Modelling the IC of Google’s search business
Google’s search business is a great example of a knowledge factory. While it is driven by highly complex math, the business model developed a decade ago is very simple. It all started with the competencies of two computer science graduate students at Stanford, Sergey Brin and Larry Page. The year was 1995. Page was looking [...]
Why visualization is so important for intangible capital
One of the big reasons that folks don’t do more explicit thinking about intangible capital is that they have no frameworks or mental models about IC.
We see this disconnect in a lot of businesses. Just about every manager knows that our economy has shifted. They know that knowledge is an important driver of their [...]
The Knowledge-Era Plant Tour
When we were bankers, one of the required parts of our jobs was a “plant tour.” Managers would walk a banker (or sometimes a gaggle of us) from the raw materials warehouse along the production lines to the finished goods stocking and shipping departments. Of course, bankers are not manufacturing experts.
We couldn’t really critique [...]
Intangible Capital is the New Factory
The core of the tangible economy is the factory. Simply put, a factory is a building where production equipment converts raw material into finished goods. Companies make their money by selling these finished goods. The story of the tangible economy is the story of organizing and running these factories.
The modern knowledge business can also be [...]
The 4th Category of IC: Business Recipe
The classic categories of IC that we and most in the field use are human, relationship and structural capital. I’ve been reviewing these in detail in the last couple weeks. But there is one more that you will find useful as you begin to apply these concepts within your own organization: business recipe (I’ve also [...]
New Superpowers – Emerging Frontiers for Process
This week I have been talking about structural capital–the superpower of today’s organization. And process is one of the most important and least understood in terms of its importance and its sustained value to an organization.
Most internal processes in today’s organizations already have been automated to one degree or other. There are software programs [...]
Intangible Capital review by Jeremy Phillips
It’s much more fun to read than the rather solemn title suggests, combining strands of history, economics, management, metaphor and common sense, personal experience and anecdote. It’s also a monument to the metamorphosis of management and asset management philosophies from the age of bricks and mortar to the world of the internet.
So Why Write a Book?
In our consulting business, and in the world around us, we have seen the trend away from traditional manufacturing business to knowledge businesses and the inadequacy of current accounting and management systems to accommodate it. Think about it, 70-80% of the value of the average business is made up of knowledge assets (intangible capital). This shift affects every business from the store on the corner on Main Street to the technology giants. We are utterly convinced that American business cannot succeed by doing things the same old way. It is critical that we begin using new tools to see and manage these knowledge assets explicitly.
Don’t Write a Book for the Money
unique idea that is worth the interest of a viable publisher, months of writing, editing drafts, thinking and re-thinking, proofreading, taking time away from your real business – all this for a modest check that is still only an advance against future royalties? Even if the book takes off, which we believe ours will, it is certainly not going to make us rich at a few dollars a book.
