Edvinsson, Corporate Longitude
Kaplan, Norton, The Strategy- Focused
Standfield, Intangible Management
Lev, Intangibles: Management, Measurement, and
Smith, Valuation of Intellectual Property and
The Value Creation
(VCI) is a tool designed to quantify the link between an
organization's non-financial performance and its valuation in the markets.
Traditional methods of
assessing organizational performance are no longer adequate in today's
economy. Stock price is less and less determined by earnings or asset base.
Value Creation in today's companies is increasingly represented in the intangible
drivers like innovation, people, ideas, and brand.
non-financial factors for creating value are difficult to quantify, rarely acknowledged in
accounting methods, and are not adequately measured, managed or reported on
The Cap Gemini Ernst &
Young (CGE&Y) Center for Business Innovation (CBI) created a tool to
quantify the link between an organization's non-financial performance,
creating value and a firm's valuation in the markets. The VCI not only
quantifies the impact of non-financial performance on market value, but also
identify the specific intangibles that drive value for a given industry.
Models have been created for a number of industries including financial
services, airlines, pharmaceuticals, telecommunications, and others.
While the crucial
non-financial value drivers vary by industry, the value creation research team has settled
upon some critical categories of intangible performance that determine
corporate value creation:
More value creation methodologies