Balanced Scorecard in the emotional economy

1. Balanced Scorecard in the emotional economy Egil Sandvik & Bastian Lie-Nielsen Partners Knowledge Management Group DA

2. + . . +++ ++ BusinessIQ -making business of knowledge

3. BusinessIQ -making business of knowledge

4. The story we are telling

5. The People First Model for Value Creation Bottomline Value Creation ”Fly wheel” ”Tipping point” Engaged Employees Engaged Customers Strategy & Culture ”People first” The Leader The Role Talents

6. Maslow’s Hierarchy of Needs in the emotional economy Traditional Present Self Realization Recognition Social Needs Security Physical Needs

7. Theoretical foundation Concepts and strategy Sveiby, Karl-Erik Hamel, Gary Prahalad, C.K. Empirical research Pfeffer, Jeffrey Collins, Jim Lev, Baruch Gladwell, Malcolm The Gallup Organization (Buckingham & Coffman) Investors in People Perspectives ”People first- perspective on Knowledge Management” ”Tipping Point” ”Fly Wheel Effect”

8. BusinessIQ • Dynamic • Interactive • Emerging • Simple • Focus on developing skills and capacities to act

9. HCI Conceptual framework BusinessIQ HCI = Human Capital Index SCI = Human Capital Index CCI = Customer Capital Index ICI = Identity Capital Index FCI = Financial Capital Index ”People first” + ICI FCI SCI Flywheel . . +++ ++ CCI

10. HCI Organizational learning Operations/goal of team/organization Developement (Coaching) Feedback (webbased) Interpretation (Workshop)

11. FCI ICI CCI SCI HCI BIQ 160 140 120 100 80 60 40 20 0 Average ”smartness” Time

12. FCI FCI ICI ICI CCI CCI SCI SCI HCI HCI BIQ If you are so smart - prove it! 160 140 120 100 80 60 40 20 0 Average ”smartness” Periode 2 3 1

13. BSC (Kaplan&Norton) Financial Vision and strategy Customer Process Learning and developement

14. BusinessIQ compared with BSC Engage- ment + Financial Learning Identity . . +++ Engage- ment ++

15. Two ”similar” units in the same company- Who, A or B, has the better result?

16. What do you ask of your manager? • Focus me • Equip me • Use me • See me • Care about me • Develop me HCI -Gallup-

17. BusinessIQ=Five Capital Indexes • Human Capital Index (HCI = 24) • Strategy Capital Index (SCI = 19) • Customer Capital Index (CCI = 14) • Identity Capital Index (ICI = 21 ) • Financial Capital Index (FCI = 10) Your score = 88 Average score=100 Max score = about 150

18. Expectations Human Capital Index Right tools Strenghts Engagement Profitability Recognition Care The Human Capital Index measures employee engagement Based on research by the Gallup Organization Development

19. Knowledge for value creation Strategy Capital Index Developing tools Access to tools Activation Profitability Using tools The Strategy Capital Index measures an organization’s knowledge sharing and implementation of its strategy Based on theories by Dr. Karl-Erik Sveiby Customer learning Learning together

20. Keep promise Customer Capital Index Fair treatment Problemsolving Engagement Profitability Pride The Customer Capital Index measures customer engagement Based on research by the Gallup Organization Respect Perfect

21. Mission Identity Capital Index Vision Position Identity Unique and demanded Core competence The Identity Capital Index measures how you are mastering your corporate identity Based on research by Gioia, Dennis and James Values and culture Image

22. The FCI calculates the Financial value of the firm using the marketvalue to equity.

23. Capital indexes as measurement tools • Simple indexes that capture emotions and relations of customers and employees • Simplyfies the ideas of Balanced Score Cards • The next-generation’s climate-, satisfaction-, culture- and customersurveys. • Builds on research on ”people first” management, ”Fly wheel” effect and ”tipping point” theory (six steps)

24. + . . +++ ++ BusinessIQ -making business of knowledge • Develop and manage emotions • Manage intellectual capital to improve your business performance • Make the strategy work for people • Predict future earnings • Making business of knowledge

25. Knowledge Management Group DA- Scandinavian branch of SKAglobal About Knowledge Management Group DA KMG DA is a company developing tools and processes for the knowledge-based organization. KMG DA runs The Norwegian Forum for Intellectual Capital and Consortium for Intellectual Capital. Counting in excess of 170 members, the Forum is the arena for developing knowledge management and intellectual capital in practice for Scandinavian businesses. In 2001, the Forum and Consortium was awarded “Best Work 2001” by Sveiby Knowledge Associates, its work was published in Fortune Magazine and Thomas Stewart’s book, “The Wealth of Knowledge”. Knowledge Management Group’s vision KMG DA translates new knowledge of value creation to practical leadership for the knowledge-based company. Knowledge Management Group DA KMG DA assists and facilitates the development of strong brands and action-based organizational cultures by using tools and processes developed for the knowledge-based company. KMG DA emphasizes helping organizations understand, share and apply their existing knowledge of customers and organization. We want to make organizations better for people.

26. Knowledge Management Group - The people • Egil Sandvik (56) Managing Partner, Chartered Member SKA Global egil@kmgroup.no • Bastian Lie-Nielsen (41) Partner, Chartered Member SKA Global bastian@kmgroup.no • Christian Rangen (28) Junior Partner christian@kmgroup.no www.kmgroup.no