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Intellectual Capital: The New Wealth of Organizations
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240 pages, Paperback
First published February 17, 1997
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Displaying 1 - 13 of 13 reviews
September 21, 2010
This book discusses the concept of intellectual capital and how it affects nearly everything we do. Stewart argues that today's economy is driven by companies who are able to acknowledge and leverage the knowledge capital that is traditionally left swinging in the breeze. There were lots of useful examples and anecdotes that elucidate Stewart's points.
The Information Age: Context
The first section provided background and history on the growth of intellectual capital as a defining part of the economy. Stewart talks about the information or knowledge economy as the step beyond the goods or services economy. This correlates with other discussions that suggest the next economy is one of "experience." The knowledge economy is coming because nearly every good and service is beginning to have "added value," or knowledge.
Stewart suggests that this context is leading to "the end of management as we know it." The mandate is no longer to make people do some boring, repetitive task. That is all handled by various automated systems. The manager must now guide knowledge workers along their paths and at the same time do some good for the company.
As firms hire increasing numbers of professionals, as professions spawn specialties, and as new technologies create work that requires esoteric knowledge, expertise becomes more balkanized and firms begin to resemble confederacies of occupations rather than sleek pyramids of control … When those in authority no longer comprehend the work of their subordinates, chains of command should cease to be viable for coordination. p. 49.
Intellectual Capital: Content
Accountants can't count intellectual capital. Actually, they can count patents, programs and other resources that are essentially recorded intelligence. They just can't accurately count the benefit of all those intangible assets. Stewart argues that we need to be careful about what we do count, since that is always the stuff that shows up in annual reports - and it is the thing that gets rewarded.
Attempting to come up with a definition of intelligence, Stewart devised this:
Intelligence becomes an asset when some useful order is created out of free-floating brainpower--that is, when it is given coherent form (a mailing list, a database, an agenda for a meeting, a description of a process); when it is captured in a way that allows it to be described, shared, and exploited; and when it can be deployed to do something that could not be done if it remained scattered around like so many coins in a gutter. Intellectual capital is packaged useful knowledge. p. 67
Stewart goes on to define several types of Intellectual Capital:
· Human - Our most important asset, really! These are the bodies in the shop who know how to do things and create stuff. Stewart reminds the readers that the valuable humans are those that are difficult to replace and add high value. All the others should be replace, outsourced or made more valuable.
· Structural - codified information and knowledge that is reusable in goods, patents, programs, etc. This might also include things like corporate yellow pages, competitor intelligence, lessons learned databases; anything, really, that is a codified (and searchable) form of information.
· Customer - an overlooked aspect of capital, but this counts for brand recognition, loyalty, alliances and many other aspects that bring value to a company.
Building all of these forms of capital are important to the new manager. Communities of practice are one of many ways to build human capital. "If you promote the people who do the best job of sharing, you don't need any other incentives." There is a huge possibility for growing customer capital - just look at the Wal-Mart model of electronic data exchange for ordering and stocking their stores.
Ten Principles for Managing Intellectual Capital, p. 163
1. Companies share ownership of customer & human capital.
2. Create human capital by fostering communities, teams and other social environments.
3. Manage & develop human capital by investing in the skills & talents that are proprietary and strategic.
4. Customers care least about structural capital, which happens to be easiest to control. Don't get in the way of the customer.
5. Just-in-time applies to knowledge as well. What you need should be there, and what you might need should be easy to get.
6. Can inexpensive intangibles do the work of costly physical assets?
7. Knowledge work is custom work.
8. What is the value stream of the company. Usually it is closest to the customer.
9. Focus on the flow of information, not materials.
10. All forms of IC work together. They must be all supported.
The Net: Connection
The focus of this section is on networking and how information flows change when everyone has access to the network (internet, intranet). Managers' jobs change, as do those of the intellectual talent. There is even a chapter on how one's career will be different in the information age. This is aimed at managers who no longer keep information to themselves - they are no longer the conduits for that information. Employees can simply get it off the corporate intranet. If not, they get it in e-mail from friends and competitors they know. This very much relates to the Cluetrain Manifesto.
"The scarce resource is ignorance." The ability to ignore the boring or uninteresting data and information is crucial. We are flooded with data, but we are not making sense of it. An understanding is more important that the numbers. p. 172
"In companies whose wealth is IC networks, rather than hierarchies, are the right organizational design." p. 182
Business plans need to move from Plan, Organize, Execute, Measure to Define, Nurture, Allocate (DNA). Indicating a more organic nature of knowledge and networks (p. 191). Define who we are and why we are in business. Nurture the intellectual capital. Allocate resources where and when they are needed.
The structure of a network or matrix organization is very flat. There is the strategist, resource-providers, project managers and talent. Maybe there are also process owners, but only a few. p 204
The Information Age: Context
The first section provided background and history on the growth of intellectual capital as a defining part of the economy. Stewart talks about the information or knowledge economy as the step beyond the goods or services economy. This correlates with other discussions that suggest the next economy is one of "experience." The knowledge economy is coming because nearly every good and service is beginning to have "added value," or knowledge.
Stewart suggests that this context is leading to "the end of management as we know it." The mandate is no longer to make people do some boring, repetitive task. That is all handled by various automated systems. The manager must now guide knowledge workers along their paths and at the same time do some good for the company.
As firms hire increasing numbers of professionals, as professions spawn specialties, and as new technologies create work that requires esoteric knowledge, expertise becomes more balkanized and firms begin to resemble confederacies of occupations rather than sleek pyramids of control … When those in authority no longer comprehend the work of their subordinates, chains of command should cease to be viable for coordination. p. 49.
