Intellectual Capital at Skandia
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Intellectual Capital at Skandia
Intellectual capital (IC) is defined by Chong (2008) as:
“A non-monetary asset without physical substance but it possesses value or it can generate future benefits”
This is embodied at Skandia a multinational insurance and financial services company, which systematically measures and reports a number of IC which are classified under human, structure and customer capital as enumerated by Choong (2008 p622). Competence base of the organization is the existing, developed and shared knowledge, skill and experience of employees resulting in innovation and development, a human IC. Sharing competence within the organisation requires appropriate information technology systems comprising structure IC along with organizational procedures and infrastructure. Skandia’s customer base and the growth of these account for customer IC.
IC is important to Scandia AFS as it gives current and prospective investors understanding of the actual value of the company accounting for the intangible assets not captured on the balance sheet, also it makes operations more efficient, saving money over time, increasing profitability and company performance as management has visibility of IC which guides decision making. Through prototyping start up time has reduced by one third, resulting in 30% growth in new business, leading to savings and reduced pressure on available cashflow
The IC dimensions measured were determined by each operating unit of Scandia ensuring relevancy, through cross functional engagement ratios were developed and baselines determined against which periodic measures are compared and reported for decision making by management to increase performance.
At Skandia a dashboard is used to track and report the ratios of IC within the organisation, the Scandia NavigatorTM (Edvinsson,1997; Edvinsson and Malone, 1997 cited in Chong, 2008 p627).