Building and Sustaining Intellectual Assets
By Thomas E. Ambler
Formulating strategy in an age of externally caused discontinuities and jolting changes still requires connecting where we are as an organization to where we want to go. Today, more than ever before, this connecting must provide the flexibility to adapt to and exploit change better than our competitors. We must understand our historical competitive advantages and have the capability to sustain and morph them into valuable new forms.
Assuring continuity of key elements of our business is vital for success. For most organizations, the most key element is the intangible we label \"Intellectual Assets.\" These take the form of Competencies and Culture and are largely embodied in our people.
For the sake of clarity and brevity let's focus our attention on \"Strategic Competencies.\" Strategic Competencies are those combinations of skills, processes and knowledge that provide high value to our customers and set us well above our competitors in terms of differentiation and difficulty to copy. Recognition of Strategic Competencies is foundational to the formulation of potent strategy. It strongly influences how we allocate and configure our resources and engage our competition in order to seize opportunities in existing and potential markets. (Books such as Competing for the Future, by Prahalad and Hamel, and Intelligent Enterprise, by Quinn, do an excellent job of presenting the underlying strategic thinking.) Discovery of Strategic Competencies is the obvious and crucial first step for any organization. (A tried-and-true process for doing this is covered well in Chapter 7 of our book, Simplified Strategic Planning, by Robert Bradford and Peter Duncan.) Typically, organizations discover they have no more than three major Strategic Competencies.
Although discovery and strategic thinking related to Strategic Competencies has good coverage, there is one particular area that seems to be covered poorly in both the literature and in practice, and that is how to manage Strategic Competencies properly on an on-going basis beyond the formal strategic planning process. Although attempting to deal with this topic, this article carries a strong disclaimer that it addresses the topic fully. Its primary intent is to scratch the surface just enough to highlight with some credibility an area where there seems to be a big disconnect just begging for some attention.
Most knowledgeable people agree that keeping Strategic Competencies alive, well and growing is vital for future success, but then give scant attention to doing it. The fact that the management of Strategic Competencies must, by necessity, be different for every organization is one major cause of this disconnect. But a bigger reason is that it demands costly investment in two key elements:
- A nitty-gritty, on-going, rigorous analytical process that results in understanding each Strategic Competency at a grassroots intellectual and organizational level. This process must take account of the fact that, as Professor Quinn expresses it, \"...organizational intellect is ephemeral and organic. It can grow old, atrophy in spots, die or even walk away.\" In other words, there must be an element that matches up the intellectual bits and pieces that comprise a competency with the management of the people who need to acquire them, use them and transfer them.
- An organizational point-person (aka Passionate Driver) charged with the role of managing and leading the development and deployment process for one or more Strategic Competencies within an organizational and staffing environment that is constantly in a state of flux.
Element 1 - A Building and Sustaining Process
Let's first address the analytical process. A Strategic Competency is too large a \"chunk of intellectual stuff\" to work with and manage. It needs to be broken down into its low-level building blocks we label \"skills/processes/knowledge\" or \"SPK's\" that we can and should do something with. These are the SPK's that are critical to the operation of the Strategic Competency and are either below par or are at risk of being lost for some reason. Since most SPK's involve people, we also need to identify who owns or should own them. The situation where the current owner is different from the proper owner recognizes that some SPK's everybody should have, others only certain functions need but at multiple levels, while others must exist at certain levels of a function to be usable at all. It also arises from movement of people and changes in organizational structure.
The specific 3-step process that accomplishes these objectives is illustrated below through an example. At the risk of setting myself up for a possible slam from someone not as generous as you, let's assume that \"Expertise at providing articles that benefit users of Strategic Planning\" has been recognized as a Strategic Competency and use it as our example.
Step 1: Identify the Critical SPK's for a given Strategic Competency.
| Skill/Process/Knowledge (Current or Required for the Future) | Future Importance to the Strategic Competency |
| Knowledge of Strategic Planning processes | Critical |
| Understanding the operation of business organizations | Critical |
| ... | |
| Ability to be humorous | Beneficial |
| Ability to write | Critical |
| Graphic Design (desired new skill) | Critical |
| Publication process | Critical |
Step 2: For the Critical SPK's analyze the current performance relative to the future desired level and probability of losing the SPK for whatever reason in the next 3-5 years. This highlights the SPK's that deserve attention.
