Methodology  


1. Theoretical Foundations
2. ICBS Tools
         - Extended Swot Analysis
         - Value Chain Analysis

3. OICBS
4. IICBS
5. Making ICBS work
6. ICBS results

 

 Theoretical Foundations
 
 

In a developed market economy, a key common ingredient in all business success stories has been the presence of a soundly formulated and effectively implemented strategy. In the new "knowledge economy", an effective strategy remains paramount. A firm’s success is always the result of both well-formulated and well-implemented strategies (Grant, 1998).

In this new era, the formulation and implementation of strategy follows different guidelines and criteria. This is best summed-up by saying that strategy in the new era is all about an approach based on resources and capabilities. These vital capabilities are the result of unique combinations of resources (both tangible and intangible) that the company develops when applying their activities and processes to the task at hand. Among these various capabilities, core capabilities are the most relevant, because they represent the main source of sustainable competitive advantage. In our view, these "core capabilities" (or "core competencies") can be equated with the "intellectual capital" of an organization and, in the turbulent and dynamic environments of today companies therefore effectively compete on the basis of their intellectual capital or their core capabilities in seeking to attain a sustainable competitive advantage. We illustrate how competitive strategies work in the dynamic environments of the modern era.

   
 

However, when describing how organizations create and leverage competitive advantage, we note that it depends upon what the firm has, but no less important is what the firm does with what it has. In strategy management, two relevant perspectives still coexist in understanding how firms deploy scarce resources to create superior value. These two perspectives are activity-based view and the resource-based view. The two are complementary. The activity-based view focuses on what the firm does, whereas the resource-based view focuses on what the firm has. These two perspectives constitute the foundations of the ICBS methodologies.

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 ICBS Tools

ICBS uses various tools, from which the most relevant are: The Extended Swot Analysisand Value Chain Analysis

The Extended Swot Analysis

The extended SWOT analysis gives us the main factors to consider when seeking strategies that lead to entrepreneurial excellence. The main factors of the extended SWOT analysis also determine the information system required to measure and manage those factors. In other words, the main factors produce the Intellectual Capital Benchmarking System (ICBS) that we have defined as a knowledge-based strategic management information system framework. The challenge is to move SWOT analysis away from generalities of “strengths”, “weaknesses”, opportunities”, and “threats” to more concrete factors and characteristics appropriate to the new realities. To accomplish unpredictable characteristics emerged from an economy based on a fluid resource as knowledge it is proposed the extended SWOT analysis which constitutes the basis for developing the ICBS framework. The Extended SWOT analysis helps us to identify the strategic knowledge.

Extended SWOT analysis

Value Chain Analysis

ICBS considers the business process value chain broken down into:   

ü  Innovation value chain

ü  Operations value chain

The "innovation value chain" considers the process of developing new products and services (and the new processes for providing them) that subsequently feed the operations process. Many companies and organisations now base their competitiveness on their innovation capabilities. In doing so, they are effectively basing their competitiveness on what might be termed their "innovation intellectual capital".

The “operations value chain” considers the process of operations producing "ordinary" products and services through a systematic and repetitive operations value chain which also requires core competencies and core capabilities to be competitive. However, these competencies and capabilities are usually of a different nature from those of the innovation process. The core competencies and core capabilities of operations can also be termed "operations intellectual capital".              

Thus, the ICBS considers the business process value chain broken down into its two constituent parts. The general model of ICBS considers the innovation process value chain and the operations process value chain, providing specific methodologies and information systems for each of the constituent parts

Business process broken down into its two constituent value chains: The innovation value chain and the operations value chain

Thus, considering the particularities of each business process, the ICBS methodologies and frameworks can be divided into two partial models. The OICBS refers to operations core activities and core knowledge and the IICBS refers to innovation core activities and knowledge.

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OICBS: Operations Intellectual Capital Benchmarking System

The OICBS is an operation intellectual capital strategic management methodology.

The OICBS methodology draws inspiration from the idea of the company as a tree in which the visible parts of the tree (the trunk, the branches, the leaves, and the fruits) correspond to the tangible assets of the company and the invisible part of the tree (the roots of the tree below ground) corresponds to the intangible assets of the company.

The OICBS flowcharts show that, within each company tree (or business unit), separate analyses can be made, in succession, of the leaves and fruits (the products and services), the branches (the processes), and the roots (the core competencies and professional core competencies). For this purpose, ad hoc personalised questionnaires are used.

