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Précis of
Nellemann Konsulenterne A/S's Intellectual Capital Report
for 1999

Ib Ravn

Summary prepared for a NORDIKA conference in Oslo, Norway, spring of 2000.

Unpublished

Company Facts and Background

Nellemann Konsulenterne A/S is a Danish consulting firm employing some 40 consultants in a wide variety of fields, including town and physical planning, analyses and evaluations, business development, organizational development, human resources and negotiation training.

The 1999 intellectual capital report (ICR) was preceded by the 1998 ICR for Amphion I/S, a consulting firm that was taken over by Nellemann Konsulenterne in July of 1999. Amphion was invited to join the Danish Agency for Trade and Industry (Erhvervsfremme Styrelsen) ICR development project in 1997 and the work continued in Nellemann Konsulenterne.

Our ICR focuses on knowledge activities (rather than resources), that is, what we do with knowledge rather than what knowledge we possess. The ICR gives a broad view of the company’s mission, culture and strategy. Attention is paid to the process of merging the two companies and estimates how well the merger is progressing.

The initiative originated with the CEO of Amphion, then a company of some 20 employees. It coincided with a restyling of Amphion, which had the term "knowledge firm" added to its name. The decision to launch the ICR was reported to employees, most of whom found the move natural to a consulting firm, although a degree of healthy skepticism prevailed as to the quantifiability of knowledge required by the notion of knowledge accounting (et videnregnskab). One consultant was assigned to work out the details of the ICR alongside the initiating CEO, which involved designing a concept for the ICR, collecting the data and writing the report.

The tools employed to manage the intangibles include use of the corporate and departmental strategic plans and their follow-ups, an annual questionnaire put to all employees and management about their time spent on knowledge activities and interviews with management about strategic goals.

The intended readers of the report are current and prospective clients, prospective employees, current employees and other business contacts. Financial stakeholders have proved slow to pick it up.

31 indicators are presented, divided in five groups:

Knowledge resources (8 indicators, including number of employees, sex, ages, academic degrees, professional training, competencies, knowledge domains, sales per knowledge domain)

Knowledge activities
a. Learning (6 indicators, including time spent evaluating completed projects, time spent per new employee in introduction programs, professional training and development, time spent reading professional literature)

b. Knowledge sharing (6 indicators, including extent of teamwork and of interdisciplinary work, peer supervision, number of desk moves)

c. Knowledge development (3 indicators, including competency development plans, employee development review, time spent on tasks perceived as challenging).

d. Merger-relevant activities (4 indicators, including time spent on projects that involve the other old company, perceived utility of various merger initiatives)

An estimated three employee months went into the construction of the Nellemann 1999 ICR, and six employee months into the previous Amphion 1988 ICR.

Operation and maintenance costs are not easily teased out at this early stage – most activities are still development.

Results

The most important result is most likely the public attention that Nellemann Konsulenterne A/S is receiving as a result of having partaken in the Agency of Trade and Industry project and having published an elegant ICR for 1999. The ICR profiles the company as leading-edge in regard to knowledge management and sends a proactive message to current and potential customers and prospective job applicants. Internally, the efforts to put together an ICR have resulted in an increased emphasis on knowledge sharing and employee development as a means to deepen and sophisticate the services offered to clients. It is still too early to discern manifest effects on more tangible parameters, such as gross sales, market penetration, the quality of our services rendered or employee satisfaction.

One important lesson is that a well-written ICR is a nice thing to have (albeit hard to come by), but much more desirable is knowledge lived in the organization. The process of managing, sharing and developing knowledge in the organization seems more important than producing the static report of the organization’s knowledge. While an ICR may remain an important message to be sent to the organization’s stakeholders, its optimal function is to be a means to better knowledge management.