How to Manage Your Intellectual Capital
When organizations find better ways to manage their knowledge assets - which are contained in their patents, copyrights and databases, as well as the skills, capabilities and expertise of workers - they can save bundles of money and gain competitive advantage. In The Wealth of Knowledge: Intellectual Capital and the Twenty-First Century Organization, Thomas A. Stewart, a member of the Board of Editors of Fortune magazine and author of the 1997 bestseller Intellectual Capital, addresses numerous ways that companies can interpret and apply the concept of intellectual capital to their daily operations to become more successful.
In Intellectual Capital, Stewart outlined the importance and ramifications of knowledge assets. Now he offers a way to "set forth practical means to put into practice these important and exciting ideas."
Seeds of Wealth and Value
In the first part of his book, Stewart describes in detail why knowledge is so important to economies and companies, and provides sound business reasons to embrace the concept and take action. In so doing, he tells his readers exactly what knowledge assets are and how they can become the seeds of wealth and value. Throughout this section, he demonstrates how e-business and knowledge management can be done correctly and incorrectly using many practical examples from the business world.
The second part of his book offer a four-step guide to application of knowledge management concepts to modern business, and delivers strategies necessary for organizations to use when investing in intellectual capital and competing with others.
Managing intellectual capital entails the following:
- Identify and evaluate the role of knowledge in your business - as input, process and output. Learn more about your business and its use of knowledge by finding out who gets paid for knowledge, who pays, how much is being paid, and who creates the most value.
- Match the revenues you've just found with the knowledge assets that produce them. Find out how much value the organization is getting from its expertise, capabilities, brands, intellectual properties, processes and other intellectual capital.
- Develop a strategy for investing in and exploiting your intellectual assets. To do this, companies will need to determine their value proposition (what they know that they can sell, and how to sell it for a profit), source of control and profit model, as well as current strategies for increasing their knowledge intensity. Looking for ways to leverage or restructure intellectual assets will help.
- Improve the efficiency of knowledge work and knowledge workers. Remember that knowledge work does not necessarily follow the linear path that traditional labor follows, and look at ways to increase the productivity of knowledge workers.
The last part of his book ventures into the deeper questions about business in general: Why do companies exist? How should they be organized? Who is investing? How should they be rewarded? In the expanding global economy, Stewart says knowledge assets become the glue that holds an organization together. To make the most of them, measurements will be necessary, and the latest methods for monitoring and measuring intellectual capital are discussed, and traditional accounting is thrown to the wind.
Why Soundview Likes This Book
Filled with an amazing number of sources that develop and support his strategies, The Wealth of Knowledge delivers an abundance of relevant stories and practical advice. Organizations improve performance when they find more effective ways to manage knowledge, and Stewart's words of wisdom offer a sound perspective on business that values and makes the most of human systems. By reminding companies of the human element, his work brings businesses closer to better performance, responsiveness, and their ability to face the challenges of the future.