Corporate Longitude: What You Need to Know to Navigate the Knowledge Economy

Rating:
Summary: Review of Corporate Longitude, by Darius Mahdjoubi, July 02
Review: "Corporate Longitude: Discover Your True Position in the Knowledge Economy" is the third book by Leif Edvinsson, the so-called godfather of intellectual capital. Leif Edvinsson came in the spotlight of business literature after 1994, first due to an article by Thomas Stewart in Fortune magazine titled "Intellectual Capital: Your company's most valuable asset" (October 1994). Since then he has co-authored thee books: "Intellectual Capital: Realizing Your Company's True Value by Finding Its Hidden Brainpower" (1997), "Accounting for Minds" (1997) and "Intellectual Capital: Navigating in the New Business Landscape" (1998). "Corporate Longitude" is indeed a continuation of his previous books and a dozen papers on "intellectual capital" that can be translated into a layman's language as being the efforts to integrate the role of knowledge and intangible assets into accounting procedures and financial practices.

Leif Edvinsson was the first corporate director of intellectual capital at Skandia (a Swedish financial service company) and now he is an associate professor of intellectual capital at Lund University in Sweden. In addition to intellectual capital, Leif Edvinsson has shown his deep interest for the metaphor and analogy of navigation to explain his views. It is no wonder that the main model used to explain intellectual capital at Scandia is named "Skandia Navigator" and The Economist referred to him "a Viking with a Compass."

Corporate Longitude argues that "modern corporations habitually calibrate along one, single measure: financial capital. This is corporate latitude, the world of so-called, tangible assets made up of a pile of assets build upon the famous bottom-line. The trouble is that this measure gives corporations only part of the picture, only half of the co-ordinates required to know their precise location and to map out the route to their renewal. Without another lateral co-ordinate - a measurement for intellectual capital and other vital intangibles - companies are unable to locate their true potential or chart a meaningful course into the future."

Navigation in this book, however, has gone further than just being a metaphor to describe a phenomenon; rather the book is indeed one further step towards exploring the concepts behind the metaphor of navigation, a process that can be considered as analogy of navigation. Although there are sundry other books, papers and articles that have used the metaphor of navigation to describe business cases, the basis and the root of this attention to navigation has rarely been analyzed. Why is the metaphor of navigation so familiar and understandable? Why has it been used so extensively? Corporate Longitude is indeed a major first step in this direction as it uses the analogy of navigation to describe the distinction between corporate latitude and corporate longitude. Based on this hypothesis, in the future we should have more studies based on the analogy of navigation to explore business concepts. Leif Edvinsson (the same "Viking with a Compass" who now referrers to himself as the "Global Knowledge Nomad") humbly indicates "this book does not provide a definitive compass."

This work is well written and thought provoking. The author seems to aim at a popular managerial level, no doubt attempting to disseminate his practical views. One can hope that Professor Edvinsson in a future work makes a bridge between his practical world and the world of the academy.

Rating:
Summary: Review of Corporate Longitude, by Darius Mahdjoubi, July 02
Review: "Corporate Longitude: Discover Your True Position in the Knowledge Economy" is the third book by Leif Edvinsson, the so-called godfather of intellectual capital. Leif Edvinsson came in the spotlight of business literature after 1994, first due to an article by Thomas Stewart in Fortune magazine titled "Intellectual Capital: Your company's most valuable asset" (October 1994). Since then he has co-authored thee books: "Intellectual Capital: Realizing Your Company's True Value by Finding Its Hidden Brainpower" (1997), "Accounting for Minds" (1997) and "Intellectual Capital: Navigating in the New Business Landscape" (1998). "Corporate Longitude" is indeed a continuation of his previous books and a dozen papers on "intellectual capital" that can be translated into a layman's language as being the efforts to integrate the role of knowledge and intangible assets into accounting procedures and financial practices.

Leif Edvinsson was the first corporate director of intellectual capital at Skandia (a Swedish financial service company) and now he is an associate professor of intellectual capital at Lund University in Sweden. In addition to intellectual capital, Leif Edvinsson has shown his deep interest for the metaphor and analogy of navigation to explain his views. It is no wonder that the main model used to explain intellectual capital at Scandia is named "Skandia Navigator" and The Economist referred to him "a Viking with a Compass."

