1. Knowledge and Accounting Hubert SAINT-ONGE Chief Executive Officer, Konverge Digital Solutions Corporation Canada

2. Knowledge and Leadership in the 21 st Century presented by Hubert Saint-Onge

3. ...in addition to financial capital, the capital of an enterprise is made up of both tangible and intangible assets Intangible Assets Tangible Assets The Enterprise as a whole Financial Capital the building blocks of the enterprise...

4. Intangible Assets Tangible Assets The Enterprise as a whole Financial Capital 20% 10% 70% 1 70% 10% 20% 2 IndustrialKnowledge the emerging prevalence of knowledge capital...

5. Financial Capital Tangible Assets The Enterprise as a whole …knowledge capital is the sum of human, structural and customer capital Intellectual Capital Structural Capital Customer Capital Human Capital the components of knowledge capital...

6. Customer Capital Structural Capital Human Capital customer capital is key to financial performance… Financial Capital

7. n In the knowledge era, the social contract has irrevocably shifted from “entitlement” to “self-initiative”. Entitlement Contract submit to authority deny self expression sacrifice now for an unstated future promised benefit n In this new contract, everyone becomes a “business of one” where their capabilities are the most important assets they own n The relationship between the individual and the organization is based one’s commitment to create value in exchange for the opportunity to enhance capabilities. Personal Responsibility Contract authority within supports self expression commitment, passion, motivation, energy comes from within human capital: the new social contract…

8. Strategy Structure Systems Leadership... the manner in which individuals choose to exercise their responsibilities Culture structural capital: the elements of organizational capability

9. the culture of an organization shapes its charcater in the market place the culture of an organization shapes its charcater in the market place your culture can make or break your business your culture can make or break your business the impact of culture on the viability of an organization...

10. The commodity model focus on robust processes, seamless integration of legacy systems and efficiency for low cost provider status focus on robust processes, seamless integration of legacy systems and efficiency for low cost provider status focus on customer relationship, mass customization and knowledge exchange to generate customer loyalty to brand focus on customer relationship, mass customization and knowledge exchange to generate customer loyalty to brand The knowledge model Customer Strategy Customer Experience customers have low search costs to find competitive quotes customers have low search costs to find competitive quotes loyalty is not a factor, the switching costs for commodity products are lowloyalty is not a factor, the switching costs for commodity products are low customers have low search costs to find competitive quotes customers have low search costs to find competitive quotes loyalty is not a factor, the switching costs for commodity products are lowloyalty is not a factor, the switching costs for commodity products are low customers are looking to form trust relationship with providers to ensure long term benefits customers are looking to form trust relationship with providers to ensure long term benefits they want to be known and to be given solutions that fit their context they want to be known and to be given solutions that fit their context customers are looking to form trust relationship with providers to ensure long term benefits customers are looking to form trust relationship with providers to ensure long term benefits they want to be known and to be given solutions that fit their context they want to be known and to be given solutions that fit their context knowledge is used to reduce transaction costs by seeking and replicating best practices for efficiency knowledge is used to reduce transaction costs by seeking and replicating best practices for efficiency knowledge exchange with customer is central, provider and customer learn more from one another with each transaction knowledge exchange with customer is central, provider and customer learn more from one another with each transaction Role of Knowledge customer capital: the fundamental choice for branding

11. … shaping culture is about bringing together three elements into one definition of the corporate character what we stand for now... what we are striving to be in the future... brand positioning... …customer capital and culture

12. membership experience customer experience internal external the brand promise values, culture and leadership principles delivering on the brand promise the character of the firm … a meaningful approach to branding Values and culture serves as a key platform for enacting a meaningful branding that will shape the overall character of the organization

13. the exchange of knowledge builds these three stocks… Structural Capital organizational capabilities Structural Capital organizational capabilities Customer Capital customer relationships Customer Capital customer relationships Human Capital individual capabilities Human Capital individual capabilities knowledge value creation

14. Risk Management... the open exchange of knowledge is key to managing risk Structural Capital organizational capabilities Structural Capital organizational capabilities Customer Capital customer relationships Customer Capital customer relationships Human Capital individual capabilities Human Capital individual capabilities knowledge value creation

15. Gather information Learn Transfer Act meetings interaction with customers exchanges across organizations self-directedlearning from a variety of sources... Changes in how value is created for the customer knowledge value creation: creating conductivity

16. …leveraging organizational knowledge withoutwithout Personal Knowledge Organizational Knowledge withwith Sum total of knowledge for building customer value by any one individual a knowledge strategy

17. Organizations that do not give appropriate attention to their knowledge capital sub-optimize their performance potential because they either... leak knowledge or impede knowledge transfer the inability to leverage knowledge in the firm...

18. …organizations waste their knowledge capital …organizations waste their knowledge capital through the leakage of knowledge Structural Capital organizational capabilities Customer Capital customer relationships Human Capital individual capabilities knowledge value creation mistakes are repeated dependence on key individuals work gets duplicated good ideas don’t get shared slow to introduce new solutions competing on price customer relations are strained can’t keep up with market leaders dis-intermediated into a commodity game the profile of an organization that leaks knowledge...

19. …organizations that suppress the exchange of knowledge become less transparent or opaque and less open to internal scrutiny …organizations that suppress the exchange of knowledge become less transparent or opaque and less open to internal scrutiny Structural Capital organizational capabilities Customer Capital customer relationships Human Capital individual capabilities knowledge value creation issues are not addressed issues pile up without resolution management goes under siege fear becomes the prime motivator people cut corners to keep up performance everyone knows but no one talks conversations are suppressed everyone’s values/ethics are compromised integrity/trust deteriorates an organization that impedes the exchange of knowledge...

20. …the swamp …leadership that shapes a culture of integrity …levels of leadership integrity …levels of leadership integrity Honesty … I mean what I say … I do what I sayReliability Coherence … I stand for what I believe Vision …I lead to make it happen

21. vision vision serviceservice couragecourage systemicviewsystemicview targets targets self selfinterest “silo”view safety safety leadership is the energy that brings about integrity …

22. Give as much attention to your knowledge and intangible assets as you do to your tangible and financial assets Give as much attention to your knowledge and intangible assets as you do to your tangible and financial assets Don’t go technical and feed the leadership deficit: exercise the strength of your leadership to build the character of your organization Don’t go technical and feed the leadership deficit: exercise the strength of your leadership to build the character of your organization Model and stand for a values-centred vision of the firm Model and stand for a values-centred vision of the firm Build a worthwhile brand that is lived both externally and internally Build a worthwhile brand that is lived both externally and internally Foster open discussions of issues and provide legitimate platforms for the escalation of conflicts/issues Foster open discussions of issues and provide legitimate platforms for the escalation of conflicts/issues Engender active partnering Engender active partnering Leverage systematically the knowledge of your people to build the firm and create value for customers Leverage systematically the knowledge of your people to build the firm and create value for customers what should you do about this...

23. hubert.saint-onge@konvergeandknow.com