Intellectual Capital Speakeasy

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					Intellectual Capital:
Implications for us?
                       Dr. Allison Rossett
    Modified/updated Dr. J. Marshall 2005
               San Diego State University
               San Diego, CA 92182-0311
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
    Why do orgs care?
 Increase productivity of
  existing people and knowledge
 Enhance functional
 Create a flexible organization
 Reduce costs
 Respond to competitive
 Move into new markets
       KM or IC projects
 Capturing and reusing structured
 Capturing and sharing lessons
 Identifying sources and
  networks of expertise
 Building stronger communities
 Creating a new culture
 Capturing the best and holding
  on to it
             “Intellectual capital is
      packaged useful knowledge.”

                     What else is it?
What is intellectual capital and why
                    should we care?
     “The inevitable metaphor is the
Above the surface, the financial and
     physical resources.... Beneath,
 unseen, something vastly larger....
 but whose contours noone knows.”
       What does Stewart mean?
 “Knowledge and information take on their
  own reality, which can be separated from the
  physical movement of goods and services.”
 “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
    Knowledge Creation Cycle(s)
Objectivist:   Process of capturing, storing,
               retrieving and using knowledge.
               Focus on deriving knowledge
               from individuals and making it

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.
                Knowledge Conversion
            Tacit Knowledge     To   Explicit Knowledge

Tacit         Socialization:         Externalization:
Knowledge     Apprentice             Dialogue, analogies.
              watches master         Expert compares
              Internalization:         Combination:
Explicit      Informal story         Typical of most
Knowledge     telling; lunch chats   training programs, job
                                     aids, documents, tests

                               [Nonaka & Takeuchi, 1995]
 Currently                   A KM world
 classes
 teaching is the business
 people and their skills
  and knowledge are
  tightly merged,
 technology to deliver
Charles Paulk of Andersen Consulting
“When one of our consultants shows
 up, the client should get the best of
 the firm, not just the best of the
    3 Kinds of skills [p89,90,91]

Commodity: readily           telephone, internet
obtained, not in dustry      search
Leveraged: know ledge        attorneys at a law
that is critical to an       firm; NA for a PC
org., part of its identity   vendor
Proprietary: co specific     KM and ID skills at
skills that define the       Leading Way
org and set it apart
(core competences)
“When work is about knowledge,
      the professional model of
 organizational design inevitably
        begins to supercede the
          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.
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
                 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.

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