One of the most important chapters is Chapter 5. "The Treasure Map" contains information which can prove far more valuable to a company than any gold buried by pirates in the Caribbean. As with that gold, however, intellectual capital must first be appreciated; located and recovered; and then organized and managed with meticulous care. Hence the importance of Chapter 9 in which Stewart offers ten principles for managing intellectual capital. Hence the importance, also, of the Appendix in which he provides all the other "tools" needed.

Let the digging begin!

9 of 9 found the following review helpful:


BrainPower  Aug 29, 1998
If you are looking for a plain and straight forward explanation of today's information revolution then this is your book. It is easy to read and understand, with up-to-date information about companies creating wealth thru strategic use of Intellectual Capital and Knowledge Management. Mr. Stewart's writing style is easy to follow and grasp, as a good editor from an excellent magazine (Fortune Magazine) should be.

He made himself known in the field of IC when he wrote a ground-breaking-article in Fortune Magazine on June 3, 1991 under the title "Brainpower". In this article he wrote "Intellectual capital is becoming corporate America's most valuable asset and can be its sharpest competitive weapon. The challenge is to find what you have-and use it". Intense reader's reaction to this article eventually led to the writing of this knowledgable book.

He (Thomas Stewart) leads us by the hand, in defining Intellectual Capital and its widely accepted classification: human capital, structural capital and customer capital.

Even though this book is an excellent introduction to modern management; equal to or greater than reengineering; it is also of vital interest to present employees which are faced with potential unemployment, unless they understand what are the driving forces shaping today's corporations.

"Knowing" is the bread and butter in this ever- changing-turbulent-technology-driven economy. Thomas Stewarts explains why this information revolution is producing victors as well as victims. While there are companies flourishing in this uncertain economy like Wal-Mart, Microsoft, and Toyota, others are falling behind like Sears, IBM, and General Motors. While Akers was removed from IBM because of a great spiraling decline in growth and profits, Bill Gates at Microsoft was amassing double digit increases in revenues and profit. While Stempel watched GM's market share erode, Iaccoca and Eaton were increasing Chrysler's market share. While Sears was struggling, Wal-Mart was flourishing.

This book introduces us to hidden assets not reflected in financial reports, but fully responsible for creating wealth. Intangible assets like knowledge of a workforce, the know-how of workmen who come up with a thousand different ways to improve the efficiency of a factory. In a sentence: "Intellectual capital is intellectual material-knowledge, information, intellectual property, experience, that can be put to use to create wealth. It is collective brainpower."

After you read this book, you will then understand why your company is making all those changes, and perhaps, avoid your being part them in the process.

This is a 21st century book for people working in post-industrial societies learning how to survive in a fast paced environment without getting hurt.

12 of 13 found the following review helpful:


Stewart demonstrates he has intellectual capital too  Mar 07, 1999 By Lou Agosta (lagosta@21stcentury.net)
Knowledge is the currency of the information age. The sudden ubiquity of information technology is considered by the author to be the biggest story of our time (p. xvii). He may just be right; and while information is not alone sufficient to constitute knowledge, this discussion goes way beyond the current platitudes of transforming data into information and, in turn, into knowledge. The author considers such arbitrary distinctions a tar baby (p. 71), a place to get stuck. He implies (but does not explicitly state) that knowledge is constituted by bringing a framework, structure, organization to experience, what is called "content" in the age of internet computing. Such knowledge includes the expertise that grows up in a community of practicing experts around a task, person, or organization as well as the tools (networks and databases) that augment that knowledge (p. 71). For example, in the knowledge economy the flow of information is as important as the flow of good and services and, to some extent, interchangeable. The inventory of goods required to be ready to hand to address customer purchases can be reduced by an accurate inventory demand forecasting system in a victory of information over inventory (p. 26). Physical assets are being replaced by the networks and databases -- structural knowledge capital -- in the generation of economic value. Information technology has an essential facilitating and enabling role to play in each of the three forms of knowledge capital identified and discussed by Stewart. To this reader, though perhaps not to many business and technology managers, the first kind -- human knowledge capital -- is the least interesting of knowledge assets. Round up and insert here all the usual suspects in stories of dumb companies that try to treat their workers like interchangeable cogs in a mechanisms. Compare these with smart companies that promote employee stock ownership, empowerment, and professional development. The dilemma remains the same. If the employee leaves, so does his or her ability to solve problems for the organization. True, you can make a persons miserable with legal documents and corporation counsels;what you can't do is make them loyal that way. The author's original insight here is that the loyalty is often to the community of practice -- professional organizations of knowledge workers (network specialists, database specialists, etc., by analogy with doctors and lawyers). Really smart companies create communities of practice as knolwedge exchanges, technical advisory groups, and writing workshops. More significant is structural knowledge capital. The framework for this is information technology. The example of the inventory system substituting for product on hand on the floor of the warehouse belongs here. Also included are various ways of bundling information with products -- as when the documentation accompanies the product on a CD ROM disk -- and of products that are themselves essentially information content (digital informational entertainment and services). Although this includes the traditional repertoire of patents, copyrights, trade secrets, and intellectual property in the narrow legal sense, these are a drop in the bucket. Group here the initiatives one can read about in the business and trade publications being driven by the big six consulting organizations in building "knowledge xchanges," wide area databases of technology and industry specific methods and practices of solving problems.The most original insight is to think of customer relations as knowledge capital. Once again these relations are enhanced by connecting with the customers through networks and works flows enabled by technology, presenting the competition with barriers to market entry and costs of catch up. Throughout the discussion, the author argues persuasively that a switch has occurred from information supporting the "real" business to information being the business (p. 165). This method is fundamentally different than squeezing suppliers and distributors to increase the companies own profit margin. The question to ask rather is our share of the customers business growing as fast as their business is growing. If so, then a win-win process is underway. The author conclusions with chapters on the economics of information as well as a useful appendix on measuring and managing intellectual capital. Unlike physical assets, knowledge is nonsubtractive. It can be sued again and again without being consumed, used up. It seems to qualify and limits (if not flat out contradict) the fundamental principle of economics, the law of diminishing returns. For example, once a substantial up front cost is incurred in constructing a software product, the costs of reproduction and distribution (though perhaps not of maintenance and support) are relatively minor. There are no diminishing returns in sight. My obtaining a piece of knowledge in no way diminishes your ability to obtain it too. What does occur, however, is wholesale obsolescence as the rate of technological changes (one of the fundmaentla drivers of macro-economic growth) creates legacy systems at an unprecedented rate. The audience for this book is business and technology professionals who want to understand the interplay between economic growth and information technology in a broad sense. The style is journalistic and suitable for the nontechnical reader with an interest in the economics of information and knowledge. The author's rhetorical flourishes, characteristic of such publications as Fortune magazine where the author is a writer, are well-balanced with incisive argument and a substantial marshalling of data and evidence. The footnotes are scholarly and are a useful supplement to readers who wish to drill down into the intellectural content behind the headlines. There is no index. Stewart makes a signficant contribution and demonstrates a masterful grasp of his material, which makes him very knowledgeable indeed. -- excerpt from my published review in Computing Reviews, December 1997

