Intellectual Capital: The New Wealth of Organizations

Citation

Mann, S. (1999), "Intellectual Capital: The New Wealth of Organizations", Leadership & Organization Development Journal, Vol. 20 No. 6, pp. 337-340. https://doi.org/10.1108/lodj.1999.20.6.337.1

“Knowledge management”, the new Zeitgeist that is in danger of being regarded as merely another management fad, is the subject of Intellectual Capital, and the author makes no apologies for contributing to “fadism”. For knowledge, says Stewart, has become the most important factor in economic life and is the chief ingredient of what we buy and sell, “the raw material with which we work”. Intellectual capital rather than natural resources, machinery or even financial capital, is now the most indispensable asset of corporations and if this makes it a fad, then so be it. The problem with intellectual capital as a concept is that it is usually intangible; it is that knowledge of the workforce that is hard to identify and measure, but which can give an organisation an enormous competitive advantage. Intellectual Capital helps the reader identify and deploy these hidden assets so as to manage knowledge successfully.

The three sections of the book cover firstly the information age (introducing concepts such as the knowledge economy and the knowledge worker), secondly intellectual capital per se (including knowledge management) and finally the networking organisation (including focus on how the knowledge economy can influence the career of the reader and how to make the most of new opportunities). Throughout all the chapters, the reader learns how to discover and map the human capital, structural capital and customer capital that together embody the knowledge assets of a corporation, how the rise of the so‐called “knowledge worker” leads to new principles of managing people and, perhaps most importantly, how to collaborate with customers to build wealth together. Drawing on real‐life examples from organisations as diverse as General Electric, Hewlett‐Packard and Merck & Co, Stewart, who is an editor at Fortune magazine, demonstrates how successful companies manage their intellectual capital to improve performance.

However, the highlight of the text in my view is tucked away in the Appendix section; here, some 15 tools and techniques for measuring, mapping and managing intellectual capital are laid out and it is this practical and applied section that I feel will appeal most. Some techniques are inherently quantitative, such as “calculated intangible value” or Tobin’s “q”, but there are plenty of more qualitative approaches that will appeal to the less mathematically minded. For instance, employee attitude surveys, human capital surveys and customer satisfaction measures are all thought to contribute to an increasing control over intellectual capital.

Overall, however, this text is less of an applied book and more of a philosophical read aimed at changing the way managers think and lead. It is not the sort of text that can be dipped in and out of, it really must be read with some concentration – if only a few of the ideas and thoughts filter through, then the reader is certain to emerge with a new awareness and understanding of the important role of intellectual capital in today’s business environment.