1. DEAN of CBA Business School ZAGREB/ EU Expert Brussels. 1 BHRMDA Albena, May 19, 06 HUMAN RELATIONS : THE KEY OF COMPETITIVENESS IN THE EU LISBON STRATEGY

2. DEAN of CBA Business School ZAGREB/ EU Expert Brussels. 2 BHRMDA Albena, May 19, 06 CHAPTER 1: A SHARP TRANSFORMATION… (Peter DRUCKER)

3. BHRMDA Albena, May 19, 06 DEAN of CBA Business School ZAGREB/ EU Expert Brussels.3 P. Drucker: Transformation Every few hundred years in Western History there occurs a sharp transformation. Within a few short decades, society rearranges itself : its worldview (paradigm), its basic values, its social and political structures, its arts, its key institutions. Fifty years later there is a new world.” Peter DRUCKER: “Post Capitalist Society”. p.1.

4. BHRMDA Albena, May 19, 06 DEAN of CBA Business School ZAGREB/ EU Expert Brussels.4 Transition to Transmodern Death ?

5. BHRMDA Albena, May 19, 06 DEAN of CBA Business School ZAGREB/ EU Expert Brussels.5 One of the most fundamental shifts “We are living through one of the most fundamental shifts in History: “We are living through one of the most fundamental shifts in History: a change in the actual belief structure of Western Society. a change in the actual belief structure of Western Society. No economics, political or military power can compare with the power of a change of mind. No economics, political or military power can compare with the power of a change of mind. By deliberately changing their images of reality, people are changing the world.” Willis HARMAN Stanford Research Institute, Founder of the “World Business Academy” (+1997) By deliberately changing their images of reality, people are changing the world.” Willis HARMAN Stanford Research Institute, Founder of the “World Business Academy” (+1997)

6. DEAN of CBA Business School ZAGREB/ EU Expert Brussels. 6 BHRMDA Albena, May 19, 06 CHAPTER 2: WHAT IS KNOWLEDGE SOCIETY?

7. BHRMDA Albena, May 19, 06 DEAN of CBA Business School ZAGREB/ EU Expert Brussels.7 ONE EXAMPLE The EU web master One small entreprise won the bid for the EU Web. Big contract. One small entreprise won the bid for the EU Web. Big contract. Capital and technology are 10% Capital and technology are 10% Human capital = 90% Human capital = 90% Management is “humble” Management is “humble” –Facilitator –Networker –Caring for HR: Please come back tomorrow!

8. BHRMDA Albena, May 19, 06 DEAN of CBA Business School ZAGREB/ EU Expert Brussels.8 EXAMPLE II Entreprise was sold. Very expensive. Entreprise was sold. Very expensive. New management was “industrial” arrogant, pyramidal. Failure. New management was “industrial” arrogant, pyramidal. Failure. Return of the old CEO! Return of the old CEO! Back to new HR management! Back to new HR management! SUCCESS again. SUCCESS again. Crucial importance of HR management Crucial importance of HR management

9. BHRMDA Albena, May 19, 06 DEAN of CBA Business School ZAGREB/ EU Expert Brussels.9 DEFINITIONS Data: what is on the web, unorganised Data: what is on the web, unorganised Information: is already sorted by google. Too much Information: is already sorted by google. Too much Knowledge: is digested by human brain. not enough Knowledge: is digested by human brain. not enough Wisdom: is rare. Not enough. New mission of the bsuiness. Wisdom: is rare. Not enough. New mission of the bsuiness.

10. BHRMDA Albena, May 19, 06 DEAN of CBA Business School ZAGREB/ EU Expert Brussels.10 DEFINITIONS Info-Knowledge FREE TRADE (ICT S) FREE TRADE (ICT S) Industrial Pyramid Industrial Pyramid + I.C.T. (technology) + I.C.T. (technology) Pyramids Pyramids FREE TRADE FREE TRADE Unemployment Unemployment Pollution Pollution Quantitative growth Quantitative growth FREE SHARE (KS) FREE SHARE (KS) Post-industrial-capit. Post-industrial-capit. A new Society A new Society Network =value creation Network =value creation FREE SHARING FREE SHARING self-creation of jobs self-creation of jobs Immetrialization of prod. Immetrialization of prod. Qualitaitve growth Qualitaitve growth

