Comprehensive Intellectual Capital Management: Step-By-Step

Chapter 5. The Knowledge Management Stage and Organizational IQ

Albert Einstein's hypothesis that an average person uses only 10 percent of his or her brainpower is still faced with great amazement. Pondering on what an extra 1 to 5 percent of brainpower will produce, scientists starting with Einstein tried to unlock the mystery of how the brain works, with very little luck. Knowledge management (KM) practitioners, however, seem to have more luck when it comes to the organizational brain. Observing that organizations use only 20 percent of the knowledge available to them,^[129] KM practitioners set out to find ways for organizations to recognize and leverage their knowledge. This is the quest of knowledge management. KM is the art of managing the knowledge accumulated in an organization's databases, practices, and routines (explicit knowledge) and that contained in the heads of its employees (tacit knowledge) to create value. To some, KM is one and the same thing as intellectual capital management (ICM), where innovation processes and intellectual property (IP) are seen as knowledge resources. This, however, is not the view taken in this book. Although, theoretically speaking, the management of any intellectually based asset or resource is a management of the knowledge underlying that asset, from the practical perspective, managing innovation and IP (though knowledge based) is very different from managing the raw knowledge resources. To classify and manage innovation and IP as knowledge ...