Earlier this month, key members of the Measuring Organizational Capital project met to discuss progress and outline future steps.
The team has designed several measures to quantify the competitive advantage of companies that have sustained large market shares over long periods of time. These industry-specific measures were derived by comparin
g the performance of companies in terms of sales growth and earnings to the resources they used such as human capital, tangible capital, R&D, and patents. The team then statistically identified and defined the remaining variable as organizational capital. Next, the team will use this measure to rank companies across several industries and survey those with exceptionally high organizational capital values to find out what they are doing systematically differently from their peers. Through this process, the team hopes to identify the triggers and drivers of organizational capital and to use this applied knowledge to help companies in both the private and public sector advance their performance.