Project Selection Directed by Intellectual Capital Scorecards

Management of intellectual capital is an important issue in knowledge intensive organizations. Part of this is the composition of the optimal project portfolio the organization will carry out in the future. Standard methods that guide this process mostly focus on project selection on the basis of expected returns. However, in many cases other strategic factors should be considered in their interdependence such as customer satisfaction, reputation, and development of core competences. In this paper we present a tool for the selection of a project portfolio, explicitly taking into account the balancing of these strategic factors. The point of departure is the intellectual capital scorecard in which the indicators are periodically measured against a target; the scores constitute the input of a programming model. From the optimal portfolio computed, objectives for management can be derived. The method is illustrated in the case of R&D departments