The New Management: Finding the right balance

As you probably know by now, we see the modern business as a knowledge factory. This means that all managers need to become expert in the management of a knowledge factory. There are three critical management concepts that you will need to add to your toolkit in order to get the best results possible from your knowledge factory: networks, orchestration, and innovation. Read more

Three Ways to Adapt Your Organization to the Knowledge Era

The knowledge era is here to stay. But most organizations have not yet completely caught up with this seismic shift. In our new book Intangible Capital, we address three ways to think about adapting your organization:

The New Factory focuses on the performance of your intangible capital. The New Management is about driving innovation in your organization. And the New Accounting explains the link between intangibles and the financial performance and valuation of your business. These images and concepts describe the knowledge-era equivalents of familiar basics in business. We are not advocating the abandonment of the existing basics but, rather, supplementing your existing practices with new ones better suited to the knowledge side of your business.

The New Factory introduces knowledge as a business asset. It’s actually a very flexible asset and can take many forms: as a product, as a raw material and as an engine for the growth of your company. This section explains the economics of getting paid for knowledge (and sometimes giving it away) and how knowledge becomes a raw material for your business through three basic classes of assets: human, relationship, and structural knowledge capital. You’ll learn that structural capital is the most powerful knowledge asset because it is infinitely scalable and repeatable. But that in order to use and monetize any of these assets, they need to be combined in a system, what we call the knowledge factory. We’ll show you how to build a model of your knowledge factory that will help you in thinking how to measure, manage and  maximize the performance of your organization’s knowledge. 

The New Management introduces the layers of networks that make up the knowledge factory and that limit the usefulness of traditional management tools like organization charts, strategic planning and managerial controls. By definition, knowledge is spread throughout your knowledge factory. That means that you need to learn to “manage” information flows from the bottom up and outside in. Nowhere is this more necessary than in the area of innovation where your challenge is to facilitate the development and implementation of new ideas from all levels of your organization as well as your customers and external partners.

The New Accounting explains how today’s businessperson is hampered by lack of information about the knowledge factory. Knowledge assets are not captured in accounting systems and are almost invisible in other conventional forms of management information. We will introduce you to strategies to remedy this situation through the creation of simple reports about the cost, strength and performance of your knowledge factory. You can use these reports immediately to support your internal management. We will also prepare you for the day when you use this kind of information to communicate with external stakeholders including investors, bankers, partners, customers and even employees to increase the valuation that they assign to your business. We end by explaining how your reputation is dependent on the success of the management of your knowledge factory. It holds your factory network together and ensures that your factory will be able to grow and innovate heading into the future.

It is this possibility of performance, innovation and valuation that we hope will lead you to adapt your thinking and your management approaches to the knowledge era.

From Intangible Capital: Putting Knowledge to Work in the 21st Century Organization