The Wealth of Knowledge: Intellectual Capital and the Twenty-first Century Organization

Rating:
Summary: Paying Attention to Truth is Profitable and Protective
Review:

Too many people will miss the core message of this book, which is about paying attention to truth and seeking out truth in the context of networks of trust, rather than about managing the process of internal knowledge.

When the author says "It's time to gather the grain and torch the chaff," his book over-all tells me he is talking about brain-power and a culture of thinking (the grain) and counterproductive information technology and irrelevant financial audits (the chaff).

This is one of those rare books that is not easily summarized and really needs to be read in its entirely. A few items that jumped out at me:

1) Training is a priority and has both return on investment and retention of employee benefits that have been under-estimated.

2) All major organizations (he focused on business, I would certainly add government bureaucracies) have "legal underpinnings, ..systems of governance, ..management disciplines, ..accounting (that) are based on a model of the corporation that has become irrelevant."

3) Although one reviewer objected to his comments on taxation, the author has a deeper point--the government is failing to steer the knowledge economy because it is still taxing as if we had an industrial economy--this has very severe negative effects.

4) As I read the author's discussion of four trends he credits to John Hagel of I2, it was clear that "intelligence" needs to be applied not only to single organizations, but to entire industries. In my view, this author is quite brilliant and needs to be carefully cultivated by the U.S. Chamber of Commerce, all of the industry associations, and by governments. There are some extremely powerful "macro" opportunities here that his ideas could make very profitable for a group acting in the aggregate.

5) This is one book that should have had footnotes instead of end-notes, for while the author is careful to credit all ideas borrowed from others, it is difficult in the text to follow his thinking in isolation. One idea that is very pertinent to national intelligence and counterintelligence as well as corporate knowledge management is that of the reversal of the value chain--"first sell, then make," i.e. stop pushing pre-conceived products out the door and get into the business of just enough, just in time knowledge or product creation that is precisely tailored to the real time needs of the client.

6) The author excells at blasting those corporations (and implicitly, major government bureaucracies such as the spy agencies that spend over $30 billion a year of taxpayer funds) that assume that if they only apply more dollars to the problem, they can solve any challenge. "Too often 'dumb power' produces a higher-level stalemate." One could add: and at greater cost!

7) The bottom line of this truly inspired and original book comes in the concluding chapters when the author very ably discusses how it is not knowledge per se that creates the value, but rather the leadership, the culture, and infrastructure (one infers a networked infrastructure, not a hard-wired bunker). These are the essential ingredients for fostering both knowledge creation and knowledge sharing, something neither the CIA nor the FBI understood at the management level in the years prior to 9-11.

Rating:
Summary: It's About the Money
Review: A compelling and eminently practical book. Packed with examples and case studies, The Wealth of Knowledge builds a bridge between the abstract world of Intellectual Capital theory and the tough realities of business in the 21st century. With a fast paced and "in-your-face" style, veteran Fortune writer Tom Stewart reminds us of what the Knowledge Economy is all about: money. How to get it, keep it and make it grow. Anyone who thinks the phrase "New Economy" was just passing techno-hype and dot-com reverie should read this book. It may just save your business.
David H. Brett, CEO and Founder, Knexa.com

Rating:
Summary: Engaging book, sometimes lacking focus
Review: Business corporations of old were formed out of physical assets such as real estate, buildings, and machinery. Over the last few decades, and accelerating as we move into the 21st century, businesses have increasingly shifted emphasis to intangible assets, including brands, patents, relationships, knowledge, and organizational culture. Yet accounting methods and much input into strategy and decision-making have lagged behind this trend. Stewart, author of Intellectual Capital and a Fortune columnist, has produced an impressive book that investigates many aspects of the knowledge enterprise and the role of intellectual capital. The three main sections are "The Theory of a Knowledge Business", "The Disciplines of a Knowledge Business", and "The Performance of a Knowledge Business". The weakness in this range is that it appears that Stewart has thrown in topics that have little relation to the main point of the book. Each chapter, with a few exceptions, can be read separately as they do not build one on another effectively. Some of the chapters are particularly rewarding: Chapter 10 looks at how to support knowledge processes; chapter 12, "The Human Capitalist", gathers some interesting thoughts on work and pay for intellectual capitalists, and chapter 13 covers several recent views on how to account for intangibles. The book is definitely worth picking through for the many nuggets but would have been improved with a tighter focus and a stronger theoretical framework. Faults are easy to miss and, when not missed, to forgive thanks to Stewart's undeniable talent as an entertaining writer.

Rating:
Summary: How to Suceed in Busines without Really Trying
Review: Joseph Heller is a great writer. His most famous work involves young
Yossarian exploring the wily chambers of an insane McNamarian bureaucracy
that is the inner workings of the WWII military campaign in Europe. Milo
Minderbinder counterparts Yossarian's character by exploring capitalism
gone wild. Heller deliciously wraps the whole thing up such that every
chapter, every page, every paragraph and in some cases every sentence
begins and ends with a catch-22.