11. BHRMDA Albena, May 19, 06 DEAN of CBA Business School ZAGREB/ EU Expert Brussels.11 Knowledge society= Post capitalist? (Peter Drucker 1993)  Value creation is linked to knowledge applied to knowledge.= new tool of production >capital>technol.  Quality of knowledge is more important than quantity. Progress becomes more qualitative than quantitative.  MEASUREMENT is more qualitiative: Two Schools of economists…

12. BHRMDA Albena, May 19, 06 DEAN of CBA Business School ZAGREB/ EU Expert Brussels.12 Knowledge society= Post capitalist? II  Knowledge is increased only by sharing in a network. This is an inclusive logic. (like love !).  From FREE trade towards FREE sharing  Thus crucial importance of being in a good network in order to increase knowledge by sharing. (See Verna ALLEE)

13. BHRMDA Albena, May 19, 06 DEAN of CBA Business School ZAGREB/ EU Expert Brussels.13 Knowledge society III Secrecy and patenting are in crisis Secrecy and patenting are in crisis The global strategy is shifting The global strategy is shifting from win-loose (industrial) to Win-Win from win-loose (industrial) to Win-Win From exclusion(industrial) to inclusion From exclusion(industrial) to inclusion From command and control to enabling creativity and sharing From command and control to enabling creativity and sharing

14. BHRMDA Albena, May 19, 06 DEAN of CBA Business School ZAGREB/ EU Expert Brussels.14 The “Human capital” Management : shifts 180° towards human centeredness = more creativity-centred, gender & culture – centred. Management : shifts 180° towards human centeredness = more creativity-centred, gender & culture – centred. The “Common good” (human) aims of the enterprise towards society at large are becoming more important : because of reputation & brand and intangible assets. The “Common good” (human) aims of the enterprise towards society at large are becoming more important : because of reputation & brand and intangible assets. Example: “ASCII” which manages EU site: “www.europa.eu.int Example: “ASCII” which manages EU site: “www.europa.eu.int

15. BHRMDA Albena, May 19, 06 DEAN of CBA Business School ZAGREB/ EU Expert Brussels.15 HUMAN RELATIONS = CRUCIAL Caring for Human relations are at the source of value creation. Caring for Human relations are at the source of value creation. Because this is enhancing “human capital” Because this is enhancing “human capital” HR policies are thus becoming central… HR policies are thus becoming central… Unless the negative scenario of manipulation of human brain becomes effective… Unless the negative scenario of manipulation of human brain becomes effective…

16. BHRMDA Albena, May 19, 06 DEAN of CBA Business School ZAGREB/ EU Expert Brussels.16 INTANGIBLE ASSETS « Intangible assets » is a new concept invented by Karl Erik SVEIBY (Sweden) « Intangible assets » is a new concept invented by Karl Erik SVEIBY (Sweden) They are becoming more and more important in the knowledge society They are becoming more and more important in the knowledge society Because the knowledge society is about knowledge which is intangible and qualitative. Because the knowledge society is about knowledge which is intangible and qualitative.

17. BHRMDA Albena, May 19, 06 DEAN of CBA Business School ZAGREB/ EU Expert Brussels.17 INTANGIBLE ASSETS II Intangibles assets = Intangibles assets = –Know how, –Reputation, –Trust in the company, –Relations with personnel, –Relations with clients, –Relations with stakeholders, –Relations with neighbourhood +nature –Relations with civil society

18. BHRMDA Albena, May 19, 06 DEAN of CBA Business School ZAGREB/ EU Expert Brussels.18 MEASURING INTANGIBLE ASSETS I Two Schools of economists Two Schools of economists –Majority: trying to quantify the qualitative –Minority: accepting to cope with qualitative dimension in NEW economics…

19. BHRMDA Albena, May 19, 06 DEAN of CBA Business School ZAGREB/ EU Expert Brussels.19 MEASURING INTANGIBLES II Stock exchange measurements are still looking at financial “tangible” assets (quantitative) but they increasingly look at “intangible” assets (qualitative). Stock exchange measurements are still looking at financial “tangible” assets (quantitative) but they increasingly look at “intangible” assets (qualitative). Today a company is measured more and more by its intangible assets. Today a company is measured more and more by its intangible assets. Example: “Men’s Wear” USA. & “World Business Academy”, “Spirit in Business”. Example: “Men’s Wear” USA. & “World Business Academy”, “Spirit in Business”. See also Neskey: www.neskey.com See also Neskey: www.neskey.comwww.neskey.com