From Step 1 | |||||
| Skill/Process/Knowledge (Current or Required for the Future) | Future Importance to the Strategic Competency | Performance Gap | Nature of Gap (quantity / quality) | Loss Risk Potential | Nature of Risk |
| Knowledge of Strategic Planning processes | Critical | Low | -- | Low | -- |
| Understanding the operation of business organizations | Critical | Moderate | Personal experience with global operations | Low | -- |
| ---Other SPK's--- | ... | ... | ... | ... | ... |
| ... | ... | ... | ... | ||
| Ability to write | Critical | Low | -- | High | Shortage of time to write |
| Graphic design (desired new skill) | Critical | High | Non-existent | Low | -- |
| Publication process | Critical | Low | -- | High | Internet Technology goes to unfamiliar format |
Step 3: Connect the SPK with people who currently possess or should possess it and then define the Remedy for each SPK with either a Moderate to High Performance Gap or Loss Risk Potential.
From Step 1 and 2 | ||||
| Skill/Process/Knowledge (Current or Required for the Future) | Remedy for Gap/Loss Risk | Current Possessor(s) (Depts. And /or Persons) | Proper Possessor(s) (Depts. And /or Persons) | Transfer Approach (if transfer is the remedy) |
| Knowledge of Strategic Planning processes | ... | All consultants (by name) | Same | -- |
| Understanding the operation of business organizations | Pool knowledge among consultants and attend seminars | All consultants (by name) | Same | Mentor, if new consultant |
| ---Other SPK's--- | ... | ... | ... | ... |
| ... | ... | ... | ... | |
| Ability to write | Add consultants or partially outsource to ghost-writer | All consultants (by name) | All consultants (by name) and outsource writer | Mentor, if new consultant or teach consultants to collaborate with ghost-writer |
| Graphic design (desired new skill) | Hire or ally with a graphic designer | -- | New graphic designer (in-house or outside) | -- |
| Publication process | Webmaster stay on top of technology | Webmaster (by name) | Same | -- |
This tool works for both an existing and a desired future Strategic Competency. Its first-time use would fit well into a multi-departmental Action Plan dealing with \"Managing Strategic Competencies to assure continuity.\" That would simply be the start of an iterative management process that constantly updates the status of the SPK's and drives remediation of problem areas. The result is the continuous improvement of Strategic Competencies to higher and higher levels, even \"best in the world,\" that could transform an organization from \"Good to Great.\"
Element 2 - The Organizational Point-Person
The diagnostic and remedial tool described above is conceptually simple, yet very powerful. However, using it effectively requires the involvement, alignment and cooperation of individuals and managers at potentially every level of every department. This is where the organizational point-person becomes absolutely crucial.
Who should be this organizational point-person who makes sure we sustain, grow and properly deploy our Strategic Competencies? Is it the CEO, the CFO, the HR Officer or perhaps a new position called CCO (Chief Competency Officer)? One could argue that it should be the CFO because he or she is charged with maximizing the organization's market value, of which intellectual assets are typically the #1 contributor. Alternatively, the HR Officer, if one exists, could arguably be an obvious choice because SPK's are largely attributes of human resources and the concern for organizational development, recruiting, training, career paths, etc. that are already in the domain of HR. These would be possible choices, but probably not ideal.
Shall we choose the CEO? The CEO would be ideal because (a) leveraging Strategic Competencies is fundamental to successful leadership of an organization and (b) the \"Passionate Driver\" must have the understanding and time perspective that permit ranging from short-term tactical deployment of Strategic Competencies to long-range strategic positioning. Unfortunately, the typical CEO will not have the time to dedicate to management of Strategic Competencies (one reason they are not managed well today). Therefore, the CEO likely needs to consider creation of a new professional staff function according to the following rudimentary blueprint:
- Responsible directly to the CEO,
- Carries the authority and influence to cut across all organizational boundaries,
- Contributes the Competency perspective in all people decisions (hire, fire, train, transfer, promote),
- Can initiate multi-disciplinary teams and training to foster the synergy that maximizes the use and development of intellectual assets,
- Has a budget,
- Seeks and promotes new opportunities that leverage Strategic Competencies.
This function could involve creation of a new position (perhaps like that of the Chief Technology Officer in large corporations) or the carving out of a major new function for an existing senior manager. In any case, it is a big task for a strong individual possessing high \"Emotional Intelligence.\"
The other major intellectual asset we mentioned earlier is Culture. Although much more \"squishy\" than Strategic Competencies, it could be dealt with in a similar manner.
I have attempted to provide food for thought by means of an approach that I believe is at least part of a solution to the disconnect regarding the management process needed to build and sustain intellectual assets. Hopefully, you have more ideas to add to the mix. I welcome your thoughts about this approach and would also like to hear how your organization has dealt with this issue. Perhaps a creative dialogue can develop. Please feel free to contact me by email at ");
