1. That
was
then

2. This
is
now

3. It’s a seismic shift
Agricultural Era  Industrial Era  Knowledge Era

4. Understanding the shift
Industrial  Knowledge Era
Tangible  Intangible Assets
Factory  Knowledge Factory

5. It’s been fueled by investment
http://www.conference-board.org/data/intangibles/

6. Where has the money gone?
…to build knowledge assets:
• In computers
• In workforces
• In processes
• In designs,
products
• In networks
• In brands

7. Investment created new value
Source: Ocean Tomo
“Intangible,”
off-balance
sheet portion of
corporate value

8. Shift happened economy-wide
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Energy
Materials
Industrials
Consumer Discretionary
Consumer Staples
Health Care
Financials
Telecommunications Services
Information Technology
Utilities
Intangible Value as a % of Total Market Capitalization
by Sector
1975
2005

9. For now, holding at +/- 80%

10. This is
about the
rise of a
new kind of
economic
asset

11. What
is IC?

12. Human Capital
• Employees:
– Competencies
– Experience
– Loyalty
• Management
– Industry experience
– Managerial expertise

13. Structural
Capital
• Processes/IT (the heart of modern business)
• Technology/IP
– Data, stored information and knowledge
– Own product/service designs and knowledge
– Intellectual property (patents, trademarks,
copyrights, trade secrets)
• Sales and marketing processes

14. Relationship
Capital
• Customers
• External partners (suppliers, outsourcing
partners, regulators, communities, press)
• Brand and Reputation (the new bottom
line)

15. Strategic
Capital
• Business model
– How the knowledge factory fits together
• Culture
• External factors:
– Industry
– Economy
– Competition
– Globalization
– Regulation

16. -Measure
-Manage
-Monetize
IC Management

17. Benefits of IC Management
• Optimized performance
Healthcare co grew revenues with lower headcount
• Increased innovation
High-end consulting firm doubled in size
• Higher valuation
Tech firm sold at premium to the market
• Great reputation
Engineering firm doubled key hourly rates

18. www.smarter-companies.com