Scott A. Snell Cornell University 393 Ives Hall Ithaca, NY 14853 (607) 255-4112 scott.snellcornell.edu,Competing through Knowledge: The Human Capital Architecture,IBM,You can get capital and erect buildings, but it takes people to build a business.” Thomas J. Watson, IBM,Did IBM forget? $168 billion (Tobins Q = 2.1) Hardware, software, and services Nobel prize-winning scientists 3,768 patents (1993-1995,Whats Happening Today,Industry Changes Globalization Information technology,Need for Organizational agility Speed Innovation Cost,Knowledge-based strategies Core competencies Innovation External partnerships,Leading to,New Business Equation,Core Competence,is a bundle of skills and technologies that enables a company to provide a particular benefit to customers. Hamel and Prahalad, 1994,SONY Miniaturization Pocketability FEDERAL EXPRESS Logistics On-time delivery HONDAEngine design/mfg.Reliable performance MOTOROLAWireless technologyUntethered comm,Core Benefit to Competence Customer,Knowledge,Technologies,Processes,Relationships,CRITERIA valuable unique extendable learning,Benefits VALUE = - Costs,UNIQUE = (social complexity + causal ambiguity,LEARNING = (experience x challenge,Competing Through People Identify & develop core skills Integrate diverse activities Respond with agility & speed Empower action Innovate,Core Competence,is a bundle of skills and technologies that enables a company to provide a particular benefit to customers. -Hamel and Prahalad,KNOWLEDGE - customer - technology - operations - managing,PROCESSES - customer segmentation - just-in-time (hrs) - mass customization - build to order (AIM) - ROIC metrics - experimentation,TECHNOLOGY - Premier pages - software installation - TPM triggers (parts, service) - customer purchasing systems,RELATIONSHIPS - customer intimacy (Boeing) - Platinum councils - supplier partnerships (Sony) - employee involvement - third party service maintainers (TPMs) - distribution agreements (UPS, Airbourne,Virtual Integration,Leading to,Value Uniqueness Learning,A low-value product can be made by anyone anywhere. When you have knowledge no one else has access to -thats dynamite. We guard our intellectual assets even more carefully than our financial assets.” -Roy Vagelos, former CEO Merck,KNOWLEDGE - customer - technology - operations - managing,PROCESSES - customer segmentation - just-in-time (hrs) - mass customization - build to order (AIM) - ROIC metrics - experimentation,TECHNOLOGY - Premier pages - software installation - TPM triggers (parts, service) - customer purchasing systems,RELATIONSHIPS - customer intimacy (Boeing) - Platinum councils - supplier partnerships (Sony) - employee involvement - third party service maintainers (TPMs) - distribution agreements (UPS, Airbourne,Positively Outrageous Service,Southwest Airlines,KNOWLEDGE - microbiology - biochemistry - microbiology - imunodiagnostics (antibodies/conjugates,PROCESSES - R&D/Mfg. - bioconjugation - antibody purification - PCR amplification - DNA hybridization - TQM - commercialization,TECHNOLOGY - immunoassays - ELISA (serum/blood) - rapid diagnostics - DNA based,RELATIONSHIPS - CRC-DT, CDC - U.S. Army - World Health Org. - universities - distribution network - employee (science/mkt,C2 = “Rapid Learning,Leading to,An organization at the frontier of its intellectual field is more likely to stay at the frontier. It can attract and challenge more and better intellect than its competitors. By solving more advanced problems, it has more capacity to solve others. And so on.” - JB Quinn,Value Uniqueness Learning,BIOTECH INC,Benefits = - Costs,Combination of people and systems leads to,Human Capital,Social Capital,Organizational Capital,BioTech, Inc.: Intellectual capital,People,Systems,KNOWLEDGE - microbiology - biochemistry - bioconjugation - imunodiagnostics,PROCESSES - R&D/Mfg. - bioconjugation - antibody purification - PCR amplification - DNA hybridization - TQM - commercialization,TECHNOLOGIES - immunoassays - ELISA (serum/blood) - rapid diagnostics - DNA based detection,RELATIONSHIPS - CRC-DT, CDC - U.S. Army - World Health Org. - universities - distribution network - employee (science/mkt,C2 = “Rapid Learning,PEOPLE,SYSTEMS,Core Competence,How does human capital contribute to the core competence,Value Unique,Resources need to be,Benefits VALUE = - Costs,Drives innovation Responds to customer demands Provides excellent customer service Achieves highest quality Instrumental in process improvements Develops new business opportunities Directly affects efficiency and productivity Minimizes costs of production, service, delivery,Not widely available in the market Cannot be bought or appropriated Difficult to imitate or duplicate Specialized KSAs Difficult to replace Customized to our firm Developed through on-the-job experiences Distinguishes us from our competitors,R&D,Manufacturing/ Operations,Distribution,Sales,Sales,TMT,Cust Serv,HR,R&D,Rapids,Fin,Customer Service,Mfg,R&D,R&D Partners,Core Knowledge,Lo