Question 9
of 100
Our plans to reach new targets
describe how we will change (eg, by improving process or
systems, or applying resources).
We recommend that you answer the questions in the order determined by the "next" button below. However, to allow you flexibility, the links below allow you to jump to different Principles.
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Information is presented under the following
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Why this is important
Deploy assets to implement plans
Make full use of all assets
Intangible assets
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Avoid doing these poor practices
Rubbery, open-ended plans without targets or plans to achieve
them.
No strategies to achieve new futures.
Only recording standard balance sheet assets.
Intellectual capital, core competencies and knowledge are not
considered assets. No strategies to grow or protect them or
use them for competitive advantage.
Learnings from analysis of overall performance not deliberately
developed and not directly shown in plans.
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Do these good practices
Plans are established to change/modify/improve the system and
its processes to meet targets outside of the current capability.
The capabilities of the organization are understood and deliberate
strategies are implemented to increase them.
The core competencies of the organization (ie those things
that it does very well compared with other organizations and
other organizations) are understood, protected and developed
through deliberate strategies.
Plans are widely distributed and responsibilities assigned;
plans monitored and project managed. Necessary resources are
allocated.
A broad and inclusive view of what assets and resources are.
Processes to determine the value provided by assets and the
effect of changes in the use of assets (ie an Economic Value
Added model including a `what if' capability, statistical simulations
and sensitivity analysis). Plans to maximize the value from
these assets and eliminate losses from assets.
Value assigned to non-balance sheet assets such as intellectual
capital, knowledge and core competencies.
Processes to manage all the organization's assets to ensure
that they create value for the organization (including non-balance
sheet assets such as intellectual capital, knowledge, core competencies).
Documented increases in "self-created assets" such
as intellectual property, intellectual capital, image capital
and knowledge as well as in standard balance sheet assets.
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Principle 2: Focus on Achieving Goals (Item 5)
Clear direction allows organizational alignment and a focus on achievement
of goals.
Alternatively: Mutually agreed plans translate organizational direction
into action.
Your plans to reach new targets must describe how you
will change (eg, by improving process or systems, or applying resources).
This is the main focus of Principle 4. If you want a different
outcome, you must improve the system. In this case, you want to reach
a new target. If your current system and processes were capable of doing
it now, you would not need to set a new target. If your target is within
your capability, you don't need a plan to reach it. It is ho-hum. If
your target, is outside your capability, you will certainly need a plan
to reach it, because you will have to change something (resources, processes,
ways of doing things). When you set the target, you might not even know
what you will need to change to reach the target. But you will need
a plan.
The non-people resources and processes must be capable
of providing the outcome you want. If they are not, you must plan to
improve them so that they are capable. That phpect is covered in Principle
4 (`To Improve the Outcome, Improve the System').
You must plan to apply resources towards achieving your
Goal. People as well as material, capital and assets. All are usually
scarce.
The organization must deploy resources and assets to implement its
strategies and plans. Plans need to be resourced with money and people.
Usually the main resources needed to implement plans are people.
Your strategies should include plans to have the right numbers
of skilled, knowledgeable and empowered people available to implement
the rest of your plans.
The organization must make the fullest use of all assets available
to it. All assets, not just the physical assets. Unfortunately, accountants
usually regard assets as only those things that can be included in a
balance sheet with a dollar value. We know that there are many assets
that we do not yet have a way of counting. Especially those assets to
do with the knowledge held by people — intellectual capital, expertise.
These are often exactly those things that make the core competency
of the organization. For example, intellectual property, databases,
knowledge, image capital, relationships with suppliers and customers,
expertise.
Microsoft, Amazon and Yahoo are examples. These companies do not hold
many physical assets. However, their enormous values are shown in their
intangible assets – their Intellectual Property.
This means that for our competitive advantage,
we must look after these resources. Probably the biggest barrier to
being able to do that effectively is that we cannot measure them. In
fact, our main measurement system (based on a very old paradigm) measures
their value as zero — which explains a lot of organizational behavior."Our
people are our most important resource". But there are not on the
Balance Sheet. So they can't be important. What you measure is what
you get.
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