7 - Aligning Intangible Assets to Enterprise Strategy

Question 1

What are intangible assets?

Answer 1

Knowledge that exists in an organization to create differential advantage or the capabilities of the company’s employees to satisfy customer needs.

Intangible assets include patents, copyrights, workforce knowledge, leadership, information systems, and work processes.

Question 2

List the three components of intangible assets essential for implementing any strategy.

Answer 2

• Human capital
• Information capital
• Organization capital

Question 3

What is the role of alignment in creating value from intangible assets?

Answer 3

Intangible assets take on value only in the context of strategy, helping the organization accomplish its goals.

Question 4

True or False: The same investment in training creates the same returns regardless of the organization’s strategy.

Answer 4

False

Question 5

What is required for the strategic role of intangible assets?

Answer 5

An integrated program to support the enhancement of all the organization’s intangible assets.

Question 6

What are the consequences of functional units operating in isolation?

Answer 6

They compete for resources and often fail to achieve integrated solutions, leading to disappointing results.

Question 7

Fill in the blank: Investments in IT have no value unless complemented with _______.

Answer 7

[HR training and incentive programs]

Question 8

What percentage of organizations reported strong alignment of HR and IT priorities with enterprise strategy?

Answer 8

One-third

Question 9

What were the key objectives identified in the learning and growth perspective?

Answer 9

• Strategic competencies
• Strategic information
• Culture
• Leadership
• Alignment
• Teamwork

Question 10

What company is used as an example for aligning intangible assets with strategy?

Answer 10

Datex-Ohmeda

Question 11

What was Datex-Ohmeda’s new value proposition?

Answer 11

To provide the right solutions for customers based on thoroughly understanding their needs.

Question 12

What are the two types of objectives that describe how value propositions will be created and delivered?

Answer 12

• Customer management objective
• Innovation objective

Question 13

What does the strategy map provide for aligning intangible assets?

Answer 13

A framework for aligning human, information, and organization capital to the strategy.

Question 14

True or False: The strategy map creates alignment and integration by providing a common point of reference for the enterprise strategy.

Answer 14

True

Question 15

What are the three alignment techniques mentioned?

Answer 15

• Strategic job families
• Strategic IT portfolio
• Organization change agenda

Question 16

What is one of the strategic themes defined by Consumer Bank?

Answer 16

Cross-sell the Product Line

Question 17

What competencies were identified as fundamental to the financial planner job at Consumer Bank?

Answer 17

• Solution selling skills
• Relationship management
• Product line knowledge
• Professional certification

Question 18

What are the three priorities for organization capital established by Consumer Bank?

Answer 18

• A culture based on partnerships with customers
• Alignment of employees’ personal objectives to the strategy
• Improved teamwork to promote best-practice sharing

Question 19

What do the seven strategic themes at Consumer Bank describe?

Answer 19

How the strategy will be implemented and the building blocks for the strategy.

Question 20

Fill in the blank: The strategy map helps align human, information, and organization capital to the _______.

Answer 20

[strategy]

Question 21

What are the seven strategic themes mentioned in the context of the bank’s strategy?

Answer 21

The seven strategic themes are:
* New customer base creation
* New products launch
* Solutions-selling interface installation
* Improved quality perfection
* Diverse workforce development
* Integrated approach to strategy
* Responsibility and accountability organization

Question 22

What is the main goal of the cross-selling theme?

Answer 22

The main goal of the cross-selling theme is to increase customer confidence in the bank’s financial advice, leading to increased share of customer business.

Question 23

What are the intangible assets that the cross-selling process depends on?

Answer 23

The cross-selling process depends on:
* Strategic skills
* Information
* Alignment

Question 24

How should the economic justification of strategic investments be performed?

Answer 24

Economic justification should be evaluated from the entire portfolio of investments in intangible assets, rather than on a stand-alone basis.

Question 25

What is strategic readiness?

Answer 25

Strategic readiness describes the status of intangible assets to support the organization’s strategy, analogous to liquidity.

Question 26

What does the measurement of intangible assets not depend on?

Answer 26

The measurement of intangible assets should not depend on how much money was spent to develop them or independent appraisals of their capabilities.

Question 27

What is the purpose of the strategy map framework?

Answer 27

The strategy map framework enables representation of human, information, and organization capital as assets that can be converted into cash through increased sales and lower spending.

Question 28

What are the three categories of intangible assets outlined?

