Intellectual Capital: The New Wealth of Organization

by Thomas A. Stewart

Book Overview

Knowledge has become the most important factor in economic life.??It is the chief ingredient of what we buy and sell, the raw material with which we work. Intellectual capital--not natural resources,... This description may be from another edition of this product.

• Format: Paperback
• Language: English
• ISBN: 0385483813
• ISBN13: 9780385483810
• Release Date: December 1998
• Publisher: Crown Business
• Length: 320 Pages
• Weight: 0.68 lbs.
• Dimensions: 0.8" x 5.5" x 8.3"

Customer Reviews

Ref A for Buidling Value in the Information Age

I read the same author's The Wealth of Knowledge: Intellectual Capital and the Twenty-first Century Organization first, and then went back to get this earlier book (1998), and I actually feel that reading them in that order is better. This book has a lot of detail that is well served by the context that can be found in the later book. For those who really wish to get a deep look at the future of building value in the age of distribution information in all languages, I recommend that both of Stewart's books be read in conjunction with the following three Nobel-level books: Margaret Wheatley, Leadership and the New Science: Discovering Order in a Chaotic World Robert Buckman, Building a Knowledge-Driven Organization and Christensen & Raynor, The Innovator's Dilemma: The Revolutionary Book that Will Change the Way You Do Business (Collins Business Essentials) My reviews of these books are both evaluative and summative, and could be helpful as short-cut, but they are no substitute for actually buying and reading the books. The most important point in this book is that the value is no longer found in collecting just in case knowledge, but rather in connecting dots to dots, dots to people, and (the highest value) people to people. It's about connecting, not collecting. Based on this book I drew my own value triangle, VALUE appearing in the middle of the triangle, with Context being the lower left corer, Content being the lower right corner, and CONNECTION being the apex of the triangle--further refined as connecting customers, connecting contributing talents, and connecting sub-contracted sources, softwares, and services. No one is doing this today in the manner that meets the emerging needs of the marketplace. Most interesting to me is the author's early emphasis on the Chief Financial Officer being the point of sale, not the CEO, the CTO, or the production divisions. Intellectual capital is a value-creation and profit-building exercise, and it needs to be presented as a financial campaign plan, not a technology plan, not a human resources plan, and not a sales and marketing plan. Although the author focuses on intellectual property, and provides compelling anecdotes and links that suggest that any company in the knowledge business can increase its bottom line earnings by 20-40% if it does a better job of managing its intellectual property, I see two other emerging marketplaces in this book that the author may not have intended but certainly contributes insights to: managing shared access to external sources, to reduce the cost and increase the knowledge that companies can use to increase their competence in a global environment; and managing customer understanding and relationships in the aggregate--it is possible to take cross-selling to new heights if companies in different industries that are not competing with one another, will share customer information in new ways, thus leading to the invention of new3 offerings and new value. A major po

Intellectual Capital : No Longer A Blurred Term

It is my great pleasure to write a review for this important book. Over past years a lot of book investigating "the value of human resource as a competitive advantage" in organizations was published but none of them explained us what human resource and value mean in the larger context of competition, what are practical ways to use of this very competitive resource on behalf of the organization. I herald that this book gives the absolute framework we need for a new and comprehensive study on intellectual capital.According to Stewart, Intellectual Capital is consisted of three interconnected parts, namely, Human Capital, Structural Capital and Customer Capital. Human Capital means the knowledge and skill level of corporate personnel. If an organization has a personnel inventory whose knowledge and skills are vital in the long-run, the first part of the capital forms a strong base to capitalize on. The other part of Intellectual capital, Customer Capital, means that organization is producing value for its customers and accordingly custemers have a strong loyalty to the company. The last part of Intellectual capital is Structural capital which connects Human Capital and Customer Capital to each other. Organizations need structural systems to use human resource in order to meet customers' needs and wants in a more effective way which other companies can not imitate without incurring high costs and time loss.You will find a lot of living examples intended to make these abstract concepts understandable to readers who are accomodated to hear many pop-ups regarding human capital and its value. Overall, I strongly recommend with five stars.