20. BHRMDA Albena, May 19, 06 DEAN of CBA Business School ZAGREB/ EU Expert Brussels.20 Intangible indicators grow Transparency ICT Proliferation Financial indicators remain important Non-financial indicators grow in importance Potential for greater participation and wider accountability PAST PRESENT FUTURE

21. BHRMDA Albena, May 19, 06 DEAN of CBA Business School ZAGREB/ EU Expert Brussels.21 GROWING IMPORTANCE OF INTANGIBLE ASSETS (II)

22. BHRMDA Albena, May 19, 06 DEAN of CBA Business School ZAGREB/ EU Expert Brussels.22 BUSINESS & SOCIETY: a new relation Industrial objects are “tangibles” & ethically neutral. Industrial objects are “tangibles” & ethically neutral. Knowledge is “intangible” & always linked to a meaning and thus to ethics. Knowledge is “intangible” & always linked to a meaning and thus to ethics. Producing knowledge thus involves a meaning and a business reputation = an “intangible” asset. Producing knowledge thus involves a meaning and a business reputation = an “intangible” asset.

23. BHRMDA Albena, May 19, 06 DEAN of CBA Business School ZAGREB/ EU Expert Brussels.23 SUSTAINABILITY & INCLUSION AS KEY “INTANGIBLES” Because of the steady increase of importance of intangible assets Because of the steady increase of importance of intangible assets Because of the link between sustainability + inclusion and Humanity’ s future Because of the link between sustainability + inclusion and Humanity’ s future Companies that will be seen as caring for Humanity’s future will have an increasing intangible value. Companies that will be seen as caring for Humanity’s future will have an increasing intangible value. Their stock value will skyrocket soon… Their stock value will skyrocket soon…

24. BHRMDA Albena, May 19, 06 DEAN of CBA Business School ZAGREB/ EU Expert Brussels.24 HR ANOTHER MAIN INTANGIBLE HR is important because it is another intangible asset. HR is important because it is another intangible asset. Not only it increases Human creativity and thus the value creation… Not only it increases Human creativity and thus the value creation… But it increases the positive energy inside and around the company… Thus the intanbgible assets… But it increases the positive energy inside and around the company… Thus the intanbgible assets…

25. BHRMDA Albena, May 19, 06 DEAN of CBA Business School ZAGREB/ EU Expert Brussels.25 BUSINESS STRATEGIES IN KNOWLEDGE SOCIETY (I) 90 % of the EU Business leaders choose the « information society » appraoch =FREE TRADE: 90 % of the EU Business leaders choose the « information society » appraoch =FREE TRADE: –More capital + advanced technology 10% of the EU Business leaders choose the « knowledge society » approach: 10% of the EU Business leaders choose the « knowledge society » approach: –human creativity > € >technol. –Enterprise in Network: win-win strat. –Human capital= not a cost but key asset

26. BHRMDA Albena, May 19, 06 DEAN of CBA Business School ZAGREB/ EU Expert Brussels.26 Consequences for the Business (II) IN US, only the « Knowledge society » business (10%) have survived the dot.com crash: Example: CISCO IN US, only the « Knowledge society » business (10%) have survived the dot.com crash: Example: CISCO Because they have changed : Because they have changed : –The tools (ICT) –The structure of their enterprise –The underlying vision of their scope and values (Verna ALLEE)

27. DEAN of CBA Business School ZAGREB/ EU Expert Brussels. 27 BHRMDA Albena, May 19, 06 CHAPTER 3: THE LISBON STRATEGIES AND THE FUTURE OF EU

28. BHRMDA Albena, May 19, 06 DEAN of CBA Business School ZAGREB/ EU Expert Brussels.28 LISBON STRATEGIES LISBON I 2000-05 LISBON I 2000-05 FREE SHARE FREE SHARE Post industrial Post industrial Post capitalist Post capitalist NOT EXPLAINED NOT EXPLAINED …FAILURE …FAILURE LISBON II 2005-10 LISBON II 2005-10 FREE TRADE FREE TRADE Old Industrial Old Industrial Capitalist Capitalist Business as usual Business as usual Easier Easier

29. BHRMDA Albena, May 19, 06 DEAN of CBA Business School ZAGREB/ EU Expert Brussels.29 LISBON STRATEGIES CONCLUSION: CONCLUSION: Lisbon strategy I had thus done the right choices: KS+ sustainability + inclusion! Lisbon strategy I had thus done the right choices: KS+ sustainability + inclusion! BUT it failed to explain the new vision and the new economic frame: FREE SHARE BUT it failed to explain the new vision and the new economic frame: FREE SHARE Lisbon II strategy weakens EU’s competitive position in the long term. Lisbon II strategy weakens EU’s competitive position in the long term. BUT it is easier to apply in short term. BUT it is easier to apply in short term.

