© José M. Viedma Marti, i C The 4th World Congress on Intellectual Capital José María Viedma Marti Professor of Business Administration at the Polytechnic University of Catalonia and President of Intellectual Capital Management Systems IICBS Innovation Intellectual Capital Benchmarking System

© José M. Viedma Marti, i C Any business sector Excellent competitor Own company ? Multinationals accelerate the process BIG COMPETITION COMPETITIVE “GAP” Interlinked economy Global markets World = Global village Telecomunications Transportation Strategic alliances Strategic networks Franchise Cooperation agreements Global Marketplace

© José M. Viedma Marti, i C La Sagrada Familia

© José M. Viedma Marti, i C Reality was recognizable

© José M. Viedma Marti, i C Harder to recognize

© José M. Viedma Marti, i C You could still tell what was going on

© José M. Viedma Marti, i C Impossible to see what was going on

© José M. Viedma Marti, i C Sources of excellence or sustainable competitive advantage Most meaningful paradigms ManagementStrategic Management Virtual corporation · Resource based view Virtual corporation · Resource based view Networking organisation Networking organisation Intelligent enterprise Intelligent enterprise Knowledge creating company Knowledge creating company Learning organisation Learning organisation Horizontal organisation Horizontal organisation Centerless corporation Centerless corporation Innovative organisation Innovative organisation Conclusion: Knowledge and intellectual capital are the only sources of sustainable competitive advantages

© José M. Viedma Marti, i C Strategy formulation: Shifting from an industry focus to a resource focus The Firm Goals and Values Goals and Values Resources and Capabilities Resources and Capabilities Structure and Systems Structure and Systems Goals and Values Goals and Values Resources and Capabilities Resources and Capabilities Structure and Systems Structure and Systems Competitors Competitors Customers Customers Suppliers Suppliers Competitors Competitors Customers Customers Suppliers Suppliers The Industry Environment StrategyStrategy The Firm-Strategy Interface The Strategy-Environment Interface Source: Robert M. Grant 1998.

© José M. Viedma Marti, i C Based on Robert M. Grant 1998 Strategy Key success factors Best in class competitors Core capabilities Competitive advantage Resources Tangible Intangible Physical FinancialHuman Structural Relational The relationships among resources, capabilities and competitive advantage Core capabilities = Core competencies = Intellectual capital

© José M. Viedma Marti, i C TANGIBLE RESOURCES Process A Company Value Creation Tree Process C Product A Service B Service C COMPETENCIES KNOWLEDGE HUMAN CAPITAL INTANGIBLE RESOURCES STRUCTURAL CAPITAL RELATIONAL CAPITAL INTELLECTUAL CAPITAL PRESENT (Value Extraction) Process A Service A’ Product A” Process B Product B’ Process C Product C’ Service C” CAPABILITIES KNOWLEDGE Process B i C © Intellectual Capital Management Systems

© José M. Viedma Marti, i C Company Value Creation Tree TANGIBLE RESOURCES Process A Process B Process C Service A Service B Service C COMPETENCIES CAPABILITIES KNOWLEDGE HUMAN CAPITAL INTANGIBLE RESOURCES STRUCTURAL CAPITAL RELATIONAL CAPITAL INTELLECTUAL CAPITAL PRESENT (Value Extraction) Process A Service A’ Service A” Proce ss B Service B’ Service B” Process C Service C’ Service C” FUTURE (Innovation) NEW COMPETENCIES NEW CAPABILITIES KNOWLEDGENEW KNOWLEDGE NEW KNOWLEDGE NEW KNOWLEDGE HUMAN CAPITAL NEW INTANGIBLE RESOURCES STRUCTURAL CAPITAL RELATIONAL CAPITAL NEW INTELLECTUAL CAPITAL New Process New Product M New Process New Product M’ New Product M” TANGIBLE RESOURCES i C © Intellectual Capital Management Systems

© José M. Viedma Marti, i C Business Process Value Chain Customer Need Satisfied Customer Need Satisfied Customer need Identified Customer need Identified Innovation Value Chain Innovative Products and Services Current Products and Services Operations Value Chain PROJECTS CURRENT PROCESS

© José M. Viedma Marti, i C What to Benchmark ? New Business designs Innovation core capabilities Innovation Intellectual Capital Own Company Best Competitor Fast FoodBocattaMc Donald’s ApplicationLogic Control SAP Software ApplicationLogic Control SAP Software TelecommunicationsEricssonNokia Technology TelecommunicationsEricssonNokia Technology PharmaceuticalAlmirallMerck Services PharmaceuticalAlmirallMerck Services CasualWearCortefielZARA Retailing CasualWearCortefielZARA Retailing

