Andriessen contends that using IC models that classify capital into generic forms that are appli­cable to all organizations, makes all organizations look the same and hence, does not enable strategic planning based on the unique and different combinations of IC that a particular organization has. Andriessen prefers to classify IC as a unique bundle of intangible assets that make up a core competency, where an organization usually has somewhere between 8 and 10 competencies.

According to this classification model, a core competency is made up of the following forms of IC—processes, employee skills and tacit knowledge, organizational endowments, collective values, technology, and explicit knowledge. Endowments include what the organization inherits from the past, including brand image, networks of suppliers, and customers. Value creation under this model depends on the flow of IC in relation to each of the organization's core competencies. The strength of a core competency is assessed according to five criteria. These criteria assess the value a core competency adds to customers, the competitive edge it gives an organization, the future potential it has, the number of years it can be sustained by creating entry barriers, and how firmly it is anchored in the organization.12

Andriessen's model enables an organization to see IC more as a group instead of individual separate units, or, in his words, "to see the forest, not the trees." Again, one wonders if it gives more than general guidance as to the way IC should be managed for value creation. Like the value platform and Skandia's Navigator, the core competency model asserts that value creation is the result of the combination and interaction of the various forms of IC.

Further analysis of the IC and core competency models' view of value creation reveals that they are polarized approaches. While the IC models focus on separating the individual forms of IC to determine the effect of investing in one form over the other in the value creation cycle, the core competency model suggests the various IC forms should be managed as one cluster. Value is created not through transfer between the generic forms of IC but such transfer that occurs in the context of a core competency. Thus, the focus of this model is on unifying the various forms of IC under a common core competency, where the degree of value creation is measured as the resultant strength of the competency as a whole.

Though the IC models' approach may seem divisive, they serve to provide insight into the potential value that each form of IC contributes to an organization. They offer a generic approach to the classification of IC, identifying the genre of each form of IC and its unique features and needs. Classification is based on the source of the IC. Expertise, attitude, and creativity come from the human mind and psyche, and thus are grouped under human capital. Any intangibles that originate from interaction with the market and customers are grouped under customer, external, or relational capital. Finally, those developed or owned by the organization as part of its operations and processes are grouped under structural, organizational, or internal capital.

Such systems allow management to focus ICM practices and address the development of each form of intellectual capital. But the question remains as to how to invest in human capital, customer capital, and structural capital to create value for the whole organization? The IC models are too vague to guide management as to the objectives they should aim for in managing each form of IC. While the models inform management that competitive performance is dependent on the development of IC, when it comes to how, it offers merely broad terms and generalizations. Satisfy your employees and customers, transfer human knowledge into structural/organizational knowledge, and your organization's profits will increase. Such vagueness may explain why skepticism surrounds the IC model.

The core competency model appears to be more attractive since it implies that IC should be developed in the context of the whole. The stronger the competency becomes, the more likely it is that the organization is effectively leveraging the underlying IC. As the core competency model points out, the strength of an organization's IC lies in its unique combination of IC to form a core competency and not in having strong forms of IC per se. From this premise, to effectively manage IC, the various forms must be observed in action.

A core competency may include each of the various identified forms of IC, but they are developed by the organization as a bundle of assets relating to one core competency. As a bundle, it may make it easier for organizations to identify their IC and define their management objectives under a strategy of developing specific core competencies. Despite the clarity that this model offers, it risks hindering the natural or organic development of IC to the extent of limiting the potential of growth and value creation stored in it. For this reason, the core competencies model focuses on the development of structured, defined core competencies instead of developing IC forms as an organizational resource that could give birth to new noncore businesses.

To clarify this point, consider an organization that sees itself as an innovator, not in particular core areas, but in all areas. As in the examples of Xerox and Apple, and Lucent and Intel, a narrow focus on core business caused Xerox and Lucent to miss out on financially lucrative opportunities. What if an organization wants to allow development in noncore areas even though it does not intend to solidify the underlying IC into any of its core competencies? Organizations that adopt this strategy as one of their growth strategies have reaped great benefits as a result. One outstanding example is found in IBM.

Over the years, IBM has developed numerous noncore technologies and subsequently offered them for licensing. As a result, IBM generated over $1.5 billion in revenue from annual licensing fees. IBM's strategy may not be the ideal strategy for other organizations, but it is certainly one of the most important strategies of the knowledge economy. It is a strategy behind the success of 3M, Intel, Lucent, Xerox, and others. A strong focus on core competencies in total disregard to other capabilities that an organization's IC may enable it to develop is to waste and undercapital­ize the intellectual resources of the organization.

Both approaches, however, are useful when it comes to recognizing where to find IC in the organization and what to call it, and thus serve the conceptual context. When it comes to the operational context, however, the IC model offers only general guidelines as to management of IC, while the core competencies model limits what management can do in developing IC. A classification model for IC defeats its purpose if it does not provide clear objectives for ICM and how to achieve them. Classification is but an artificial grouping, and when it comes to IC, it should enable their effective management. The real question, therefore, is to what extent do these models enable effective management of intellectual capital? Hence the "so what?" test.

The recognition of IC under any model serves to create enterprise-wide awareness of the importance of IC in sustaining the present and future competitive performance of a business. Proponents of IC models singlehandedly established and advanced the field of ICM by providing a conceptual context that enabled us to see and understand the underlying invisible assets of an organization. Understanding and awareness alone can improve the innovative power of an organization.

For one thing, the invisible asset is now visible, and management decisions to invest in it will not be viewed with extreme skepticism or utter cynicism. Once recognized, returns from investing in IC can be monitored. Intellectual property has long been recognized for its business value from goodwill built with customers to royalty income and entry barriers constructed by IP that bar the path of competitors. Yet other forms of IC have not proven their worth as much as IP has. The IC models have advanced our ability to appreciate the value of the more hidden or softer forms of IC.

However, when it comes to creating an operational context, something more is needed. What is needed is a measurement system that enables management to monitor the effects of IC-related activities in creating value for the organization. To manage is to measure, and no management system can be effective without some measures that provide insight into the outcome of management's efforts. Managers need a methodological way to determine whether IC programs, practices, and systems are working and how well they are working.