How to manage your organisation’s intellectual capital
An organisation’s most valuable resource is its knowledge - an aspect of its intellectual capital. Knowledge can be tacit (embedded in the minds of employees and, therefore, difficult to manage) or explicit (expressed in some record from which it can be retrieved). Knowledge is a vital corporate resource, on which an organisation thrives and survives. Like any other resource, however, it needs to be managed and successful organisations have developed ways of doing so. We can learn fritsom their experience...
1. Understand what is meant by intellectual capital.
Intellectual capital (IC) is often confused with intellectual property (IP), but is a much broader concept. IC consists of all the intangible assets of your organisation - skills, general knowledge, technological leadership, and learning ability. Most IP relates to tangible assets - databases, for example - and intangibles such as trademarks, patents, and copyright.
You have two forms of intellectual capital: human and structural. Human capital is your employees; structural capital is what remains behind when all your employees go home - manuals, training materials, etc.
Knowledge is developed and transmitted by two different networks of people who interact: communities of practice (individuals and groups within your organisation that emerge around a discipline or problem) and networks of practice (peers from other companies, groups, and associations outside your organisation). The challenge is to develop, manage, and protect that knowledge by bringing people together across different structures, functions, and hierarchies.
2. Recognise knowledge as the basis of competitive advantage.
Properly managed, knowledge can provide a competitive advantage that might be expressed in doing things faster, cheaper, and better than your competitors. As CEO of General Electric, Jack Welch claimed that ‘releasing the ideas of our people is what we’ve got to do if we’re going to win.’ To understand the influence your organisation’s storehouse of knowledge has on your bottom line, you will need to:
- identify and evaluate the role of knowledge in the business you are in
- match the revenues with the knowledge assets that produce them
- develop a strategy for investing in and exploiting your intellectual assets.
3. Create the right environment where people want to be.
As part of your strategy you will need to build a corporate environment - a knowledge culture that fosters a desire for knowledge among your people, rewards their efforts and achievements, and ensures its continued creation, dissemination, and application. An appreciation of how communities of practice generate, refine, and disseminate ideas will help you to build a place where people want (choose) to be. Your efforts will be rewarded as you retain key people and attract others who want to be part of your team, and tap into your organisation’s intellectual resource and knowledge-creating capabilities.
To cultivate this situation, you will need to embrace a wide variety of activities such as cultivating creativity, fostering innovation, encouraging personal networks, providing mentoring, supporting appropriate training by experts in particular fields, overseeing the development of an infrastructure providing data networks and access to resources, participating in product development teams, and using job rotation and other strategies to provide opportunities for people to share data and work in close proximity to others engaged in similar endeavours.
