Structural Capital Risks

August 15, 2011 by · Comments Off 

Structural Capital includes the huge range of knowledge that stays in your organization when everyone goes home at night (as such, it’s one of the answers to human capital risk of knowledge walking out the door).

Structural capital can take many forms. At one end of the spectrum is the formally recorded, legally protected knowledge in intellectual property (IP). Next is the knowledge included in software and formal process. Farther along, there is all the other knowledge residing in manuals, instructions, intranets and other written resources. Finally, at the other end of the spectrum from IP is the shared knowledge that is manifested in work patterns and culture which are shared and understood in the organization—but not necessarily written down.

The key risks associated with structural capital include the: Read more

IT Equals IC: Networks in the Organization

August 13, 2010 by · Comments Off 

In my past couple posts, I have been talking about mapping networks as the new organization chart.

The concept of networks in the organization is not new. Human beings have always found ways to connect with each other through tribes, associations, work groups and many other types of networks. What is new is the speed and ease with which networks can be formed thanks to information technology (IT). It can be hard to separate the history of the technologies that have enabled the growth and capture of knowledge from the knowledge itself. Nowhere is this relationship more clear than with networks. IT helps us create powerful connections between people and organizations. And these connections, these relationships take on a life of their own. Read more

Intangibles Are the New Raw Materials

June 15, 2010 by · 1 Comment 


Raw Materials
In the tangible economy, raw materials are combined and sometimes transformed to make finished goods. It is often impossible to see the different raw materials in the finished product—together, they make something completely new. In fact, there is often a progression of processes that lead to a final product. Stalks of wheat, for example, are processed and ground to make flour which then goes into making bread. Grains of sand become silicon in computer chips and oil becomes a high tech plastic.

The raw materials of the knowledge era are knowledge-based intangibles. You may be nodding your head as you read this. But do you really know what it means? If not, you are not alone. Knowledge continues to be seen as an amorphous, misunderstood part of business. This widespread ignorance isn’t helped by the vocabulary. The word intangibles itself is troubling because its very definition implies that an intangible is invisible, untouchable, and unknowable. The word knowledge is also very general and lacks a specific connotation for business value creation. Yet knowledge is the core asset of this century. Read more

IT Management is Really IC Management

January 5, 2010 by · Comments Off 

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

CIO’s–and CFO’s–Need to “Get Real”

November 5, 2009 by · 2 Comments 

two-c-guys-and-a-computerThere is an interesting report at CFO.com called CFOs to CIOs: Get Real.

My response is that CFO’s need to “get real” too.

One of the biggest barriers between CFO’s and CIO’s is how they view the cost of projects. CFO’s are trapped inside an accounting model that expenses a lot of investments. Recent macro data suggested that US businesses spent $1.7 trillion on intangibles versus $1.2 on tangibles. For the most part, intangibles get expensed, tangibles get capitalized. Many  of these intangibles are related to IT-enabled systems and/or processes. Read more

How can we use IT to optimize our Intellectual Capital?

June 17, 2009 by · 1 Comment 

enter button from computerI received a call the other day from the administrator of a good-sized Sharepoint implementation. He had actually fielded a number of requests from managers in his organization about how to use IT to optimize IC.

Wow. I love questions like that, especially since I have had a category on this blog since last year called IT=IC. They were thinking in terms of knowledge management. I think that’s a great place to start but doesn’t get to the most exciting part. That’s because knowledge in itself is not that big a deal. Read more

IT and the Building of Intellectual Capital–Are You Ready?

April 13, 2009 by · Comments Off 

I was inspired by a great post here from IT Business Alignment blog that talked about the need for IT to focus on business, not technology.

In drafting my comment, I came upon  an analogy between building intellectual capital and building a house. IT often is treated (and acts) as a specialty contractor–creating the plumbing, the wiring and the foundation. I started thinking. What is really needed is a general contractor (GC), someone that coordinates all the pieces to make sure it is an integrated whole. Is that the role of IT? I think so. They have to make the pieces fit together, to coordinate it all.

Read more

Getting Paid for Intangibles

October 16, 2008 by · Comments Off 

Interesting look by Lucent-Alcatel here at “Business Transformation: Advanced Business Models for Converged Communications.” You don’t have to be in the communications business to find this article inspiring. They are making the case to companies that have traditionally built their businesses off the sale of “tangible” communication networks that they need to expand their revenue activities into intangibles. This is a shift that technology and product companies throughout the economy are making with increased frequency. It’s also a great illustration of how IT and IC have become so tightly intertwined in many companies.

The list of options includes services, asset sharing, outsourcing, advertising, fulfillment and community building, among others. This list could help you think about new revenue options in your own business. It’s also interesting to note that the last section of the piece highlights Lucent-Alcatel’s consulting services to help their equipment customers–a good example of how L-A has adapted their own revenue strategy to market needs and opportunties.