Competitive Advantage
June 22, 2009
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Long gone are the days of reticence in the public display of knowledge. To the contrary, corporate strategy takes into account the technological trappings of the Information Age (see the Gates estate) have placed knowledge at a premium. Paparazzi-plagued computer programmers and $150,000 college degrees render the materials-oriented Industrial Age as obsolete as a decorously hidden pocket watch. In a world sliding toward Silicon Valley, time is not money, physical resources are not money—money itself, even, isn’t money. Knowledge is money, and knowledge is king. This is not unique to the sprawling IT industry. Every corner of the business strategy belongs to the knowledge culture. Every savvy strategic planner must learn to manage the world’s best wealth-creating resource—which happens to be almost inaccessible to traditional management.
Definitions
Two behemoth catchphrases—and industries in their own right—have grown from our obsession with knowledge. Each is central in
strategy management for any twenty-first-century enterprise.
Intellectual capital is “intellectual material that has been formalized, captured, and leveraged to produce a higher-valued asset,”i or “proprietary information and knowledge that lowers costs or increases customer value.”ii Intellectual capital, analogous to physical or structural capital, is any intellectual resource in your company that already is or could become an asset. This includes, but is certainly not limited to, employees’ personal knowledge; human-technology interfaces; databases; patents; archived information; and industry secrets.
Knowledge management is how intellectual capital is assessed, stored, maintained, and put to good use.
It begins as a mindset; it is first “the conceptualizing of an organization as an integrated knowledge system,” and then “the management of the organization for effective use of that knowledge” (emphasis added).iii Notice: knowledge management is management of the organization—not of the knowledge itself. It is not Orwellian invasiveness. It ystematically recognizes the personal nature of knowledge and encourages knowledgeable people to use their energies well. Next weeks we’ll continue with ‘Why intellectual capital’?
