Intellectual Capital

Together with physical and financial capital, intellectual capital is one of the three vital resources of organizations. Intellectual capital includes all non-tangible resources that are attributed to an organization, and contribute to the delivery of the organization’s value proposition. Intangible resources can be split into three components: human capital, structural capital, and relational capital.


    STEPS:


Strategic Measurement

Key Performance Questions (KPQs) ask managers exactly what they want to know about the various intellectual capital value drivers.

KPQs are asked to ensure that indicators are useful and meaningful.They make sure that we are clear about what it is we want to know. Also, by first designing KPQs we are able to ask ourselves: ‘What indicators will best help us answer our key performance questions?’

 An example of how powerful KPQs can be in managing strategic performance comes from Google – one of today’s most successful and most admired companies. Google CEO Eric Schmidt says: “We run the company by questions,not by answers.So in the strategy process we’ve so far formulated 30 questions that we have to answer […] You ask it as a question,rather than a pithy answer, and that stimulates conversation.

Out of the conversation comes innovation.

Innovation is not something that I just wake up one day and say ‘I want to innovate.’ I think you get a better innovative culture if you ask it as a question.”

Any student of science learns that it is important to know what you are looking for before you start collecting any data. If we start collecting data without knowing what we are looking for, we often collect the wrong or unnecessary data, and develop few or no insights about the really important questions we need answers to. In our desire to find measures and get our hands on the data, we often fail to clarify what it is we really want to know.

For example, after deciding that the relationship with our partners is important and that we ought to measure it, we need to pause to clarify what it is we want to understand. Here is where KPQs come in – defining the question or questions we want answered forces us to more specifically spell out just what it is we want to know. Once we have the question, we then have to ask ourselves: what information will answer this question and what is the best way of collecting it?