7 of 7 found the following review helpful:


Ref A for Buidling Value in the Information Age  Jun 25, 2005 By Robert D. Steele
I read the same author's The Wealth of Knowledge: Intellectual Capital and the Twenty-first Century Organization first, and then went back to get this earlier book (1998), and I actually feel that reading them in that order is better. This book has a lot of detail that is well served by the context that can be found in the later book.

For those who really wish to get a deep look at the future of building value in the age of distribution information in all languages, I recommend that both of Stewart's books be read in conjunction with the following three Nobel-level books: Margaret Wheatley, Leadership and the New Science: Discovering Order in a Chaotic World Robert Buckman, Building a Knowledge-Driven Organization and Christensen & Raynor, The Innovator's Dilemma: The Revolutionary Book that Will Change the Way You Do Business (Collins Business Essentials) My reviews of these books are both evaluative and summative, and could be helpful as short-cut, but they are no substitute for actually buying and reading the books.

The most important point in this book is that the value is no longer found in collecting just in case knowledge, but rather in connecting dots to dots, dots to people, and (the highest value) people to people. It's about connecting, not collecting. Based on this book I drew my own value triangle, VALUE appearing in the middle of the triangle, with Context being the lower left corer, Content being the lower right corner, and CONNECTION being the apex of the triangle--further refined as connecting customers, connecting contributing talents, and connecting sub-contracted sources, softwares, and services. No one is doing this today in the manner that meets the emerging needs of the marketplace.

Most interesting to me is the author's early emphasis on the Chief Financial Officer being the point of sale, not the CEO, the CTO, or the production divisions. Intellectual capital is a value-creation and profit-building exercise, and it needs to be presented as a financial campaign plan, not a technology plan, not a human resources plan, and not a sales and marketing plan.

Although the author focuses on intellectual property, and provides compelling anecdotes and links that suggest that any company in the knowledge business can increase its bottom line earnings by 20-40% if it does a better job of managing its intellectual property, I see two other emerging marketplaces in this book that the author may not have intended but certainly contributes insights to: managing shared access to external sources, to reduce the cost and increase the knowledge that companies can use to increase their competence in a global environment; and managing customer understanding and relationships in the aggregate--it is possible to take cross-selling to new heights if companies in different industries that are not competing with one another, will share customer information in new ways, thus leading to the invention of new3 offerings and new value.

A major point in this book that I believe everyone misses is that the management of intellectual property, or knowledge management, or external open source information acquisition and exploitation, is totally and utterly without value in the absence of a strategy. Collection or connecting is of the greatest value when it is done with strategic purpose, operational efficiency, and tactical effect.

There is a lot more in this book that will impact on my strategic business planning, and that I choose to not summarize here, but will instead end with three points the author makes that I consider to be important:

1) In the information age, only investments in knowledge building are really investments--traditional investments in capital goods are costs, not to be confused with investments intended to generate new value.

2) Knowledge value grows on a logarithmic scale, while goods value grows arithmetically.

3) In today's environment, careers are defined by personal skills and networking, not traditional jobs and corporate positions. The corollary of this is that individuals must self-manage their continuing education and skill acquisition, and any job that fails to provide for continuing upgrading of skills is not worth keeping.

I consider this a seminal reference.

See also, with reviews:
The Fortune at the Bottom of the Pyramid: Eradicating Poverty Through Profits (Wharton School Publishing Paperbacks)
The Wealth of Networks: How Social Production Transforms Markets and Freedom
Revolutionary Wealth: How it will be created and how it will change our lives
The Battle for the Soul of Capitalism: How the Financial System Underminded Social Ideals, Damaged Trust in the Markets, Robbed Investors of Trillions - and What to Do About It
The Politics of Fortune: A New Agenda For Business Leaders

4 of 4 found the following review helpful:


Great book for explaining what "IC" is all about.  Feb 20, 2001
Mr. Stewart does an excellent job outlining and then providing the supporting information for Intellectual Capital. I appreciated his personalized writing style and brutal honesty. Mr. Stewart has collected an impressive amount of supporting statistics, real life scenarios, and quotes to add to his overview of Intellectual Capital. Now that my warm fuzzies are out of the way that only thing that keeps this from being a five star is that you can't read this book lying down on the couch or on a plane after a drink because you will fall asleep. :-) It is a great book for when you are wide awake.

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