Modelling the IC of Google’s search business

Google’s search business is a great example of a knowledge factory. While it is driven by highly complex math, the business model developed a decade ago is very simple. It all started with the competencies of two computer science graduate students at Stanford, Sergey Brin and Larry Page. The year was 1995. Page was looking for a thesis topic and was intrigued by the emerging “World Wide Web.” He saw it as a math problem. Brin got involved and by 1998, they had launched Google.

Here’s the story told through the construction of a model of this knowledge factory using Legos.  Read more

Relationship Capital, Starting With Your Customers

As with human capital, relationship capital has always been a part of business.

Organizations have always had customers, vendors and financing partners, to name a few. But the nature of these relationships has been changing more dramatically in recent years. First of all, networking technology has made it easier to outsource pieces of a business that were formerly inside the corporation. The relationships with critical outsourcing partners are closer than that of arms-length client-vendor relationships.

You may find yourself on both sides of this dynamic, performing outsourced services for your customers but also outsourcing some of your internal processes to a vendor. Read more

The Dilemma (and Power) of Free

In recent days, I have focused on getting paid for what you know. But, of course, there is another big story in the knowledge economy—one that is still being written. Basically, one of the challenging truths of the knowledge economy is that you will end up giving away a lot of your knowledge.

Google’s search business is the simplest but most dramatic example of this. Their search business yields $20+ billion in advertising revenues each year. But the core product, the search itself, is free. This means that Google gives away huge amounts of value every day and still has managed to become one of the leading companies of the knowledge era thus far.

Another great example is the Grateful Dead. Read more

Why Should You Model Your Intellectual Capital?

In my last post, I shared a video that I recently posted on YouTube called You Can Grow Like Google. It uses Legos to build a model of Google’s intellectual capital “factory,” in an effort to illustrate how the distinct pieces of IC–human, relationship and structural capital–fit together to create a cohesive system that works together to create value.

You can download a worksheet to make your own model:  Want to Grow Like Google? …Build a Knowledge Factory. I hope you find the process fun and informative. I think that the act of identifying the critical components and fitting them together is a valuable exercise in itself. But I don’t recommend this just because it’s fun. I recommend that you build a model of your intellectual capital because the future of your business is dependent on intangible knowledge assets.  Read more

You Can Grow Like Google (start with a knowledge factory)

In a few recent presentations that I have posted on the internet, I have included some slides that show the method that we have been using to model the knowledge side of our clients’ businesses using Lego’s. A number of people have written to me asking for a narrated version so I finally made the leap to YouTube.

You can view the You Can Grow Like Google video at YouTube and download the companion white paper Want to Grow Like Google.

Let me know if this is helpful to you. Share your own knowledge factory models. And, if it is helpful, please share this with colleagues whose companies need a boost to power out of this recession. I hope to hear some feedback on this one!

Intellectual Capital Advice from Google’s Larry Page

In Larry Page’s commencement speech at the University of Michigan, he shares a lot of personal stories and also includes a gem about intellectual capital. The personal stories include his family’s connections to Michigan and a tribute to his Dad who was a professor there. He is an amazingly unassuming person. You won’t regret listening to the address.

What I want to talk about was one of his bits of advice at the end of his talk:

Technology and especially the internet can really help you be lazy. Read more

Starting Today

Today seems like a good time to talk about the future. Yesterday, the United States elected a new president, Barack Obama. For months we have talked about the challenges that face our nation. Success is not guaranteed for our nation or our business community. We need to up the odds and strengthen the companies that form the foundation of our national economy. Starting today.

Where does the strength of our companies come from? Read more

The New Kapital

I’ve seen a number of interesting discussions recently on the role of human capital in business. It is interesting to contrast these varied views of the role of experts versus mainstream employees–and the implications for leadership, compensation and profits:

The first is Roger Martin’s article entitled “Capital vs. Talent: The Battle Rages On” in the latest magazine from the Rotman School of Management Read more