Answer 28

The three categories of intangible assets are: * Human capital * Information capital * Organization capital

Question 29

What does the readiness of the human capital intangible asset indicate?

Answer 29

The readiness of the human capital intangible asset is necessary but not sufficient for strategic success.

Question 30

Fill in the blank: The Consumer Bank needed to measure the readiness of its existing staff of financial planners for the internal process 'Cross-sell the Product Line' by determining _______.

Answer 30

[the proficiency level of financial planners]

Question 31

What is the significance of the Strategic Readiness Report?

Answer 31

The Strategic Readiness Report consolidates essential elements of managing intangible assets: define the asset, align it to the strategy, measure the degree of readiness.

Question 32

What was the initial strategy of Crown Castle International?

Answer 32

The initial strategy was an intensified 'land grab' by acquiring strategically located towers for lease and offering outsourced services.

Question 33

What new strategy did Crown Castle roll out in June 2001?

Answer 33

Crown Castle rolled out a new strategy of operational excellence along with its Balanced Scorecard initiative.

Question 34

What are the two objectives Crown Castle aimed to achieve in its financial perspective?

Answer 34

The two objectives are: * Increase recurring revenue from leases * Increase installation margin for higher-margin revenue

Question 35

What types of customers does Crown Castle have?

Answer 35

Crown Castle has two types of customers: * Wireless operators * Broadcasters

Question 36

True or False: Crown Castle identified speed to market as a key customer value proposition.

Answer 36

True

Question 37

What is the operational excellence strategy's rationale according to Crown Castle?

Answer 37

The rationale is that by knowing their assets better and making better process improvements, they can better serve their customers.

Question 38

What does the cascading model for measuring intangible assets resemble?

Answer 38

It resembles the balance sheet used for measuring tangible and financial assets.

Question 39

What does level 1 in the measurement of intangible assets provide?

Answer 39

Level 1 provides aggregate information on three categories: human capital, information capital, and organization capital.

Question 40

What does the readiness of the organization’s human resources assets depend on?

Answer 40

It depends on the capabilities of specific individuals compared to category requirements.

Question 41

What is the crux of Crown Castle's operational excellence strategy?

Answer 41

To better serve customers through customer partnership and increased understanding of assets. ## Footnote This strategy focuses on maximizing tower performance by leveraging better data about towers.

Question 42

What is the significance of having more and better data about towers?

Answer 42

It allows the company to serve customers better and maximize tower performance. ## Footnote Data includes available space, engineering specifications, and customer usage.

Question 43

What change was made to objectives within the operational excellence perspective?

Answer 43

Objectives were modified from high-level statements to more actionable objectives. ## Footnote For example, resolving NOTAMS in a timely way.

Question 44

How did the strategy map become more useful to district managers?

Answer 44

By heightening specificity in measuring selected processes. ## Footnote This standardization helped streamline operational procedures.

Question 45

What objective was clarified to address customers' main concern?

Answer 45

Accelerate application to rent/commence cycle-time. ## Footnote This objective aimed to amaze customers in each interaction.

Question 46

What was the goal of the Learning and Growth Perspective at Crown Castle?

Answer 46

To create a superior working environment for employees. ## Footnote This included improving global knowledge management.

Question 47

What significant step did Crown Castle take in 2003 regarding knowledge management?

Answer 47

Launched a knowledge management system to serve as a repository of best practices. ## Footnote This system included video clips and documentation for key processes.

Question 48

What shift in focus occurred regarding information systems and services?

Answer 48

Equal weight was given to service and solution aspects alongside the latest e-business systems. ## Footnote This was part of supporting the learning and growth perspective.

Question 49

What was the impact of Crown Castle's Scorecard and strategy map?

Answer 49

Helped the company thrive even as competitors declared bankruptcy. ## Footnote This was due to aggressive management of expenses and capital.

Question 50

What financial improvement did Crown Castle experience?

Answer 50

Cash flow improved from negative to positive, representing gains of several hundred million dollars. ## Footnote This enabled the company to undertake major initiatives confidently.

Question 51

What major initiatives did Crown Castle undertake as a result of financial gains?

Answer 51

Fulfilling the U.K. government's mandate for digital television and establishing Freeview. ## Footnote Freeview provided free digital television with thirty new channels in the U.K.

Question 52

What recognition did Crown Castle achieve for its balanced scorecard approach?

Answer 52

Crown Castle is a member of the Balanced Scorecard Hall of Fame. ## Footnote This recognition highlights the effectiveness of their strategic management practices.