It’s Time for a Knowledge Economy Balance Sheet
The traditional balance sheet is one of the key financial statements produced by every business. It records all the physical assets owned by a company as of a certain date. It also records monetary liabilities and the equity of the corporation. Together, these two sides of a balance sheet served for centuries to demonstrate the [...]
Analyzing I-Capex: How to understand the return on your intangible capital expenditure
This is a follow-up to yesterday’s post about intangible capital expenditure. When you are starting out, an i-capex report will just be a separate report in your accounting system or in a spreadsheet to be used to report to management or your board of directors. Ideally, you should go back a few years so that [...]
Intangible Capital Expenditures: How to track your annual i-capex
Last week, in my interview of Alan Anderson and Chuck Hulten on accounting and intangibles, Alan made a statement that has stuck with me: That in all his travels in his own business and through his activities with the AICPA, he has never heard people say that they use their GAAP statements to make business [...]
The New Accounting
The accepted wisdom inside the IC world is that we should ignore accounting and accountants—they will never “understand” what we are doing. I went along with that for a number of years, accepting the view of many that IC is special, it cannot be truly measured, that it must be appreciated. Well, I am way [...]
Thinking about your organization as a network
The Internet is one huge network. But it is also the platform on which many smaller networks can be formed. Your organization exists in and through a lot of these smaller networks as well as the meta-network of the internet.
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 [...]
6 principles of management in the knowledge era
We often use the image of a “knowledge factory” to talk about the infrastructure of the today’s business. A huge percentage of this infrastructure is in intangible knowledge assets that work together as a system, the knowledge factory. Once you begin to understand the power of the combination of your knowledge assets, you are on [...]
A Lego Model of a Medical Device Company
Here’s one more example of a Lego model of the knowledge factory of a company. This one is for a medical device company that sells a physical product that is supported by a service. The product is used by consumers in their home. But the company does not have direct contact with the consumers until [...]
Another Lego IC model: A Specialty Contractor
With the Google model, we told the story of how the company developed and built its knowledge factory starting with human capital. But to model the IC of an established business, it often helps to start with how a company gets paid. This gets the focus directly on the value creation process and also ensures [...]
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 [...]
