium for Intellectual Capital. Counting in excess of 170 members, the Forum is the arena for developing knowledge management and intellectual capital in practice for Scandinavian businesses. In 2001, the Forum and Consortium was awarded “Best Work 2001” by Sveiby Knowledge Associates, its work was published in Fortune Magazine and Thomas Stewart’s book, “The Wealth of Knowledge”.
Knowledge Management Group’s visionKMG DA translates new knowledge of value creation to practical leadership for the
knowledge-based company. Knowledge Management Group DAKMG DA assists and facilitates the development of strong brands and action-based
organizational cultures by using tools and processes developed for the knowledge-based company.
KMG DA emphasizes helping organizations understand, share and apply their existing knowledge of customers and organization. We want to make organizations better for people.
S c a n d i n a v i a n b r a n c h of S K A g l o b a l - w o r l d w i d e l e a d e r s i n k n o w l e d g e m a n a g e m e n t a n d i n t e l l e c t u a l c a p i t a l
Braintrust 2003
Knowledge Management Group - The people
Egil Sandvik (56)Managing Partner, Chartered Member SKA Globalegil@kmgroup.no
Bastian Lie-Nielsen (41)Partner, Chartered Member SKA Globalbastian@kmgroup.no
Christian Rangen (28) Junior Partnerchristian@kmgroup.no
www.kmgroup.no
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