What's New
CFO Magazine published my comments on reputation
In the September issue of CFO a comment by Intangible Capital author, Mary Adams:Prevention Is the Best Approach It’s important to understand how damaging reputational crises can be (”What’s a Reputation Worth?” May). But the real story is how to prevent them. Seventy percent... [Read more...]
Why Innovation in the Knowledge Era Will Change Everything
In my recent post about innovation ecosystems, you may have noticed two of my introductory slides about the knowledge era and innovation. I’d like to expand on that here.
This graph is taken from PBS’ The First Measured Century (a fun resource if you have never seen it). It’s a snapshot of employment trends (of men only) in the 20th century, the story of which was clearly dominated by the industrial era. [Read more...]
6 principles of management in the knowledge era
We often use the image of a “knowledge factory” to talk about the infrastructure of the today’s business. A huge percentage of this infrastructure is in intangible knowledge assets that work together as a system, the knowledge factory. Once you begin to understand the power of the combination of your knowledge assets, you are on your way to becoming building a smarter company–and you are ready to think about what this model means.
What are the business implications of the knowledge factory? These principles explain why management of a knowledge factory is different than management of a physical factory. Here are the main points, followed by an explanation of each:
- The KF is greater than the sum of its parts
- Ownership of the KF is dispersed
- Power in the KF flows down…and up
- The KF is held together by reputation, not control
- The KF runs on information technology
- The KF is a business
Let’s stop guessing and start counting intangible investments
I just posted a comment on an IAM blog post about Intangible Value and the Herd Instinct. It cited Nir Kossovsky, my colleague from IAFS, as saying that the S&P 500 has a larger intangible premium than the average of all western stock markets due to a market perception of better value from that market.
Here’s my comment: [Read more...]
IT Management is Really IC Management
The KNOW Network just declared IT Departments Fail to Deliver Value based on a global survey of IT executives by Axios Systems. Here are a few of the data points they cite:
- 57% believe their systems do not deliver the value expected by the business
- 64% are unable to provide the business with real-time quantifiable metrics demonstrating the value of their services
- 39% believe that business decision-makers still do not understand the value IT brings to the business.
The reason that IT management is so hard is that it is so closely tied to IC management. And companies are doing an even worse job with IC than they are with IT. [Read more...]
Orchestration Is New Command and Control
In the tangible economy, mechanization and mass production drove huge productivity gains as manufactured goods replaced those made by hand. These efficiencies came through strict discipline. Managers could describe to their employees in great detail the smartest way to accomplish their work: “Take Part A, attach these two screws then join Part A to Part B.” Through time and motion studies, the fastest and most efficient way to do things could be identified. To achieve these results, employees had to adhere to strict guidelines. In such an organization, decision-making was an activity that resided with management. Like military commanders, the word of managers was the guide for corporate action. This was a classic command and control model.
But in today’s world, your company is really a series of networks. These networks include both internal and external players. Knowledge is dispersed throughout the network—it is not concentrated in the managerial class. And the organization needs that knowledge to succeed. This means that a traditional hierarchical approach where knowledge and power flow from the top down will not get you the results you need. To describe this model, we borrow the image of orchestration from Peter Drucker. [Read more...]