30. DEAN of CBA Business School ZAGREB/ EU Expert Brussels. 30 BHRMDA Albena, May 19, 06 A WIN WIN STRATEGY FOR EUROPE?

31. BHRMDA Albena, May 19, 06 DEAN of CBA Business School ZAGREB/ EU Expert Brussels.31 EU : A WIN-WIN STRATEGY The obstacles to the free trade/industrial information society strategies The obstacles to the free trade/industrial information society strategies …become advantages in the knowledge society. …become advantages in the knowledge society. BECAUSE The basic logic is different, almost opposite. BECAUSE The basic logic is different, almost opposite.

32. BHRMDA Albena, May 19, 06 DEAN of CBA Business School ZAGREB/ EU Expert Brussels.32 WHEN OBSTACLES BECOME ADVANTAGES Free trade obstacles Free trade obstacles Social protection Social protection Environm.protect. Environm.protect. Women family prog. Women family prog. Development prog Development prog Sharing technology Sharing technology Advantages Know. So Advantages Know. So Help natural networks Help natural networks Intangible asset Intangible asset Increase creativty Increase creativty Win-Win for EU Win-Win for EU Win-win strategy Win-win strategy

33. BHRMDA Albena, May 19, 06 DEAN of CBA Business School ZAGREB/ EU Expert Brussels.33 EU: CONDITION of SUCCESS The only condition for success in this KNOWLEDGE society is to understand that we are entering in a new society: new vision, new structure new economic logic. The only condition for success in this KNOWLEDGE society is to understand that we are entering in a new society: new vision, new structure new economic logic. It is easier for the business to say this than for politics and administrations It is easier for the business to say this than for politics and administrations Hence the new mission of the world Business. Hence the new mission of the world Business.

34. BHRMDA Albena, May 19, 06 DEAN of CBA Business School ZAGREB/ EU Expert Brussels.34 BULGARIA: WIN-WIN? When society changes, the new winners are rarely the same. Innovation comes from the periphery, or from new actors. When society changes, the new winners are rarely the same. Innovation comes from the periphery, or from new actors. Will Bulgaria become a leader in this Free Share, post-industrial approach? Will Bulgaria become a leader in this Free Share, post-industrial approach? Will Bulgaria become a hub of societal innovation towards this new economy? Will Bulgaria become a hub of societal innovation towards this new economy? This could be a win-win for the whole of the EU. This could be a win-win for the whole of the EU.

35. BHRMDA Albena, May 19, 06 DEAN of CBA Business School ZAGREB/ EU Expert Brussels.35 Some good Books… Peter DRUCKER: “Post capitalist society”, Harper Business, New York, 1993. Peter DRUCKER: “Post capitalist society”, Harper Business, New York, 1993. Verna ALLEE: “The future of knowledge” Elsevier Science, 2003, USA. Verna ALLEE: “The future of knowledge” Elsevier Science, 2003, USA. Rob CROSS: “Networks in the Knowledge economy” 2003. Rob CROSS: “Networks in the Knowledge economy” 2003. LEIBOLD and al. : “Strategic Management in the Knwoledge economy” 2002. LEIBOLD and al. : “Strategic Management in the Knwoledge economy” 2002. David ROONEY (Australia): “Handbook on the Knowledge economy” 2005. David ROONEY (Australia): “Handbook on the Knowledge economy” 2005.

36. BHRMDA Albena, May 19, 06 DEAN of CBA Business School ZAGREB/ EU Expert Brussels.36 BOOKS II Jeremy RIFKIN: “The European Dream: when Europe’s vision of the future is silently eclipsing the American dream” Penguin 2004. Jeremy RIFKIN: “The European Dream: when Europe’s vision of the future is silently eclipsing the American dream” Penguin 2004. Ray ANDERSON: “Mid Course correction” 1998. www.chelseagreen.com (Interface) Ray ANDERSON: “Mid Course correction” 1998. www.chelseagreen.com (Interface) www.chelseagreen.com World Business Academy: www.worldbusiness.org World Business Academy: www.worldbusiness.org www.worldbusiness.org “Neskey” on intangible measurements : www.neskey.com “Neskey” on intangible measurements : www.neskey.com www.neskey.com