Transcript Advanced Tools for Visualizing, Measuring and Managing

Update 2014: Now three projects
Project NEMO (New/Next Economic Model)
http://project-nemo.org
INSEDE (Institute for Sustainable Economic Development
http://insede.org
Business Engineering Systems (Toolset)
http://bengin.net/bes/
bengin
Advanced Tools for Visualizing,
Measuring and Managing Intangibles
5th European Institute for Advanced Studies in Management (EIASM), Workshop on
Visualizing, Measuring and Managing Intangibles and Intellectual Capital
Mapping values
bengin
Dresden (Germany), 8-9 October 2009 – © 2009 [email protected] – www.bengin.net © 2009 bengin
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Speaker
Peter Bretscher,
Founder and owner,
Engineering Office for Business Development
Ingenieurbüro für Wirtschaftsentwicklung, Eggersriet / Switzerland
Function in the Ing.Büro: Advisor to organizations in the design of economic steering and management
systems that integrate the intangible perspective
 Engineering background (worked 20 years in several functions along the whole value chain of an international R&D and
manufacturing company based in Switzerland)
 Developed over the last 20 years the “Business Engineering System” (Tools for Business Administration)
a MindSet and models for structuring and quantifying the tangible and intangible resources.
 In addition he is supporting companies, consultants, and other organizations in innovation and project management, in
intellectual property and patent management, and in setting up business plans and defining enterprise strategy
 He has initiated and is leading the “bengin” project. Its mission is to facilitate the awareness for and further development of
management concepts that enhance the traditional economic model
 Since 1994 he is teaching business engineering und business planning at the University of Applied Sciences in St. Gallen,
Switzerland.
E-Mail: [email protected],
Website: http://www.bengin.com/, Blog: http://www.bengin.net/wp/, Twitter: http://twitter.com/peterbretscher
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Mapping values
© 2009 bengin
Agenda

Development of Economy

Innovation of Products
- and Economic MindSet as a Product

Two Outpaced Paradigms

The Vector Solution

Conclusion and Outlook
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Mapping values
© 2009 bengin
Development of economic assets
Relative significance
of economic goods
100
intangible goods
80
60
40
20
tangible goods
Low
middle
high
state of economic development
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Mapping values
© 2009 bengin
Development of Business Offerings
Business Offerings
(percentage)
100
80
60
Services
40
Licenses
Products
20
Low
middle
high
state of economic development
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Mapping values
© 2009 bengin
Summary
«Many of the patterns of nature we
can discover only after they have
been constructed by our mind.»
Friedrich von Hayek
This are two developments we see in the real reality.
Intangibles are (and will be) more and more important.
Intangibles in a form of knowledge (use-how, make-how, think-how)
and in a form of intellectual property rights.
In order to enable a sustainable development we need an enhanced
theory that has the means for structuring and quantifying this (new)
reality.
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Mapping values
© 2009 bengin
Agenda

