American expert (pictured right) in knowledge
management who was a journalist at Fortune magazine and editor of the Harvard Business Review
A successful organization is a company of knowledge and effectively uses its
intellectual capital (or collective brainpower) to satisfy its
Intellectual capital has three parts:
1. Human capital
Employee brainpower which is best exploited by:
- removing unnecessary jobs, paperwork and political infighting.
- encouraging teamwork, innovation and communities of learning.
2. Customer capital
The value of relationships with customers and the ability to create solutions for
them, indicated by:
This is often the worst managed part of intellectual capital, because many organizations have little knowledge
about their customers.
3. Structural capital
Knowledge kept within the organization, resulting from individual and group learning e.g.
technologies, inventions and business processes.
These three components of intellectural capital should not be treated, or invested in, separately, because they
are totally interdependent.
To maximize customer satisfaction organizations must create organization-wide learning through:
1. Recruiting knowledgeable employees
Employees are knowledge workers who know at least as much as managers.
2. Applying people's knowledge and skills
Empowering people to take responsibility for:
- exchanging information and learning (particularly from customer contact).
3. Having leaders and managers who lead and inspire (not
- see employees and customers as vital assets to be invested in and nurtured.
- create a shared purpose based on learning to improve customer satisfaction.
4. Empowering people to take responsibility for results and
Employee power comes from:
- the search for knowledge (not position).
5. Implementing the idea of a learning
Key quotes on knowledge
Information and knowledge are the thermonuclear competitive weapons of our time.
Intellectual capital is intellectual material – knowledge, information, intellectual property, experience – that
can be put to use to create wealth. It is collective brainpower.