Posted by Mezei on March 03, 1998 at 20:56:23:

In Reply to: Re: Can measuring IC thwart KM initiatives? posted by Rob Patzig on March 03, 1998 at 16:09:28:

Hi Rob,

That's my point exactly. The moment we attempt to assign empirical measurements to IC, we completely thwart the KM process. How are these dynamics related? Well, the end value that we call IC is a measure alright, but a measure of how effective the KM process is unfolding. So the greater our intellectual capital valuation, the more efficient the tacit/explicit unfolding of knowledge is occuring within the organization. The thing is, from what I understand, KM is a dynamic which integrates opposing elements like individual/group etc. IC on the other hand assigns monetary values to the three 'kinds' of knowledge within a company: human knowledge, technological information, and data warehousing. How valuable is our chief scientist? How valuable is our custom designed intranet? How valuable is our data storage/retrieval? Once we assign these values (arriving at the value is an area that is generating a lot of research), then we end up with an IC number which should equal the market value of the company. So, if a company is worth 15 billion on the stock market, but only has 5 billion in capital assets, we can figure out where the 15 billion comes from. Almost like deduction, we have to assign the surplus value somewhere, which is the role of the IC manager.

The thing worth understanding, and I think it can be tricky to grasp, is how knowledge as an intellectual capital valuation is different from the KM process that creates new knowledge. The former is a microcosm, a human individual that goes about their work within the company, the latter is the overall dynamic between human and technological processes. This has a alot to do with Yogesh's definition of KM.

Don

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