Intellectual Capital: Implications for us?

1. Intellectual Capital: Implications for us? Dr. Allison Rossett Modified/updated Dr. J. Marshall 2005 San Diego State University San Diego, CA 92182-0311 arossett@mail.sdsu.edu

2. Who cares about all this? Intellectual capital is the use of systematic strategies and tactics to increase the effective utilization of knowledge to meet organizational objectives

3. Why do orgs care? • Increase productivity of existing people and knowledge • Enhance functional effectiveness • Create a flexible organization • Reduce costs • Respond to competitive pressure • Move into new markets

4. KM or IC projects • Capturing and reusing structured knowledge • Capturing and sharing lessons learned • Identifying sources and networks of expertise • Building stronger communities • Creating a new culture • Capturing the best and holding on to it

5. “Intellectual capital is packaged useful knowledge.” [p67] What else is it? What is intellectual capital and why should we care?

6. “The inevitable metaphor is the iceberg. Above the surface, the financial and physical resources.... Beneath, unseen, something vastly larger.... but whose contours noone knows.” [p63]

7. What does Stewart mean? • “Knowledge and information take on their own reality, which can be separated from the physical movement of goods and services.” [p31] • “To use more of what people know, cos. need to create opportunities for private knowledge to be made public and tacit knowledge to be made explicit.” [p88] • When he trashes universities

8. Knowledge Creation Cycle(s) Objectivist: Process of capturing, storing, retrieving and using knowledge. Focus on deriving knowledge from individuals and making it available. Constructivist: Based on Polanyi’s 1966 distinction between tacit and explicit knowledge,” we can know more than we can tell.” New knowledge is created through social interactions.

9. Knowledge Conversion Tacit Knowledge To Explicit Knowledge Tacit Knowledge FromExplicit Knowledge Socialization: Apprentice watches master Externalization: Dialogue, analogies. Expert compares Internalization:Informal story telling; lunch chats Combination:Typical of most training programs, job aids, documents, tests [Nonaka & Takeuchi, 1995]

10. classes teaching is the business people and their skills and knowledge are tightly merged, identified technology to deliver classes Currently A KM world

11. Charles Paulk of Andersen Consulting said: “When one of our consultants shows up, the client should get the best of the firm, not just the best of the consultant.” [p111]

12. 3 Kinds of skills [p89,90,91]

13. “When work is about knowledge, the professional model of organizational design inevitably begins to supercede the bureaucratic.” [p49]

14. Maybe KM isn’t so great??? From the Wall Street Journal, January 7, 2003: Where have all the CLOs and CKOs gone? A corporate phenomenon in the late 1990s, chief knowledge officers, also called chief learning officers, popped up at companies like Pfizer Inc., Coca-Cola Co., Monsanto Co. and BT Group PLC. Some of them installed new computer systems to help them pursue what was dubbed "knowledge management." Then came the collapsing stock market, corporate belt-tightening and a backlash against technology, all of which prompted many companies to scrap knowledge-management posts. For example, Monsanto, which appointed a chief knowledge officer in 1997, opted not to fill the post when the officer was promoted to another position.

15. Steve Andriole, a consultant at Cutter Consortium, Arlington, Mass., looks at the turnabout this way: "CKOs are like a vitamin pill. They make you feel good, but in a bear market the only thing that really sells is painkillers." More than 25% of Fortune 500 companies had CKOs during the height of the knowledge-management craze, according to some studies. Mr. Andriole estimates that fewer than 20% of top companies have a CKO or CLO today. But some CKOs have survived, even thrived, by judiciously distancing themselves from the original craze, while still exploiting the concept. Their staying power demonstrates how even managers closely associated with the most ephemeral trends can reposition themselves to remain relevant.

16. What is GREAT about it? Pfizer's Victor Newman is a prime example. In August 2000, the New York-based pharmaceuticals company named Mr. Newman chief learning officer and charged him with figuring out how to spread expertise and insight throughout the company's European arm, rather than leaving it isolated in pockets of brilliance. Mr. Newman, who is based in Britain, says the key to his survival has been concentrating on practical projects to encourage staff members to talk to one another, rather than trying to use "artificial knowledge-management concepts to colonize the world." For example, he set up a program of meetings between managers who have just made a major decision, such as whether to take a drug into full clinical trials, with other managers about to make similar decisions. "We don't talk about knowledge management," he adds.