Harnessing Barinpower

Tom Stewart gives a concrete shape to the wishy washy waorld of Knowledge Management, Organisational Learning and Intellectual capital. Written with the passion of an evangelist and the style of a novel, the book always keeps you nodding your head. Stewart demonstrates how the traditional accounting system and management processes do not take into account the most important things in the company, human capital, structural capital and customer capital.He dedicates sections to the three and shows us the way truly "new economy" companies value and invest in them.A must read for the manager and the employee (not that there is much difference these days!)The scary part is the section on human capital and the realisation that you could be "redundant" and "non-value adding" to your company without any fault of yours.Read the book. It's a must!!

The Profit Zone Between the Ears

Stewart divides his book into three parts supplemented by an afterword and appendix. He examines The Information Age: Context, Intellectual Capital: Content, and The Next Connection. He attempts to "make sense of the dramatically changing world in which we work" by focusing on three separate but related components of the Information Age: Human Capital ("the capabilities of individuals required to provide solutions to customers"), Structural Capital ("the organizational abilities of the organization to meet market requirements...to codify bodies of knowledge that can be transferred, to preserve the recipes that might otherwise be lost"...and "to connect people to data, experts, and expertise -- including bodies of knowledge -- on a just-in-time basis"), and Customer Capital ("the value of an organization's relationships with whom it does business"). Of the three, Stewart considers customer capital "the most obviously valuable" and yet customer capital "is probably-- and startingly when you think about it -- the worst managed of all intangible assets."One of the most important chapters is Chapter 5. "The Treasure Map" contains information which can prove far more valuable to a company than any gold buried by pirates in the Caribbean. As with that gold, however, intellectual capital must first be appreciated; located and recovered; and then organized and managed with meticulous care. Hence the importance of Chapter 9 in which Stewart offers ten principles for managing intellectual capital. Hence the importance, also, of the Appendix in which he provides all the other "tools" needed. Let the digging begin!

Stewart demonstrates he has intellectual capital too

Knowledge is the currency of the information age. The sudden ubiquity of information technology is considered by the author to be the biggest story of our time (p. xvii). He may just be right; and while information is not alone sufficient to constitute knowledge, this discussion goes way beyond the current platitudes of transforming data into information and, in turn, into knowledge. The author considers such arbitrary distinctions a tar baby (p. 71), a place to get stuck. He implies (but does not explicitly state) that knowledge is constituted by bringing a framework, structure, organization to experience, what is called "content" in the age of internet computing. Such knowledge includes the expertise that grows up in a community of practicing experts around a task, person, or organization as well as the tools (networks and databases) that augment that knowledge (p. 71). For example, in the knowledge economy the flow of information is as important as the flow of good and services and, to some extent, interchangeable. The inventory of goods required to be ready to hand to address customer purchases can be reduced by an accurate inventory demand forecasting system in a victory of information over inventory (p. 26). Physical assets are being replaced by the networks and databases -- structural knowledge capital -- in the generation of economic value. Information technology has an essential facilitating and enabling role to play in each of the three forms of knowledge capital identified and discussed by Stewart. To this reader, though perhaps not to many business and technology managers, the first kind -- human knowledge capital -- is the least interesting of knowledge assets. Round up and insert here all the usual suspects in stories of dumb companies that try to treat their workers like interchangeable cogs in a mechanisms. Compare these with smart companies that promote employee stock ownership, empowerment, and professional development. The dilemma remains the same. If the employee leaves, so does his or her ability to solve problems for the organization. True, you can make a persons miserable with legal documents and corporation counsels;what you can't do is make them loyal that way. The author's original insight here is that the loyalty is often to the community of practice -- professional organizations of knowledge workers (network specialists, database specialists, etc., by analogy with doctors and lawyers). Really smart companies create communities of practice as knolwedge exchanges, technical advisory groups, and writing workshops. More significant is structural knowledge capital. The framework for this is information technology. The example of the inventory system substituting for product on hand on the floor of the warehouse belongs here. Also included are various ways of bundling information with products -- as when the documentation accompanies the product on a CD ROM disk