Development of Economy

Innovation of Products
- and Economic MindSet as a Product

Two Outpaced Paradigms

The Vector Solution

Conclusion and Outlook
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Mapping values
© 2009 bengin
Idea to Innovation
Phase of innovation: 5%
Phase of invention: 25%
Phase of incubation: 70%
Examples:
Concrete
Inforced concrete
Aluminium
Telephone
Radio
Radar
TV
Computer
ICs
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22
29
?
56
29
22
115
40
28
7
53
14
13
2
22
9
2
20
18
26
2
2
1
8
5
3
years
years
years
years
years
years
years
years
years
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Mapping values
© 2009 bengin
Development of Business Theory
(S-Curve of Product Development)
Rational MindSet II
Additional:
· Intangible Assets
· Subjective Value Metric
1782
Rational MindSet I
Anna Goeldin
Last witch beheaded
(Switzerland)
Classic:
· Tangible Assets
· Monetary Value Metric
Mises
Adam Smith
Moral
Sentiments
1759
Marx
Wealth
of Nations
1776
Keynes
Gauss
Schumpeter
Towne
1750
1800
1850
Taylor
1900
1950
64 Bit
32 Bit
16 Bit
8 Bit
4 Bit MS-DOS
2000
2050
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Mapping values
© 2009 bengin
Three Worlds – trigger for invention?
Virtual Realities (World 3)
Doctrines, Teachings,
MindSets, Rules
Personal experience (World 2)
Subjective world
Real for one person
Real Reality (World 1)
Focus: tangible, monetary
intangible,
nonmonetary
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Mapping values
© 2009 bengin
World 3: Six interdependent fields
Virtual Realities (World 3)
Doctrines, Teachings,
MindSets, Rules
1776
2000
Real Reality (World 1)
Focus: tangible, monetary
intangible,
nonmonetary
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Mapping values
© 2009 bengin
World 3: Six interdependent fields
Virtual Realities (World 3)
Doctrines, Teachings,
MindSets, Rules
Additional:
· Intangible Assets
· Subjective Value Metric
Classic:
· Tangible Assets
· Monetary Value Metric
Mises
Adam Smith
Moral
Sentiments
1759
Marx
Wealth
of Nations
1776
Keynes
Gauss
Schumpeter
MS-DOS
Towne
1750
3. Teachings to the Management
Business Models
Consultants
1800
1850
Taylor
1900
1950
2000
2050
6. Chartered Accountants
Classic:
· Tangible Assets
· Monetary Value Metric
Mises
Adam Smith
Moral
Sentiments
1759
Marx
Wealth
of Nations
1776
Keynes
Gauss
Schumpeter
MS-DOS
Towne
1750
5. Laws (legal, paralegal)
1800
1850
Taylor
1900
1950
2000
2050
Classic:
· Tangible Assets
· Monetary Value Metric
Mises
Adam Smith
Moral
Sentiments
1759
Marx
Wealth
of Nations
1776
Keynes
Gauss
Schumpeter
MS-DOS
Towne
1750
1800
1850
Taylor
1900
1950
2000
2050
Classic:
· Tangible Assets
· Monetary Value Metric
4. Bookkeeping
Mises
Adam Smith
Moral
Sentiments
1759
Marx
Wealth
of Nations
1776
Keynes
Gauss
Schumpeter
MS-DOS
Towne
1750
2. Business Economies, „Wealth of Enterprises“
1800
1850
Taylor
1900
1950
2000
2050
Classic:
· Tangible Assets
· Monetary Value Metric
Mises
Adam Smith
Moral
Sentiments
1759
Marx
Wealth
of Nations
1776
Keynes
Gauss
Schumpeter
MS-DOS
Towne
1750
1. Political Economies, „Wealth of Nations“, Ground – Work – Capital
1800
1850
Taylor
1900
1950
2000
2050
Classic:
· Tangible Assets
· Monetary Value Metric
Mises
Adam Smith
Moral
Sentiments
1759
Marx
Wealth
of Nations
1776
Keynes
Gauss
Schumpeter
MS-DOS
Towne
1750
1776
1800
1850
Taylor
1900
1950
2000
2050
2000
Real Reality (World 1)
Focus: tangible, monetary
intangible,
nonmonetary
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© 2009 bengin
Summary
«Count what’s countable.
Measure what’s measurable.
Make measurable what’s not measurable.»
Galileo Galilei
Tools for mapping economy and the rules for planning and reasoning
business objects are divised in six interdependent specialized fields
of profession.
In order to have an reasonable impact all areas/fields have to work on
solutions.
Even if a coordinator would be an idea....
I expect, that the development will follow a „swarm behaviour“.
The direction is driven by the need for:
(i) a framework that structures the intangibles and
(ii) a value-metric that allows calculation with subjective values.
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Mapping values
© 2009 bengin
Agenda