Intellectual Capital: Content
Accountants can't count intellectual capital. Actually, they can count patents, programs and other resources that are essentially recorded intelligence. They just can't accurately count the benefit of all those intangible assets. Stewart argues that we need to be careful about what we do count, since that is always the stuff that shows up in annual reports - and it is the thing that gets rewarded.
Attempting to come up with a definition of intelligence, Stewart devised this:
Intelligence becomes an asset when some useful order is created out of free-floating brainpower--that is, when it is given coherent form (a mailing list, a database, an agenda for a meeting, a description of a process); when it is captured in a way that allows it to be described, shared, and exploited; and when it can be deployed to do something that could not be done if it remained scattered around like so many coins in a gutter. Intellectual capital is packaged useful knowledge. p. 67
Stewart goes on to define several types of Intellectual Capital:
· Human - Our most important asset, really! These are the bodies in the shop who know how to do things and create stuff. Stewart reminds the readers that the valuable humans are those that are difficult to replace and add high value. All the others should be replace, outsourced or made more valuable.
· Structural - codified information and knowledge that is reusable in goods, patents, programs, etc. This might also include things like corporate yellow pages, competitor intelligence, lessons learned databases; anything, really, that is a codified (and searchable) form of information.
· Customer - an overlooked aspect of capital, but this counts for brand recognition, loyalty, alliances and many other aspects that bring value to a company.
Building all of these forms of capital are important to the new manager. Communities of practice are one of many ways to build human capital. "If you promote the people who do the best job of sharing, you don't need any other incentives." There is a huge possibility for growing customer capital - just look at the Wal-Mart model of electronic data exchange for ordering and stocking their stores.
Ten Principles for Managing Intellectual Capital, p. 163
1. Companies share ownership of customer & human capital.
2. Create human capital by fostering communities, teams and other social environments.
3. Manage & develop human capital by investing in the skills & talents that are proprietary and strategic.
4. Customers care least about structural capital, which happens to be easiest to control. Don't get in the way of the customer.
5. Just-in-time applies to knowledge as well. What you need should be there, and what you might need should be easy to get.
6. Can inexpensive intangibles do the work of costly physical assets?
7. Knowledge work is custom work.
8. What is the value stream of the company. Usually it is closest to the customer.
9. Focus on the flow of information, not materials.
10. All forms of IC work together. They must be all supported.
The Net: Connection
The focus of this section is on networking and how information flows change when everyone has access to the network (internet, intranet). Managers' jobs change, as do those of the intellectual talent. There is even a chapter on how one's career will be different in the information age. This is aimed at managers who no longer keep information to themselves - they are no longer the conduits for that information. Employees can simply get it off the corporate intranet. If not, they get it in e-mail from friends and competitors they know. This very much relates to the Cluetrain Manifesto.
"The scarce resource is ignorance." The ability to ignore the boring or uninteresting data and information is crucial. We are flooded with data, but we are not making sense of it. An understanding is more important that the numbers. p. 172
"In companies whose wealth is IC networks, rather than hierarchies, are the right organizational design." p. 182
Business plans need to move from Plan, Organize, Execute, Measure to Define, Nurture, Allocate (DNA). Indicating a more organic nature of knowledge and networks (p. 191). Define who we are and why we are in business. Nurture the intellectual capital. Allocate resources where and when they are needed.
The structure of a network or matrix organization is very flat. There is the strategist, resource-providers, project managers and talent. Maybe there are also process owners, but only a few. p 204
August 25, 2015
This was really a thought provoking read. Parts are a little dated.
May 9, 2011
Read this for my Masters thesis - helped me a lot to understand the basics of IC. Info old but still a great base for anyone who wants a simple uncluttered basic understanding.
September 30, 2016
The book does a great job of describing the movement from asset based value to intellectual capital. It's a bit repetitive, but the idea is to explain how novel the idea really is and what the ideas of the past were. Since it was written in 1997, many people have already begun to change their thinking and whole generations are fully aware this is the case. This is particularly the case in finance, where the only assets are people. In it's time it was most likely far more revolutionary. For that reason, it stands as an interesting "historical" piece on just how fast the business world is changing.
July 8, 2010
A very "big picture" survey of trends in data and content management. Has a good chapter on "Your Career in the Information Age." First use of the term "Knowledge Worker."
April 30, 2020
A primer on the topic.
February 12, 2022
Read in 2022 so examples are dated although principles are sound and relatable to organisations.
May 5, 2011
Helpful framework for thinking about "Knowledge Management" -- more substance, less buzzwords
Examples cited may be somewhat dated now since this book was written in the mid to late-90s, but if you're looking for a starting point for how to think about managing the information or knowledge that's only tacitly floating around your organization, this book will be a good Step 1.
Reading a good summary of this book will probably be just as helpful as reading the book itself (and less time-consuming).
Examples cited may be somewhat dated now since this book was written in the mid to late-90s, but if you're looking for a starting point for how to think about managing the information or knowledge that's only tacitly floating around your organization, this book will be a good Step 1.
Reading a good summary of this book will probably be just as helpful as reading the book itself (and less time-consuming).
January 25, 2021
I probably should have read this in 2006 when I bought this copy but better late than never? Much of what Stewart discusses is not only still relevant today but something organizations continue to struggle with and need desperately to figure out. I‘m feeling a bit reinvigorated to head back to work after my Christmas break - so this book did its job.
January 25, 2013
I really enjoyed this read, it shows as the world / economies evolve how important independent thinking really is.
Read
October 18, 2014Comprado vía Amazon para practicar el inglés. Lo pondré de nuevo en la cabecera.
February 26, 2015
i need this book to finish my thesis
Read
June 8, 2017Provides good background on intellectual capital and what it means.
Displaying 1 - 13 of 13 reviews