1. © José M. Viedma Marti, 2001. i C The 3th 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 OICBS Operations Intellectual Capital Benchmarking System

2. © José M. Viedma Marti, 2001. 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

3. © José M. Viedma Marti, 2001. i C

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5. i C Industrial Complex at Castrette (Benetton)

6. © José M. Viedma Marti, 2001. i C Benetton’s Store

7. © José M. Viedma Marti, 2001. i C Zara’s Store

8. © José M. Viedma Marti, 2001. 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

9. © José M. Viedma Marti, 2001. 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.

10. © José M. Viedma Marti, 2001. 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

11. © José M. Viedma Marti, 2001. i C Endowments -Installed base of customers -Brand &image -Network of suppliers -Network of talent -Ownership of standards Skills & Tacit Knowledge -Know-how -Talent -Competencies Collective Values & Norms -e.g. Client focus, Reliability, Quality Technology & Explicit Knowledge -Patents -Manuals -Procedures Processes -Leadership & Control -Communication -Management Information Unique bundle of intangible assets (=core competence) A core competence as a unique bundle of intangible assets (Andriessen, 2001)

12. © José M. Viedma Marti, 2001. 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

13. © José M. Viedma Marti, 2001. 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

14. © José M. Viedma Marti, 2001. i C What to Benchmark ? Business design Key success factors Core Business Core Competencies Intellectual Capital Own Company Best Competitor Fast FoodBocattaMc Donald’s ApplicationLogic Control SAP Software ApplicationLogic Control SAP Software SteelAceraliaNucor Technology SteelAceraliaNucor Technology Package deliverySEURFederal ServicesEspress Package deliverySEURFederal ServicesEspress CasualWearCortefielZARA Retailing CasualWearCortefielZARA Retailing

15. © José M. Viedma Marti, 2001. i C COMPANY A COMPANY B (h) = The OICBS Framework Customer B.U. Objectives Operations infraestructure Professional core competencies (h) Processes (h) Core Competencies Processes Productsand services(h) Products andservices Benchmarking GAP Benchmarking GAP Benchmarking GAP Benchmarking GAP Benchmarking GAP Benchmarking GAP needs homologous B.U. Objectives (h) Core Competencies Professional core competencies (h) Operations Infraestructure (h) B.U.= Business Unit

16. © José M. Viedma Marti, 2001. i C Financial Results Competitive Segment environment Core competencies Professional core ccompetencies Customer needs Products and services Competitive advantages core business activities Competitive advantages outsourcing activities Competitive advantages alliance activities Business Unit Competencies B.U. B.U.= Business Unit

17. © José M. Viedma Marti, 2001. i C BU1.....................BU2......................BU3......................BU n OPERATIONS INFRASTRUCTURE a) Knowledge Management b) Information and telecomunications technology c) Company culture d) Information systems e) Organizational structure f) Human capital management g) Lidership OPERATIONS INFRASTRUCTURE a) Knowledge Management b) Information and telecomunications technology c) Company culture d) Information systems e) Organizational structure f) Human capital management g) Lidership Company operations infrastructure OIC1....................OIC2....................OIC3.....................OIC n Company Operations B.U.= Business Unit OIC=Operations Intellectual Capital

18. © José M. Viedma Marti, 2001. i C The eight factors framework Customer needs Customer needs Business Unit Objetives Business Unit Objetives Products and services Products and services Company core competencies Company core competencies Professional core competencies Company operations infrastructure 5 4 3 2 6 Financial results Financial results 7 1 Processes 8 FACTORS

19. © José M. Viedma Marti, 2001. i C The eight factors framework Customer needs. Customer segment needs that the company expects to cover through the business unit activities. Business Unit Objectives: Business Unit activities lead to products and services through the corresponding processes using company and professional core capabilities and company operations infrastructure. The ultimate objectives of the business unit are the expected financial results through the satisfaction of customer needs. Products and services: Products and services with their attributes, characteristics, functions and embedded knowledge and technologies. Processes: Operations value chain activities that produce current products and services. These activities are made up of core business activities, outsourcing activities and strategic alliances and cooperation agreement activities. Competitive advantages will be generated mainly in the different value chain core business activities. Core competencies are mainly embodied in the core business activities of the value chain. Company core competencies: Essential knowledge or core competencies that make it possible and will give way to competitive advantages, unique processes and competitive products and services within the business unit.

20. © José M. Viedma Marti, 2001. i C The eight factors framework Professional competencies: Professionals, managers and support staff competencies and capabilities that will generate and perfect core competencies. Company operations infrastructure: operations infrastructure (mainly intangible assets) that the company has and that is for the use of the different business units. The company operations infrastructure covers the following issues: a) Knowledge management. b) Information and telecommunications technology. c) Company culture. d) Information systems. e) Organizational structure. f) Human capital management. g) Leadership. Financial results: Expected economic and financial results from the business unit.

21. © José M. Viedma Marti, 2001. i C Specific OICBS framework 1 OICBS framework 2 34 5 6 7 8 Factors Criteria Criteria 1 Criteria 2 Criteria 3.......... Ccmpetence 1 Competence 2 Competence 3.......... Human Capital 2 Structural Capital 2 Relational Capital 3.......... Questionnaires

22. © José M. Viedma Marti, 2001. 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 Value Chain Our company Value Chain Specific framework 8 factors a, b,... Criteria m,n, p... Questionnaires Specific competitiveness factors and criteria which are relevant in a given Business unit activity Core Competencies Benchmarking Our company Best international competitors Core competencies evaluation Key competitiveness drivers

23. © José M. Viedma Marti, 2001. i C

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26. i C Learning from one' s betters to surpass one's own competitive position. Identifying the specific competitiveness factors and criteria which are relevant in a given business activity. Through the competitiveness factors framework, enabling the identification, audit and benchmark of the core competencies or key intellectual capital that are the main sources of sustainable competitive advantages. When using OICBS in an orderly systematic and repetitive way we obtain operations competencies statements and Balance Sheets, that complement and perfect finance balance sheets and lead companies to leveraging intellectual capital. Benefits from using OICBS I

27. © José M. Viedma Marti, 2001. i C Benefits from using OICBS II Selecting in a systematical and organised way the necessary information for evaluating relevant factors, core competencies or key intellectual capital. Identifying the key areas in which in-depth benchmarking can be carried out in the future. Promoting organisational learning through benchmarking teams, assessment teams, communities of practice and strategic teams. Introducing a common language for company managers when dealing with intangible and intellectual assets.

28. © José M. Viedma Marti, 2001. i C Benefits from using OICBS 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 core competencies and intellectual capital management in a systematic and organised way.