Development of Economy

Innovation of Products
- and Economic MindSet as a Product

Two Outpaced Paradigms

The Vector Solution

Conclusion and Outlook
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Mapping values
© 2009 bengin
Enhancing Paradigms
Deeply ingrained assumptions, teaching programs, mental
models, „taken as granted“. They determine how we are aware
of the reality and influence our behaviour.
At least 17 paradigms to be revised.
1.
Ground, Work, Capital (as resources)
... to be substituted by a framework that is based on
tangible and intangible resources.
2.
Value paradigm
Value – as a result of a valuation process – has
objective AND subjective aspects / dimensions.
A scientifically correct value metric system has to reflect
this necessity. Therefore it has to be multidimensional.
(Linear measure vaporises the essence.)
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Mapping values
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Objects, Attributes, Value-Measures
Resources
Objects
Explicit Values
Numbers
tangible
intangible
Real
Numbers
Unit:
CHF, $, €
Objective Numbers
Unit:
iCHF, i$, i€
Subjective Numbers
Imaginary
Numbers
Implicit Values
Complex
Numbers
Unit:
CHF/iCHF, $/i$, €/i€
combined
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Vector
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Mapping values
© 2009 bengin
Summary
«It is the theory which determines
what we can observe.»
Albert Einstein
Enhancing this two overhauled paradigms is possible.
(Even if it takes some time.)
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Mapping values
© 2009 bengin
Agenda

Development of Economy

Innovation of Products
- and Economic MindSet as a Product

Two Outpaced Paradigms

The Vector Solution

Conclusion and Outlook
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bengin
Mapping values
© 2009 bengin
The Vector
y
4 vectors
of objects
Single 2D-Vector
Value b
Vector = a + b
x
y
Adding
vectors
Value a
x
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Vector Type 1
More samples:
http://bh.bengin.com
http://www.bengin.net/soft/vektorbeispiele01_d.htm
bengin
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Mapping values
© 2009 bengin
Vector Type 1 (Aggregation and Drilldown)
subjective
customer value
(of the product)
Functionality
qualitative / subjective
Brand / Image
 R&D
effectiveness
DrillDown
quantitative / financial
Body /
Design
Chassis
Engine
R&D expenditures / input ressources
 R&D efficiency
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Mapping values
© 2009 bengin
Vector Type 1 (Public Service Departments)
120
100
9 Police&Justice
80
8 Others
7 Healthcare
60
6 Economy
5 Education
40
4 Infrastructure
3 Finance
20
2 Defense
1 Foreign Affairs
0
0
Effects (subjective citizen perspective
Public
Service
Departments
500
1000
1500
2000
2500
3000
3500
4000
4500
5000
Costs
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Mapping values
© 2009 bengin
Vector Type 1 (practical application)
Asking customer
(Internet)
Decision cockpit
(links internal economic data with answers of customers)
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Mapping values
© 2009 bengin
Vector Type 2: Linking „objective“ with „subjective“ axis
subjective
(intangible) view
intrinsic value
use value of
investment for
investor A
uv A =
(p A)2 – (bv)2
use value of
investment for
investor B
uv B =
(p B)2 – (bv)2
book value price investor B
is willing to pay
objective (financial) view
price investor A
