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The Intellectual Property Management Stage

Skandia's IP Portfolio of Software Programs and Knowledge Recipes. Skandia refers to IP as "innovation capital."13 The 1998 report defines innovation capital as "intangible rights, trade­marks, patents, knowledge recipes and business secrets." A closer look reveals that copyright and ancillary trade secret protection is Skandia's primary form of IP and hence the source of sustain­able competitive advantage. Skandia's copyrights cover a huge number of software systems and applications that Skandia companies develop continuously to improve the way they do business, deliver solutions, and partner with customers. In many cases, these software programs are also offered as products or training packages to financial advisors. The other major copyrighted/trade-secreted product is what Skandia calls "knowledge recipes," which cover a wide range of pack­aged knowledge products offered to financial advisors to educate them about the market and make their job easier in finding the right solutions for their clients. The genius of Skandia's IPM program is identifying the IP that enabled Skandia to beat the competition to a number of mar­kets (competitive positioning) and create new business opportunities (commercialization) through offering its IP to partners.

IP and Core Competitive Advantage - The Prototype. One of the main success factors behind Skandia's exponential growth in a mature industry is its use of its main IP, the prototype software, for competitive positioning. The prototype software was developed at the early stages of Skandia AFS establishment and used to spin off new business units and enter new markets. The software captured Skandia's essential administrative and operational processes, including application pro­cessing and product pricing, into a business prototype. The prototype is then taken by any busi­ness unit and replicated to enter new markets, sometimes in less than half the time, giving years of head start to Skandia over the competition. An example is Skandia's use of the prototype to enter the Swiss, Russian, and Chinese markets. The prototype also saved Skandia millions in establishment costs, sometimes as much as a quarter of the cost, and hence enhancing Skandia's competitive advantage even further.

In addition to the prototype, Skandia's IP portfolio includes a number of computerized work systems that are leveraged both internally across Skandia and externally across the various partnerships.

Leveraging IP Internally - Sharing and the Technology Center. A software system that is developed in one of Skandia's companies or operating units is shared freely across the organiza­tion. Skandia's Technological Center (STC) acts as the central unit that provides coordination and streamlining of systems across Skandia and the Skandia Group. The STC conducts research on available technology solutions and makes its findings available to all operating units. At the same time, the STC provides support for units to develop their own new system(s), and to create prototypes that can be leveraged in other business units acting like the IP Synergy Unit (see Chapter 8).

An example of a software that is leveraged across many business units is the Electronic Quo­tation/Application system (EQA). EQA provides templates for various applications and forms and allows employees to provide quotations on initial customer contact. One of its most impor­tant features is the risk filter, which enables the user to determine whether the application needs further risk assessment or can be forwarded to the unit, hence simplifying what is otherwise a complex and lengthy process. The EQA led to reduction in administrative tasks, lower operating expenses, and speedy processing of customer applications. The EQA is used in the Savings Unit at Swedish Skandia Life, SkandiaLink and Foretagsliv.

Other software programs that are leveraged internally include those developed by DIAL for customer service and application processing, namely the Household Expert and the Motor Expert. The first offers claims settlement support and information, and the latter helps decision making as to fault determination, properly valuation, and calculation of losses.

Leveraging IP across Partnerships - Commercialization. In many instances, Skandia code-velops and shares its IP with its partners, whether fund managers or financial advisors. One example is SkandiaLeben's development of products for one of its customer banks which later were leveraged as the basis for more banking products. Most prominent is Skandia's offer of packaged knowledge products, which range from training material, market studies, competitive intelligence reports, and the like, to financial advisors. A lot of these products are offered to part­ner financial advisors for free to solidify the relationship and foster loyalty.

CONCLUSIONS ON SKANDIA

Being a service company in which the main product is packaged knowledge, the KM stage of Skandia's ICM model is the most robust. At the same time and similar to any learning organiza­tion in the knowledge economy, the IM stage was developed to a similar degree to enable value extraction from the value created at the KM stage. The IPM stage was developed to the extent that it enabled Skandia to preserve its competitive position and enhance the core competitive advan­tage of the various business units. It also was developed along the lines of Skandia's business model to leverage Skandia's IP across its various alliances and partnerships. The stress of the ICM model of an organization in a goods manufacturing industry, however, may be different. This is what we will explore by looking at another pioneer in ICM in the chemical industry - the Dow Chemical Company

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