7 - Aligning Intangible Assets to Enterprise Strategy Flashcards
What are intangible assets?
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.
List the three components of intangible assets essential for implementing any strategy.
- Human capital
- Information capital
- Organization capital
What is the role of alignment in creating value from intangible assets?
Intangible assets take on value only in the context of strategy, helping the organization accomplish its goals.
True or False: The same investment in training creates the same returns regardless of the organization’s strategy.
False
What is required for the strategic role of intangible assets?
An integrated program to support the enhancement of all the organization’s intangible assets.
What are the consequences of functional units operating in isolation?
They compete for resources and often fail to achieve integrated solutions, leading to disappointing results.
Fill in the blank: Investments in IT have no value unless complemented with _______.
[HR training and incentive programs]
What percentage of organizations reported strong alignment of HR and IT priorities with enterprise strategy?
One-third
What were the key objectives identified in the learning and growth perspective?
- Strategic competencies
- Strategic information
- Culture
- Leadership
- Alignment
- Teamwork
What company is used as an example for aligning intangible assets with strategy?
Datex-Ohmeda
What was Datex-Ohmeda’s new value proposition?
To provide the right solutions for customers based on thoroughly understanding their needs.
What are the two types of objectives that describe how value propositions will be created and delivered?
- Customer management objective
- Innovation objective
What does the strategy map provide for aligning intangible assets?
A framework for aligning human, information, and organization capital to the strategy.
True or False: The strategy map creates alignment and integration by providing a common point of reference for the enterprise strategy.
True
What are the three alignment techniques mentioned?
- Strategic job families
- Strategic IT portfolio
- Organization change agenda
What is one of the strategic themes defined by Consumer Bank?
Cross-sell the Product Line
What competencies were identified as fundamental to the financial planner job at Consumer Bank?
- Solution selling skills
- Relationship management
- Product line knowledge
- Professional certification
What are the three priorities for organization capital established by Consumer Bank?
- A culture based on partnerships with customers
- Alignment of employees’ personal objectives to the strategy
- Improved teamwork to promote best-practice sharing
What do the seven strategic themes at Consumer Bank describe?
How the strategy will be implemented and the building blocks for the strategy.
Fill in the blank: The strategy map helps align human, information, and organization capital to the _______.
[strategy]
What are the seven strategic themes mentioned in the context of the bank’s strategy?
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
What is the main goal of the cross-selling theme?
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.
What are the intangible assets that the cross-selling process depends on?
The cross-selling process depends on:
* Strategic skills
* Information
* Alignment
How should the economic justification of strategic investments be performed?
Economic justification should be evaluated from the entire portfolio of investments in intangible assets, rather than on a stand-alone basis.
What is strategic readiness?
Strategic readiness describes the status of intangible assets to support the organization’s strategy, analogous to liquidity.
What does the measurement of intangible assets not depend on?
The measurement of intangible assets should not depend on how much money was spent to develop them or independent appraisals of their capabilities.
What is the purpose of the strategy map framework?
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.
What are the three categories of intangible assets outlined?
The three categories of intangible assets are:
* Human capital
* Information capital
* Organization capital
What does the readiness of the human capital intangible asset indicate?
The readiness of the human capital intangible asset is necessary but not sufficient for strategic success.
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 _______.
[the proficiency level of financial planners]
What is the significance of the Strategic Readiness Report?
The Strategic Readiness Report consolidates essential elements of managing intangible assets: define the asset, align it to the strategy, measure the degree of readiness.
What was the initial strategy of Crown Castle International?
The initial strategy was an intensified ‘land grab’ by acquiring strategically located towers for lease and offering outsourced services.
What new strategy did Crown Castle roll out in June 2001?
Crown Castle rolled out a new strategy of operational excellence along with its Balanced Scorecard initiative.
What are the two objectives Crown Castle aimed to achieve in its financial perspective?
The two objectives are:
* Increase recurring revenue from leases
* Increase installation margin for higher-margin revenue
What types of customers does Crown Castle have?
Crown Castle has two types of customers:
* Wireless operators
* Broadcasters
True or False: Crown Castle identified speed to market as a key customer value proposition.
True
What is the operational excellence strategy’s rationale according to Crown Castle?
The rationale is that by knowing their assets better and making better process improvements, they can better serve their customers.
What does the cascading model for measuring intangible assets resemble?
It resembles the balance sheet used for measuring tangible and financial assets.
What does level 1 in the measurement of intangible assets provide?
Level 1 provides aggregate information on three categories: human capital, information capital, and organization capital.
What does the readiness of the organization’s human resources assets depend on?
It depends on the capabilities of specific individuals compared to category requirements.
What is the crux of Crown Castle’s operational excellence strategy?
To better serve customers through customer partnership and increased understanding of assets.
This strategy focuses on maximizing tower performance by leveraging better data about towers.
What is the significance of having more and better data about towers?
It allows the company to serve customers better and maximize tower performance.
Data includes available space, engineering specifications, and customer usage.
What change was made to objectives within the operational excellence perspective?
Objectives were modified from high-level statements to more actionable objectives.
For example, resolving NOTAMS in a timely way.
How did the strategy map become more useful to district managers?
By heightening specificity in measuring selected processes.
This standardization helped streamline operational procedures.
What objective was clarified to address customers’ main concern?
Accelerate application to rent/commence cycle-time.
This objective aimed to amaze customers in each interaction.
What was the goal of the Learning and Growth Perspective at Crown Castle?
To create a superior working environment for employees.
This included improving global knowledge management.
What significant step did Crown Castle take in 2003 regarding knowledge management?
Launched a knowledge management system to serve as a repository of best practices.
This system included video clips and documentation for key processes.
What shift in focus occurred regarding information systems and services?
Equal weight was given to service and solution aspects alongside the latest e-business systems.
This was part of supporting the learning and growth perspective.
What was the impact of Crown Castle’s Scorecard and strategy map?
Helped the company thrive even as competitors declared bankruptcy.
This was due to aggressive management of expenses and capital.
What financial improvement did Crown Castle experience?
Cash flow improved from negative to positive, representing gains of several hundred million dollars.
This enabled the company to undertake major initiatives confidently.
What major initiatives did Crown Castle undertake as a result of financial gains?
Fulfilling the U.K. government’s mandate for digital television and establishing Freeview.
Freeview provided free digital television with thirty new channels in the U.K.
What recognition did Crown Castle achieve for its balanced scorecard approach?
Crown Castle is a member of the Balanced Scorecard Hall of Fame.
This recognition highlights the effectiveness of their strategic management practices.