is willing to pay
price
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Mapping values
© 2009 bengin
Overpriced Papers? Is the Vector a prognostic tool?
....a year before the downturn of the classic curve....
...the Vector Map indicated a change of Coca Cola Amatil.........
Value Vector
Stock Exchange Value
9000000000
12000000000
10000000000
97
8000000000
97
96
98
6000000000
99
4000000000
1999
1998
1997
1996
1995
1994
1993
1992
1991
1990
2000000000
0
1992
6000000000
Implicit Values
8000000000
1991
96
7000000000
1990
1993
5000000000
98
4000000000
1994
1995
3000000000
1996
2000000000
1997
1998
1000000000
99
0
0
1999
2E+0 4E+0 6E+0
9
9
9
Explicit Values
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Mapping values
© 2009 bengin
14 types of industry (Sveiby)
iV
400.00
350.00
Food
300.00
Media
Services
Electronic
250.00
Information Technology
Mechanical Industries
Insurance
200.00
Steel
Electricity, Gas
Wood Industries
150.00
Bank
Automobil
Real estate
100.00
Health
50.00
0.00
0.00
20.00
40.00
60.00
80.00
100.00
120.00
mV
Source: Morgan & Stanley Capital International World Index; Cited in: Sveiby, Wissenskapital; Seite 23; Mi-Verlag 1998
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Mapping values
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Intangible Assets or Shareholders Profit Expectation?
implicit
value
[i - Mia]
Coca-Cola
80
75
The explicit Value and the implicit
Value together draw a complete
picture about the company’s value
and its development.
70
65
60
55
IBM
Microsoft
50
45
The question remains:
Is the implicit Value given by the
real Value of the company?
Is it given by some marketing tricks?
Which part of it is made by the
Shareholders Value Expectation?
40
35
30
McDonald's
25
Ford
20
15
10
5
5
10
15
20
25
30
35
40
45
50
55
60
65
70
75
80
explicit value
[Mia]
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Mapping values
© 2009 bengin
A better model for new decisions
Value Points of 75 enterprises
10'000
Investors: Attention!
9'000
8'000
implicit Values
7'000
6'000
5'000
4'000
3'000
2'000
Management could use the
potential more effective.
1'000
0
0
1'000
2'000
3'000
4'000
5'000
6'000
explicit Values
bengin
7'000
8'000
9'000 10'000
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Mapping values
© 2009 bengin
Tracking the development of an enterprise
Pointer of vector for five years
1'400
92
1'200
implicit axis [ Mio iCHF]
1'000
93
800
Question:
"What happened in the year 1996?“
95
Answer:
Part of enterprise sold.
94
96
2nd Question:
Is this loss of intangible values compensated by the price received for the sold
part of enterprise.
600
400
200
Answer: ?
0
0
200
400
600
800
1'000
explicit axis [Mio CHF]
1'200
1'400
1'600
 Ask Auditor – if he’s still available….
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Mapping values
© 2009 bengin
Summary
When you can measure what you are speaking about and express it in numbers,
you know something about it; but when you cannot measure it, when you cannot
express it in Numbers, your knowledge is of meagre and unsatisfactory kind.
Lord Kelvin
With Vector 1 it is possible to show any desired values in context.
With Vector 2 it is possible to introduce a standard for subjective values.
After the relativity of time for the physicists 100 years ago, an analogical
step can be made by economists with the relativity of value.
It will enable a more sustainable economy.
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Mapping values
© 2009 bengin
Agenda

