Chapter 2. The Intellectual Capital Model

Most organizations have adapted or transformed their management styles and business models to manage intellectual capital (IC) and respond to the IC-enabled dynamics of the knowledge economy. Many of these organizations have done it without even realizing that they are adopting an intellectual capital management (ICM) approach. A top executive of a leading consumer products company, whose name is withheld, commented that his company is not interested in ICM. "Show me the money," he said. "All I see are the circles and pyramids that ICM people draw in conferences." What this executive did not realize is that he was already managing IC in one way or another on a daily basis to make money. If it weren't for this executive's daily reliance on his gut feeling and tacit knowledge to manage his employees' innovation, the company he works for wouldn't be a market leader. If the company's employees did not care about the management of customer and structural capital, it wouldn't invest millions of dollars in its interactive Web site to solicit consumers' feedback 24 hours a day, seven days a week.

Successful managers and businesses have been managing intellectual capital one way or another all along, whether consciously or intuitively. This however, does not mean that they have an ICM program or strategy. Managing IC as a matter of common business sense is not sufficient for the development of ICM as an organizational competency. It is only when a ...

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