THe CICM Model
The
CICM Model | The Three Stages | Strategic
Level | Operational Level | Customization
The
CICM Model
Developed
by N.Al-Ali to provide a comprehensive framework for the management
of intellectual capital regardless of its function in the business
cycle, and whether it is a resource, a process or a product. The CICM
model is based on the idea that creating value from intellectual capital
follows the same business process or cycle like other tangible resources
and assets. The business cycle involves identifying resources, processing
and utilizing such resources to develop a new product, service or
process, and then launching the product with the main goals of competitive
positioning and revenue generation. Intellectual capital as a business
asset follows the same cycle from being a resource (knowledge) to
being processed and developed into a product concept or prototype
(innovation) then into becoming a defined asset that can be used for
competitive positioning and revenue generation (intellectual property).
Based
on this understanding the CICM model purports to manage the intellectual
capital of any business through three stages where value is created
by assembling and mining knowledge resources (knowledge management),
value is extracted by processing the resources into a marketable product
or service (innovation management) and finally where value is maximized
by leveraging the protected and legally defined intellectual capital
through adopting the appropriate competitive and commercialization
strategies (intellectual property management). Each of these stages
supports and reinforces the other where knowledge management provides
the platform for all operations and processes, innovation management
provides the processes that perfect and develop resources into products,
and intellectual property management represents the optimal level
of value maximization. One of the greatest benefits of the CICM model
it that it provides a framework that enables management to do the
following:
*
Understand the relationship between the various disciplines and
approaches that pertain to intellectual capital management
*
Understand the various practices and services
that developed under the banner of intellectual capital management
and know where each of these practices fit under the three stages,
as well as when to use it depending on management objectives
*
Ascertain the exact changes that need to be effected, and whether
such changes are to be made on the strategic/top management level
or the operational/frontline level.
*
Understand the nature of each of the changes required under each
of the three stages, the prerequisites of success, and the returns
that can be expected.
The
Three Stages
Based
on classifying intellectual capital in three groups as knowledge resources,
innovation processes, and intellectual property, the CICM model purports
to manage intellectual capital under the following three stages:
The
Knowledge Management (KM) Stage
Under this stage value is created through managing the organization’s
knowledge resources, whether human or organizational, to ensure that
the organization has the requisite resources to support the critical
business processes and operations in order to attain the desired competitive
position.
The
Innovation Management (IM) Stage
Under this stage value created under the KM stage is extracted by being
transformed into a new product, process or service. The main goal here
is to get to market before the competition and to build the innovation
portfolio that enables the organization to position itself in the respective
markets and grow.
The
Intellectual Property Management (IPM)
Under
this stage value is further maximized by legally protecting the intellectual
capital underlying a particular product or process. legal protection
enables the commercialization of the intellectual asset in analogous
markets and through various networks e.g. franchises and merchandizing
agreements.
The
CICM model provides a framework for the implementation of these three
stages by effecting certain changes both at the strategic and the operational
levels.
Changes
Required at the Strategic Level
At
the strategic level management needs to adopt the appropriate knowledge,
innovation and intellectual property strategies to guide the design
and implementation of the KM, IM and IPM stages respectively. The strategic
level also involves undertaking the following non-exhaustive steps :
*
A knowledge audit at the KM stage for management to assess the adequacy
of the organization’s existing knowledge resources and networks
in satisfying the knowledge needs as informed by the desired competitive
position, and critical business needs.
* A gap analysis at the IM stage to assess the strengths and weaknesses
of the organization’s innovation portfolio and how it enables
the growth plans of each business, and the organization as a whole.
* An IP audit to identify the IP portfolio so that it can be later
distributed to the various business units according to their competencies.
The main goal here is to activate the portfolio for competitive positioning
and revenue generation.
These
practices required at the strategic level are designed to enable management
to recognize the strengths, weaknesses, opportunities and threats that
the intellectual capital base of the organization presents and to devise
appropriate strategies that enable the various business units to leverage
the strengths, exploit opportunities, and to manage the risks involved.
Changes
Required at the Operational Level
On
the operational level three types of change need to occur under each of
the three stages as follows:
Structural changes – relate to changes in the organizational
structure where new positions and departments are created to oversee
certain programs e.g. the formation of communities of practice under
KM, the establishment of internal and external networks under IM,
and the formation of IP strategy and synergy groups under IPM.
Cultural
changes – relate to creating and encouraging the right
cultural values that foster knowledge sharing, innovation, and IP
protection and commercialization. These include effecting a number
of changes to employees' compensation and reward systems, establishing
a venture capital unit and implementing an IP program.
Installing
enabling systems and tools – relate to installing the
tools and systems to support the management of knowledge, innovation
and intellectual property. These include but are not limited to communication
tools, information visualization tools, measures, idea generation
tools and methods, IP valuation and assessment tools, and competitive
intelligence programs.
The
Comprehensive Intellectual Capital Management
book presents a detailed step-by-step guide for the choice of appropriate
strategies, conducting knowledge and IP audits, managing the innovation
portfolio, forming communities of practice, designing the IT infrastructure
to support KM, managing an alliance portfolio, arranging skills in competence
centers, implementing idea generation, stage-gate new product development,
and lead user methods, activating the IP portfolio through IP competitive
and commercialization strategies, establishing an IP program, etc. The
book also contains guidelines as to how to customize the CICM model to
organizational needs. This involves considering three variables as briefly
outlined below.
Customization
of the CICM model
The
CICM model is based on the contention that the three stages reinforce
each other, and that each organization needs to implement all stages
at least to a basic level. That being said an organization should not
implement all stages robustly but rather customize the CICM model for
their situation. The situation of each organization depends on its industry,
culture and strategy. The industry of the organization defines the type
of the intellectual capital that drives value therein. For the chemical
industry for example intellectual property (patents in this case) is
the main intellectual value driver and hence organizations in such industry
need to implement the IPM stage robustly and the other two stages to
the level that supports the IPM stage.
The
culture variable relates to whether the organizational culture is ready
for the change to be introduced. A stage should be implemented fully
only if the right culture for it is put in place or the changes introduced
will not be effective. Studies have shown that the main reason for failure
of KM initiatives is an adverse culture. An organizational culture that
breeds knowledge hoarding is apt to defeat any KM program no matter
how robust until transformed to one that fosters knowledge sharing.
In fact that was the reason behind the failure of many KM initiatives.
The example of British Petroleum (BP) is directly on the point here,
where BP's initial attempts failed as a result of an adverse culture.
It was not until BP adopted a new vision as a learning organization
and effecting a number of changes to the job design that KM saved BP
from the brinks of bankruptcy in the late 1990s. Cultural change is
not only a long process but one that requires both persistence and adjustments
to work and personnel systems. Therefore none of the CICM stages should
be implemented before the requisite culture is put in place. In customizing
the CICM model to the organizational situation it is prudent to start
with implementing the stage which the organizational culture can support.
The
organization’s strategy variable relates to its vision, identity,
history and overall business strategy. Each of the three stages is based
on an underlying philosophy which in turn gives rise to related strategic
thrusts. At the same time each organization has a certain philosophy
that defines its strategic thrust and the way it defined its business
and social identity. In customizing the CICM model the organization
should impelement to the robust level the stage which is aligned with
its overall business strategy. The core purpose of the three stages
of CICM is to enhance the future performance of the organization and
sustain its value creation processes. However, each of these stages
approaches this purpose through a different strategic focus. While KM
focuses on transforming the organization into a learning one, IM focuses
on empowering employees and customers to develop as an innovative organization,
and IPM focuses on using IP for competitive positioning and revenue
generation where the organziation becomes an IP factory.