© José M. Viedma Marti, i C COMPANY A COMPANY B (h) = The IICBS Framework Customer Emerging Benchmarking Project Objetives Project 1 Objectives COMPANY B innovation infraestructure COMPANY A innovation infraestructure NewProfessional corecapabilities (h) NewProfessional corecapabilities Newcompany corecapabilities (h) New Processes (h) Newcompany corecapabilities New Processes NewProducts andservices (h) NewProducts andservices Project (h) Objectives Benchmarking GAP Benchmarking GAP Benchmarking GAP Benchmarking GAP Benchmarking GAP Benchmarking GAP needs homologous

© José M. Viedma Marti, i C Financial Results Competitive Segment environment New core capabilities New professional core capabilities Emerging customer needs New products and services Competitive advantages core business activities Competitive advantages outsourcing activities Competitive advantages alliance activities Project capabilities Project Value Chain

© José M. Viedma Marti, i C Project 1Project 2Project 3Project...n R+D INFRASTRUCTURE a) Innovation and strategy b) Technology standard c) R+D integration d) R+D organization e) Innovation resource allocation f) Technology information systems g) Technology Managements systems R+D INFRASTRUCTURE a) Innovation and strategy b) Technology standard c) R+D integration d) R+D organization e) Innovation resource allocation f) Technology information systems g) Technology Managements systems Common R+D infrastructure

© José M. Viedma Marti, i C The eight factors framework Emerging needs Emerging needs Project Objetives Project Objetives New Products and services New Products and services New core capabilities New professional core capabilities Company innovation infrastructure Financial results Financial results 7 1 New processes 8 FACTORS

© José M. Viedma Marti, i C The eight factors framework Emerging needs. Potential or emerging customer segment needs that the company expects to cover through the project. Project objectives. The project is the innovation business unit that leads to new products and services through new processes using company and professional core capabilities and company innovation infrastructure. The ultimate objectives of the projects are the expected financial results. New products and services. New products and services with their attributes and characteristics and functions. New processes. Primary and support value chain activities that produce the project’s new products and services. These activities are made up of core project activities, outsourcing activities and strategic alliances and cooperation agreement activities. Competitive advantages will be generated mainly in the different value chain core project activities. New company core capabilities. Essential knowledge or core capabilities that will make it possible and will give way to competitive advantages, new processes and new products and services within the project.

© José M. Viedma Marti, i C The eight factors framework New professional core capabilities. Professionals, managers and support staff capabilities that will generate and perfect core capabilities and core competencies. Company innovation infrastructure. Research and development infrastructure (tangible and intangible assets) that the company has and that is for the use of the different projects. The company innovation infrastructure covers the following issues: Is technology innovation part of the business strategy? What is the company’s knowledge and technology standard? Is the R+D department working together with the other main departments? How well organised is the R+D department? How many resources are allocated to the innovation function? Are there any technologies informations systems? How are they performing? How are they performing the technology management systems? Financial results. Expected economic and financial results from the project

© José M. Viedma Marti, i C Specific IICBS framework 1 IICBS framework Factors Criteria Criteria 1 Criteria 2 Criteria Capability 1 Capability 2 Capability Human Capital 2 Structural Capital 2 Relational Capital Questionnaires

© José M. Viedma Marti, i C From general framework to specific framework General ContextSpecific Context The general framework 8 factors xx Criteria xxx Questionnaires The 8 Factors Framework Competitive Benchmarking Best Competitors project Value Chain Our company project Value Chain Specific framework 8 factors a, b,... Criteria m,n, p... Questionnaires Specific competitiveness factors and criteria which are relevant in a given project activity Core Capabilities Benchmarking Our company Best international competitors Core capabilities evaluation Key competitiveness drivers

© José M. Viedma Marti, i C

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i C Learning from the best competitors that surpass one’s own competitive innovation capabilities Identifying the specific innovation capabilities factors and criteria which are relevant in a given business activity. Through the IICBS factors framework, enabling the identification, audit and benchmark of the innovation core capabilities or innovation intellectual capital that are the main sources of long term sustainable competitive advantages. When using IICBS in an orderly systematic and repetitive way we obtain innovation capabilities balance sheets, that are future oriented and complement and perfect finance balance sheets leading companies to leveraging innovation intellectual capital. Benefits from using IICBS I

© José M. Viedma Marti, i C Benefits from using IICBS II Selecting in a systematical and organised way the necessary information for evaluating relevant factors, core innovation capabilities and innovation intellectual capital. Identifying the key areas in which in-depth benchmarking can be carried out in the future. Promoting organisation learning through benchmarking teams, assessment teams, project teams and strategic teams. Introducing a common language for company managers when dealing with intangible and intellectual assets.

© José M. Viedma Marti, i C Benefits from using IICBS III Measuring the reliability concerning the relevant information and the progress of acquiring this information. Facilitating the work of the benchmarking and competitive intelligence teams. Facilitating the work of the knowledge and intellectual capital managers. Giving to the SME’s managers access to innovation capabilities and innovation intellectual capital management in a systematic and organised way