Development of Economy

Innovation of Products
- and Economic MindSet as a Product

Two Outpaced Paradigms

The Vector Solution

Conclusion and Outlook
31
bengin
Mapping values
© 2009 bengin
Summary
«Many of the patterns of nature we
can discover only after they have
been constructed by our mind.»
Friedrich von Hayek
I am very optimistic, that the economic theory will reach a higher level of
applicability.
An enhanced economic paradigm (in that intangibles and subjective
values will count) will improve the reasoning and decision process
and in it‘s consequences will enable a new dimension of wealth.
Tree samples of influence we see at that time:
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Mapping values
© 2009 bengin
Four Main Points
1. Structure of Enterprise
2. Measures and Metrics
3 Offerings
7 Processes
6 Primary-Resources
Enhanced System of Measures
that Integrates Intangibles
and Subjective Metrics
3. Strategy of Enterprise
4. Optimizing Value Net
Outside-In
and
Inside-Out
From
supplier of supplier
to
customer of customer
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Four Main Points
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Mapping values
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Back- and Frontside of the Economics MindSet
„imaginary“ business economics
„subjective“ Values, not tangible, but real
„traditional“ business economics
„objective“ Values [$, £, ¥. €, CHF]
Imaginary P&L of potential
Classic P&L
Rights
O I
Dismissals
Engagements
+
Outsourcing
Absences
Death
-Intell. prop
++
Profit-/Loss
---------------------------Sum
+ -
Products
Services
Imaginary Balance
intangible assets
„subjective“
O In
Rawmaterial
Tools, Means
Wagues Mind
Wagues Hand Sales Rights
+
Sales Services
+
Sales Products
+
P/L
---------------------------Summe
+ -
Classic balance of
tangible assets
„objective“
Classic Rules,
Image
Flow of Information
Transparence
Know-How
Goodwill
Sense, Climate
Identification
Work with joy
Patents
Copyrights
Brands
Current assets
Subjective Experiences,
Fixed Assets
Standards and
Values and Believes
Equity capital
Design of products
(properties)
Fertigungsgerechte
Konstruktion
Qualitätsgerechte
Intangible means of production
Security
Praise, thank
Education
Enlightening
Acceptance Transparence
____
Outside capital
Hidden reserves
Konstruktion
Benutzergerechte
Konstruktion
Value Metrics and Measures
Product calculation
Headwork
Handwork
Tools
Manufacturing
Original cost
Margin
Net SP
Margin
-----------------------Gross SP
Hidden reserves
© 1985 / 2008 Peter Bretscher
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© 2009 bengin
Back- and Frontside of the Economics MindSet
„imaginary“ business economics
„subjective“ Values, not tangible, but real
„traditional“ business economics
„objective“ Values [$, £, ¥. €, CHF]
Imaginary P&L of potential
Classic P&L
Rights
O I
Dismissals
Engagements
+
Outsourcing
Absences
Death
-Intell. prop
++
Profit-/Loss
---------------------------Sum
+ -
Products
Services
Imaginary Balance
intangible assets
„subjective“
O In
Rawmaterial
Tools, Means
Wagues Mind
Wagues Hand Sales Rights
+
Sales Services
+
Sales Products
+
P/L
---------------------------Summe
+ -
Classic balance of
tangible assets
„objective“
Image
Flow of Information
Transparence
Know-How
Goodwill
Sense, Climate
Identification
Work with joy
Patents
Copyrights
Brands
Current assets
Fixed Assets
____
Outside capital
Equity capital
Design of products
(properties)
Designed for
production
Designed for
Intangible means of production
Security
Praise, thank
Education
Enlightening
Acceptance Transparence
Hidden reserves
quality
Designed for
user’s needs
Product calculation
Headwork
Handwork
Tools
Manufacturing
Original cost
Margin
Net SP
Margin
-----------------------Gross SP
Hidden reserves
© 1985 / 2008 Peter Bretscher
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Mapping values
© 2009 bengin
Pricing Values?
Economic Value Architecture & Engineering
mat V
[$]
Imaginäre BWL
Stock - Börse
Klassische BWL
Time
Introducing
axis for
intangibles
M
(tangible)
Market for Papers
Tangible and intangible
Balance
I
(intangible)
Balance
immat V
[i]
(Stock-Exchange)
assets of an enterprise,
M
REV
(tangible)
P&L
(Real Enterprise Value)
I potential of an enterprise,
SPE
(Shareholders Profit Expectation)
P&L
Struktur*)
(intangible)
immat V
mat V [$]
values of an enterprise
REV + SPE = TEV
= Total Enterprise Value
= „Shareholder Value“
mat V
*)
As for example:
BSC, EVA, BIG, UPR, B’E….
How to explain?
immat V
[i]
Value Track
(Ortskurve, REV)
How to determine „fair value“ (price) for a paper?
Ic-Function
mat V [$]
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Mapping values
© 2009 bengin
Pricing Values?
Economic Value Architecture & Engineering
mat V
[$]
enhanced nonmonetary
Stock exchange
classic monetary
Time
Introducing
axis for
intangibles
M
(tangible)
Balance
I
(intangible)
Balance
immat V
[i]
M
REV
(tangible)
P&L
