Looking at the reputation metrics from the Steel City Re Intangible Asset Finance (corporate reputation) Index below, Ford shows a rising IA index and decreasing EWMA IA Index volatility with a final log magnitude of 2 while GM shows opposite directional movements and a final volatility log magnitude of 3. Our question to you - what business processes do you think are the most important drivers of corporate reputation in this sector: safety, innovation, quality, sustainability, ethics or other? We look forward to hearing from you on this blog (post a note) or email the Society at secretariat@iafinance.org.
By the way, in case you were wondering, the number 1 ranked firm in this sector as of 17 April is Honda Motor Company Ltd (NYSE:HMC) with a return on equity this past year of 45%.
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Four days before President Obama asked Rick Wagoner to step down as GM Chairman & CEO, I delivered the Automaker Patent Asset Intelligence Report to the administration's Auto Task Force.
While I did not overlay the patent portfolio analysis data with Nir's reputation data, the trend lines between patents and reputation certainly point in the simiilar directions (for both Ford and GM, respectively),
Looking at patent metrics as shown in the report:
1. Using patents as a proxy for corporate R&D strategy, GM's R&D direction moved AWAY from "green technology", and began encroaching on Google's in-vehicle information systems. Even before the recent shift away from Green Tech technology, GM had only 15.1% of its portfolio allocated to Green Tech. On the other hand, Toyota's portfolio ranked #1 with 29.1% Green Tech, followed closely by Ford's 26.3%. GM's most recent Green Tech patent focus actually fell to about 5%.
2. Overall portfolio technology quality scores earned Chrysler (234) the #1 spot compared to Ford (223), GM (218), Toyota (207) and Volkswagen (179).
3. In forward citation count (a proxy measurement of peer recognition of earlier prior art technology), Ford averaged 8.07 forward citations per patent, edging out GM's average of 7.94 forward citations per patent.
4. Every portfolio contains "poor quality" patents. Applying the conclusions of various empirical studies, the automaker's portfolios were analyzed to identify patents that met the "poor quality" criteria. Based on the data, Ford's portfolio contained 16.6% (1,089) poor quality patents, while General Motors portfolio contained 18.3% (1,096).
Although GM did edge out Ford in patent legal strength scoring, overall, small shifts can make a big difference.
When Michael Phelps edged out Milorad Cavic of Serbia to win the 100 meter butterfly, tying Mark Spitz' record, and earning his 7th gold medal, the win came by only one one-hundreth of a second.
"Edging-out" can be the difference between winning and loosing. However, perhaps the most important information learned is that if intangibles can be MEASURED, then one can begin computing the scores.
If intangible assets do in fact comprise 85-90% of a company's market cap, CXOs must begin intangible measurements for effective intangible management.
Download a complete copy of the APA-Intel Auto Report from http://www.andygibbs.com/cxo-ip-advisor.asp