Knowledge management

The final lever is that of knowledge management as an asset. This builds on the notion of measuring and managing intellectual capital. While many organizations have accountants and auditors track in detail every piece of physical plant and machinery, few devote even a fraction of this attention to intellectual capital. Yet this is much more valuable, since it includes knowledge and people. Advocates of measuring intellectual capital have shown that its measurement provides lead indicators of future financial performance. In his book The New Organisation Wealth Karl Erik Sveiby demonstrates how advertising agency Saatchi and Saatchi, when apparently financially healthy, was rapidly depleting its intellectual capital. This was a precursor of the inevitable decline in its financial fortunes. Information and communications technologies can significantly enhance knowledge activities. These technologies have maximum benefit when part of a viable collaborative infrastructure that acts as a co...