IC.Valuation&Balanced Scorecard

IC Valuation & Balanced Scorecard
Based on the motivation to identify and measure the intangible competitive advantages of companies that ultimately drive economic growth, there have been many practical attempts to rate and measure Intellectual Capital (IC) that resides in companies and organization. The main ones being:

  • Danish Guidelines (Jan Mouritzen, Denmark)
  • IC Rating™ – Skandia Navigator (Leif Edvinsson, Sweden)
  • Intangible Asset Monitor (Karl-Erik Sveiby, Australia/Sweden)
  • Balanced Scorecard (Robert Kaplan & David Norton, USA)
  • Citation-Weighted Patents (Nick Bontis, USA).

Broadly speaking IC Valuation is a quantitative management method that attempts to turn intangible IA (Intellectual Assets) and how well a company is doing with its ICM processes (Intellectual Capital Management) into quantifiable number.
From the perspective of companies and organizations in Hong Kong, a more practical way to implement IC Valuation is to extend existing enterprise-wide Balanced Scorecard models to include an “IC Valuation” perspective (i.e. in addition to the “Financial”, “Learning”, “Customer” & “Process” perspectives). This approach has the advantages of:

  • firstly, Balanced Scorecard is already a widely known generic management method in Hong Kong;
  • secondly, no additional royalty payment will be involved in using the Balanced Scorecard method (except for costs involving implementation consultancy and software support if necessary)
  • thirdly, there are many generic Balanced Scorecard software products in the market (including an offer from Microsoft) to support BSC implementations.

Please also see “Balanced Scorecard” under “Glossary” and the Extended Balanced Scorecard whitepaper titled “Australian Guiding Principles on Extended Performance Management” published by the Society for Knowledge Economics of Australia http://www.ske.org.au/ .