How Many Workers Are Knowledge Workers?

The change in the American workforce has been evolving slowly over the past century. Over this time, the dominant jobs have shifted from materials extraction and processing to information processing. The trend was constant and consistent over the century for the primary and tertiary sectors. The secondary sector actually peaked at 50% in 1960 and then trended back down to end the century where it started. The following chart is from PBS The First Measured Century (a fun book and website). Read more

Program on Intangible Capital Sept 30, 2010

The Exit Planner’s Guide to Increasing Corporate Value:
How to become an intangible capitalist

Mary Adams will be appearing at a breakfast meeting of the Boston Exit Planning Exchange (XPX) on September 30 at Babson College. The focus of her talk will be:

Today, roughly 75% of the value of the average private business is intangible—invisible
in financial statements and not well understood, even by those inside
the organization. Exit Planners, like their clients, are handicapped by
their business education and tools, which were optimized for the
factories of the industrial era. To maximize the value of a business,
you need new tools that focus on intangibles.

 What does Intangible Capital mean to the advisors of business owners?

• Corporate and M&A Attorneys have new challenges when documenting and protecting their clients.
• Consultants focus on value for clients need the tools to zero in on and improve performance and corporate value.
• Investment Bankers and Business Brokers want to
  present their clients in the best light possible so they must understand
  and explain the key intangibles driving corporate value to potential
  partners and acquirers.
• Financial Advisors who want to better understand
  their client’s business need to gain a whole new vocabulary around the
  strength and sustainability of the business and why.
• CPAs need to embrace these new concepts to help plan for, track and measure investments and returns on intangible capital.

Get more information and register.

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

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 of the value of the average company is intangible. This is because processes, knowledge, and networks (all considered intangible by accountants) are the core drivers of competitive success — and reputation.

Managing reputation starts with managing these intangibles. That’s why we say reputation is the new bottom line.

Mary Adams
Founder and Principal
I-Capital Advisors
Winchester, Massachusetts

 

Networks: A Question of Control

As with so many other aspects of knowledge assets, there are both bottom-up and top-down aspects to networks. There are many who study networks that see them as analogous to self-organizing, living systems that occur in nature. If you believe this, then you believe that organizations can organize themselves. There is a lot of truth to this and it makes sense to dig in, using the approaches we outline above to understand how a network is working organically so that interventions are effective. But it is unrealistic to believe that businesses will become completely self-organizing in our lifetimes, if ever. Read more

Mapping Personal Networks

Another way to approach network analysis within your intangible capital knowledge factory is to zoom down to the level of individual workers.

One of the common ways of using this kind of map is to identify and find patterns in the interaction between groups of employees and/or groups of external people. This kind of analysis can be used to identify critical sources of knowledge, the “go-to” people to find information or solve problems. It can also be used to understand the knowledge exchanges that happen—who helps connect people together, who helps solve problems and those with specialized knowledge.
Read more

Use Value Network maps to understand how your organization works from the bottom up

We usually look at organizational networks at three levels. The first (described as a knowledge factory) is at a strategic level, built on the high-level inventory of an organization’s intangible capital. Today, I’ll talk about the next takes the perspective of the knowledge factory down one more level of detail (third perspective, personal networks comes tomorrow).

This perspective looks at the roles people play in your organization. This is the Value Network methodology described by Verna Allee in The Future of Knowledge (still one of my favorite books on the knowledge economy and why I pursued certification in this methodology*).

This approach involves mapping a network where a specific task or process occurs. The nodes in this network are “roles.” A role speaks to the specific function that a person is playing. This is not their title on an org chart—it is usually more descriptive—such as advisor, buyer, designer, marketer, mentor, partner, problem solver. It is common for a person to serve in more than one role. Read more

Thinking about your organization as a network

The Internet is one huge network. But it is also the platform on which many smaller networks can be formed. Your organization exists in and through a lot of these smaller networks as well as the meta-network of the internet. Read more

Networks and the Organization: An Historical Context

The ability of people and organizations to connect with each other and to form networks moved into hyper-drive with the rise of the über network of our time, the Internet. Peter Drucker, one of the leading management thinkers of the last fifty years, highlighted the importance of the Internet by putting it into historical context.  Read more

The Hulu IPO: Wrong thinking on intangibles accounting hurting its chances

The internet television video company Hulu is reportedly considering an IPO. But, reports the NY Times, the company “evidently makes little in profit.”

I am not privy to their numbers but I can tell you from experience that their income statement is probably full of “expenses” that are actually investments in their intangible productive capacity (also called intangible capital). These include investments in some investments in processes, training, networks, and other forms of organizational knowledge. Read more

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