(Real Enterprise Value)
SPE
I
P&L
(Shareholders Profit Expectation)
Structure*)
(intangible)
immat V
mat V [$]
REV + SPE = TEV
= Total Enterprise Value
= „Shareholder Value“
mat V
*)
As for example:
BSC, EVA, BIG, UPR, B’E….
How to explain?
immat V
[i]
Ic-Function
Value Track
(Ortskurve, REV)
mat V [$]
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Mapping values
© 2009 bengin
And now?
A long journey begins with just one step.
Chinese
You are welcome and invited to take part of that journey.
[email protected]
Mobile: ++41 79 650 49 04
Eggersriet, Switzerland
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Mapping values
© 2009 bengin
bengin
Beyond Limits of Classic Business Paradigms
Thank You
Web http://www.bengin.com
Blog http://www.bengin.net/wp/
Twitter http://twitter.com/peterbretscher
Special Website http://www.bengin.net/dresden/
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© 2009 bengin
backing slides
bengin
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Mapping values
© 2009 bengin
The four Quadrants of Value generation
+ Intangibles [i$]
Q I: Transform -T/+I
in
QI
Q II
R&D
Transformation
(T to I)
New projects
Revisions of offerings
Insourcing/merging
....
Q II: Generation +T/+I
Value
Generation2
out
·
·
·
·
·
·
·
·
Daily business
Selling, dispatch
(Re)Production
....
in
- Tangibles [$]
+ Tangibles [$]
Value
Degeneration
Transformation
(I to T)
Q III: Transform -I/+T
·
·
·
Outsourcing
Leaner production
....
Q IV: Degeneration -I/-T
Q IV
Q III
out
- Intangibles [i$]
·
·
Graveyard
....
© 1996/2010 [email protected]
Part of Business Engineering Systems,
Registered Copyright TXu 512 154
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Possible to
calculate with and
visualize 2D-Values
Development of (economic) Value-Metrics
(Compound Value-Metric System with the subjective, implicit Value axis)
Why Metrics?
- comparing, comprehensible, reproducible
- Making rationale (and indirect) communication easier.
% i$
% i$
Strong need for
interpretation
Measures reduce need
for interpretation
$
4. Quantitative Metrics
(multidimensional)
$
3. Quantitative
Metrics (linear)
$
2. Qualitative
Metrics
$
hot, cold ...... AAA, A+, B, C
1. Normative "Metrics"
Principles, ....The xx "Commandments"
Difficult to visualize.
No tools and rules
for numerical or
graphical
calculations.
Axis of time
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Von verschiedenen Organisationen in verschiedenen Projekten
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Mapping values
© 2009 bengin
Innovating Business Models
Technologies
new
old
old
Products
+ Services
new
Bus. Techniques
Products
+ Services
+ Rights (IP)
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Mapping values
© 2009 bengin
Measuring performance
Creating Values
Counting Values
i$
Potential
implicit values
i$
$
Invest
explicit values
$
generated earnings
bengin
http://www.performanceprofile.com
http://www.balancedscoremap.com
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Mapping values
© 2009 bengin
Value (Price) Development of Paper
(Shareholders view)
iV
3000 Mio
2'520
2500
Shareholders Profit Expectation
2000
1969
SPE
Initial Base (Value estimation)
SPE
1500
Initial Offer, March 24. 2000
Evening 1st Day
1000
648
551
500
97
0
0
0
10
20
30 Mio
mV
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Mapping values
© 2009 bengin
Explained world
Value
Nach: Marle Marks,
Manager Magazin 3/85
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Mapping values
© 2009 bengin
Color measures
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Mapping values
© 2009 bengin
1D – 2D rulers, metrics
50
bengin
Mapping values
© 2009 bengin
Vector: Velocity
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bengin
Mapping values
© 2009 bengin
Next step: Focus on economic MindSetting / Paradigms
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bengin
Mapping values
© 2009 bengin
New MindWare & SoftWare  quantum leap in the
simulation and planning of todays economy.
Solutions
Applikations
Applications
Operating System
Economic. Theory
MindWare
SoftWare
(Form & Content)
Basics
Hardware
Real economy
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bengin
Mapping values
© 2009 bengin
Basics of 2D-Value-Vector
x, y = two arbitrary properties of an object
y
Illustration 1
x
x
y
x
y
Cost
Price
Turnover
Volume [m3]
Transports
initialized
Transports
finished
Cost
Deckungsbeitrag
Budget
Rechnung
Price
Retouren
Medical
Properties
Subjective
condition
Turnover
Mitarbeiterzufriedenheit
Turnover
Sparten
gewichtet
Retouren
Kundenzufriedenheit
y [i$]
x, y = explicite ("objective") and
implicite ("subjective") Value-Properties
as a Multi-Value-Compound.
Illustration 2
x [$]
x1
bengin
x2
x1
x2
Samples
Sum of balance
Sum of Share
Price
Shareholder Value
Wagues
Turnover
Weighted added Value
Price VW
Price Porsche
Subjective Added Value
Mapping values
© 2009 bengin
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