What to Do With it Now
The true beauty of intellectual capital management lies in its implementation. First and foremost, recognize that—unlike structural, physical, and monetary capital—intellectual capital is people-dependent. Brook Manville and Nathaniel Foote note that “executing a knowledge-based strategy is not about managing knowledge; it’s about nurturing people with knowledge.”[i] The first step toward “nurturing” management is trust of employees and of their knowledge-building practices. Encourage collaboration and group innovation among employees. In order to make this work (among humans, who tend toward selfish hoarding), create a culture of sharing, not of competition. Knowledge silos are deadly:
Knowledge, unlike information, grows healthily only when it is debated, massaged, and passed around.
Stewart’s basic intellectual capital policy closely mirrors Strategy International’s fundamental strategic concept. Stewart encourages executives to DNA:1
- Define. Why does your business exist? (See the white paper “Strategic Navigation” for descriptions of purpose, mission, and vision, which together comprise a business’s self-definition.)
- Nurture. What intellectual resources are necessary to fulfill that definition? To whom do these resources belong, and how do those people best use their talents? What ensures an innovation-friendly environment?
- Allocate. Where should resources be funneled for the greatest innovation and new knowledge generation? How can knowledgeable people be managed well?
Like anything, intellectual capital is fragile; it is by no means a panacea. The dot.com implosion perfectly illustrates the need to combine this new resource with extant ones—to ensure teamwork among intellectual capital and structural, physical, monetary, and relationship capital. The key is to make the most of your company’s every facet, without needless and ineffective overlap. Allow people to do what they do best and technology to do its job, as well. Yogesh Malhotra of Brint.com explains this idea:[ii]
“Knowledge management caters to the critical issues of organizational adaptation, survival, and competence in the face of increasingly discontinuous environmental change. Essentially, it embodies organizational processes that seek synergistic combination of data and information-processing capacity of information technologies, and the creative and innovative capacity of human beings.”
The strategic planner of the future will create competitive strategy through strategic planning that uses this “creative and innovative capacity” that too often hides untapped, even unnoticed, by otherwise brilliant and successful companies. Experience has shown, though, that true business brilliance is a dazzling, eminently flagrant display of knowledge, creativity, and innovation.
[i] Brook Manville and Nathaniel Foote, “Strategy as if Knowledge Mattered,” Fast Company (2: 1996). https://www.fastcompany.com/26696/strategy-if-knowledge-mattered