In addition, the overall soil fertility (the operations infrastructure) can be analysed. Continuing with the idea of a company as a tree, each company business unit can be considered to be a specific tree, and the whole company has as many trees as it has business units. Each of these trees is fed with the knowledge of its roots. Furthermore, a company has at its disposal a common intangible operations infrastructure that is shared by all its business units. This infrastructure corresponds to the fertile soil in which all the company trees are planted. This fertile soil nourishes the roots (core knowledge) of each individual company tree

Company Operations Infrastructure

This methodology makes it possible to compare each specific tree (business unit) with the corresponding tree of the best of the competition, thus facilitating the benchmarking of leaves and fruits (products and services), branches (processes), roots (core competencies and professional core competencies), and soil fertility (operations infrastructure).The benchmarking gap gives the necessary information for taking appropriate corrective action and for learning from past errors.

Benchmarking gaps in OICBS

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IICBS: Innovation Intellectual Capital Benchmarking System

(An Innovation Intellectual Capital Strategic Management Methodology)

The idea of a company as a tree is also useful in assessing innovation activities. The visible parts of the tree (the trunk, the branches, the leaves, and the fruits) correspond to the tangible innovation assets of the company. The invisible part of the tree (the roots below ground) corresponds to the intangible innovation assets of the company. Flowcharts show that, within each new tree (or innovation project), separate analyses can be made, in succession, of the leaves and fruits (the new products and services), the branches (the new processes), and the roots (the new core competencies and new professional core competencies). For this purpose, ad hoc personalised questionnaires can be used. In addition, the overall soil fertility (the innovation infrastructure) can be analysed.

                                                               IICBS                                                                         Company Innovation Insfrastructure

Continuing with the idea of the new tree, each innovation project can be considered to be a specific tree, and the whole company has as many trees as it has innovation projects. Each of these trees is fed with the knowledge of its roots. Furthermore a company has at its disposal a common intangible innovation infrastructure that is shared by all the innovation projects. This infrastructure corresponds to the fertile soil in which all the company innovation trees are planted. This fertile soil nourishes the roots (core knowledge) of each innovation company tree.

This methodology makes it possible to compare each specific tree (innovation project) with the corresponding tree of the best of the competition, thus facilitating the benchmarking of leaves and fruits (new products and services), branches (new processes), roots (new core competencies and new professional core competencies), and soil fertility (innovation infrastructure). The benchmarking process in IICBS is shown below.

Confronted with increasing global competition, organizations can no longer survive on their own innovation efforts. To pursue innovation in a global competitive environment organizations do not have to rely on internal competencies alone. Innovation activities are increasingly international and companies can and should use external ideas as well as internal ideas. IICBS identifies, audits, and benchmarks the core capabilities or key intellectual capital that the company needs to develop and to reach its future goals and successfully compete with “best in class” competitors.

The benchmarking gap gives the necessary information for taking appropriate corrective action and for learning from past errors.

 

Benchmarking gaps in IICBS

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Making ICBS work
 
     
 

ICBS implementation is carried out through different workshops that usually coincide with the different steps of the ICBS structure but, in practice, workshops have to be organised considering the specific requirements of each particular business model.

 
 

Step 1: Company General Description

Preliminary questionnaires have to be filled up to collect the company’s data.

  • General Description (brief company’s history)

  • Company’s activities and business units

  • Objectives and global strategy 

  • Balance Sheets Profit and Loss Accounts Team works

  • Evaluations teams allocation

  • Sources of information

 

Step 2: Parameters’ Identification for Customization

Once obtained the preliminary questionnaires, the second phase is to customize the evaluation. Parameters’ identification will help to customize final questionnaires (to adapt final questionnaires to the company’s characteristics).

  • Identification of competitors

  • Business Units of the company

  • Competitive gap

  • Products/services to be benchmarked

  • Products/services attributes or functions

  • Value chain 

  • Team work groups and sources of information

Step 3: Customized Questionnaires

Based on information collected in the previous phases, the system generates customized questionnaires to be filled up by top management, including:

  • Products evaluation

  • Core business competitive advantages

  • Outsourcing competitive advantages

  • Alliances and cooperation agreements competitive advantages

  • Core competencies analysis

  • Personal Competencies

  • Environment evaluation

 Step 4: Evaluation of Customized Questionnaires

Once filledin,information collected through questionnaires will be processed in the computer.

 Step 5: Evaluation Results:p>

Final results comprise the following information:

1)      Summary Results

  • Competencies benchmarking

  • Key success factors

  • Intellectual Capital Balance Sheet

  • Precision Indexes

 2)      Detail Results

  • Products evaluation

  • Evaluation of value chain core business activities

  • Evaluation of value chain outsourcing activities

  • Evaluation of alliances and cooperation agreements

  • Outsourcing level

  • Evaluation of competitive environment

 3)   Core Competencies Results

  • Core and personal competencies (summary)

  • Core and personal competencies (detail)

 
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  ICBS Results  
     
  View ICBS results here (pdf/1,7 MB)  
     
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