Corporate Longitude argues that "modern corporations habitually calibrate along one, single measure: financial capital. This is corporate latitude, the world of so-called, tangible assets made up of a pile of assets build upon the famous bottom-line. The trouble is that this measure gives corporations only part of the picture, only half of the co-ordinates required to know their precise location and to map out the route to their renewal. Without another lateral co-ordinate - a measurement for intellectual capital and other vital intangibles - companies are unable to locate their true potential or chart a meaningful course into the future."

Navigation in this book, however, has gone further than just being a metaphor to describe a phenomenon; rather the book is indeed one further step towards exploring the concepts behind the metaphor of navigation, a process that can be considered as analogy of navigation. Although there are sundry other books, papers and articles that have used the metaphor of navigation to describe business cases, the basis and the root of this attention to navigation has rarely been analyzed. Why is the metaphor of navigation so familiar and understandable? Why has it been used so extensively? Corporate Longitude is indeed a major first step in this direction as it uses the analogy of navigation to describe the distinction between corporate latitude and corporate longitude. Based on this hypothesis, in the future we should have more studies based on the analogy of navigation to explore business concepts. Leif Edvinsson (the same "Viking with a Compass" who now referrers to himself as the "Global Knowledge Nomad") humbly indicates "this book does not provide a definitive compass."

This work is well written and thought provoking. The author seems to aim at a popular managerial level, no doubt attempting to disseminate his practical views. One can hope that Professor Edvinsson in a future work makes a bridge between his practical world and the world of the academy.

Rating:
Summary: True Insight
Review: A lot of business books offer you summaries and explanations of ideas and trends in the marketplace. Few books contain anything that is actually new. Corporate Longitude on the other hand is brimming with original insights and fresh perspectives. This book gives us a glimpse into one of the most original business minds of our times, intellectual capital guru Leif Edvinsson.
Corporate Longitude does not go where you think it is going to go. The book takes you in unexpected directions with unexpected imagery and unexpected conclusions. You cannot skim through this book! The writing style of this book offers an insight into the author's genius: he understands the human mind and its tendency to reduce complex ideas into simple, linear and often erroneous patterns.
Central to this intriguing book is the metaphor of the compass, an instrument that helps us know where we are. In light of the current crisis in the accounting world and the market's difficulty in deciding what a company should be worth, Corporate Longitude suggests that current valuation models are flawed in the extreme. Accountants and analysts alike are sailing the seas with Latitude data but no Longitude data. No wonder they are lost. A firm's intellectual capital is unaccounted for. This book should be must reading for financial analysts seeking to find a company's true value and anyone else who seeks to be on the vanguard of thought in the business world.
David H. Brett, CEO and Founder, Knexa.com

Rating:
Summary: True Insight
Review: A lot of business books offer you summaries and explanations of ideas and trends in the marketplace. Few books contain anything that is actually new. Corporate Longitude on the other hand is brimming with original insights and fresh perspectives. This book gives us a glimpse into one of the most original business minds of our times, intellectual capital guru Leif Edvinsson.
Corporate Longitude does not go where you think it is going to go. The book takes you in unexpected directions with unexpected imagery and unexpected conclusions. You cannot skim through this book! The writing style of this book offers an insight into the author's genius: he understands the human mind and its tendency to reduce complex ideas into simple, linear and often erroneous patterns.
Central to this intriguing book is the metaphor of the compass, an instrument that helps us know where we are. In light of the current crisis in the accounting world and the market's difficulty in deciding what a company should be worth, Corporate Longitude suggests that current valuation models are flawed in the extreme. Accountants and analysts alike are sailing the seas with Latitude data but no Longitude data. No wonder they are lost. A firm's intellectual capital is unaccounted for. This book should be must reading for financial analysts seeking to find a company's true value and anyone else who seeks to be on the vanguard of thought in the business world.
David H. Brett, CEO and Founder, Knexa.com