Tom Peters is a sharp tack. Back when the US had more serious
business problems to attend to including 10% inflation, 20% prime
interest rates, 10% unemployment, and Japanese Kereitsu's
managing circles around America's best and brightest Drukerarians,
Peters and his McKinsey side-office cohort Bob Waterman fired the first
shot in the new economy by exploring the bureaucracy and social
organization of what makes excellent companies.

Thomas Stewart is the best of both authors. His new book has flagged an
inflection point in the evolution of high tech management. He
bookends every chapter, every page, every paragraph with fresh managerial
insight and survey that would make Peters proud and a anecdotal familiarism
which stems from knowing every major C-level executive at all the thought
leading companies doing "cool work." "The Wealth of Knowledge" weaves
the do's and don'ts of corporate lore into a terrific read that only Heller
can rival in fiction exploring the catch-22 of tangible accounting and measuring, creating
and managing a corporation's intangible assets--namely Intellectual Capital.

Rating:
Summary: Another well-written book by Tom Stewart
Review: Stewart has done some remarkable writing on KM over the past decade and this is another excellent work. For those of us involved in Knowledge Management his writing always adds clarity to how KM can add value to an organization.

For those new to the field or for an executive trying to understand how to take advantage of an organization's Intellectual Capital, this book along with Davenport and Prusak's "Working Knowledge" provide the clearest understanding of how to successfully implement KM for maximum return on investment.

Rating:
Summary: The Value of Knowledge
Review: The author posits in this three part book that organizations that effectively manage their knowledge assets - patents, copyrights, databases, as well as workers' skills, capabilities and expertise - to slash expenses and gain competitive advantage.

In the book's first section Stewart, a member of Fortune Magazine's Board of Editors and author of the 1997 best seller, Intellectual Capital defines knowledge assets and describes how they become the seeds of wealth and value creation.

In the second section, the author provides a four part program to manage intellectual assets. He suggests
1.Identifying and tracing knowledge's role in your business. He suggests discovering who gets paid for knowledge, who pays, how much and who creates the most value.
2.Matching revenue streams with the knowledge assets that produce them.
3.Developing a value proposition and strategy to invest in and exploit these assets.
4.Improving the efficiency of knowledge work and knowledge workers.

The author ventures into business' cosmic questions in the last section of the book: How should investors be rewarded? Why do businesses exist? Who invests? He argues that knowledge assets serve as the company's foundation. By reminding companies to value the importance of the human element in these systems, Stewart sharpens a business' responsiveness, performance and ability to address future challenges.

Rating:
Summary: Good read, provocative ideas
Review: This is Tom Stewart in his usual form: provocative, speculative, and challenging conventional logic. The writing style is lucid and the discussion of KM technolgy (2 chapters) is commendable. Just a few phrases and metaphors that is uses in the book make it a worthy read. Definitely worth the money. Buy it, but read it slowly. There is much tacit knowledge between the lines!

Rating:
Summary: brilliant ideas - and the man can write!
Review: Tom Stewart is the world's foremost authority on intellectual capital, which is no small recommendation in itself. But here's an equally important consideration for anyone thinking about buying this book: he won't bore you to death! If you've read much in this general area, you know that such a fatal end often awaits the unwary reader. In sharp contrast, this guy knows how to tell a story, and The Wealth of Knowledge is packed with them -- hugely engaging anecdotes drawn both from his own broad journalistic experience and from spirited conversations with an amazing array of business leaders. None of which is to imply that the theoretical foundations are glossed over. Stewart clearly has a wealth of knowledge himself in these matters. He imparts what he's learned in a way that not only enlightens, but also makes you want to keep reading. Solid, grounded and profoundly useful insights. Highly entertaining. Highly recommended.

- Chris Locke, author of Gonzo Marketing: Winning Through Worst Practices, and co-author of The Cluetrain Manifesto.

Rating:
Summary: Hats Off.
Review: You know, with all the talk over the past several years about the fact that we live in a knowledge economy, its never been clear to me how one uses that information to reshape the way one does business, and gain a competitive edge. How does one apply the notion of "intellectual capital" --which I competely agree with -- to running a company?
As it turns out, that is exactly what Tom Stewart does in The Wealth of Knowledge. At last, I say. In essence, its a book that looks at some of the "best practices" of companies that are doing exactly that, informed by Stewart's unique ability to connect the dots, and make sense of what is surprisingly fuzzy in the existing literature. I've followed Stewart's column, The Leading Edge, on and off again for years in Fortune, as he first began to chart these waters. I'm hardly surprised that he's the one to help tell us how to put the petal to the metal, and show how to use the knowledge that most businesses are really built upon. Hats off to you, sir.