Notes to Self : The Intellectual Capital - By Thomas Stewart

Notes from reading the book Intellecutal Capital by Thomas Stewart

• This book is a useful guide to the issues of identifyinf, capturing and using knowledge to improve competitive advantage.
• Intellectual Capital can be broken down into three areas Human Capital, Customer Capital and Structural Capital.
• Human Capital is the knowledge that resides within the head of employees and is relevant to the purpose of the organization.
• Human Capital is formed and deployed, writes Stewart, 'When more time and talent of the people who work in a company is devoted to activities that result in innovation'.
• Human Capital can grow in two ways: 'When the organization uses more of what people know, and when people know more stuff that is useful to the organization'.
• Unleashing the human capital resident in the organization requires 'minimizing mindless tasks, meaningless paperwork, and unproductive infighting'.
• Customer Capital is the value of a company's ongoing relationships with the people or organizations to which it sells.
• Indicators of customer capital include market share, customer retention and defection rates, and profit per customer.
• Customer capital is probably - and startlingly the worst managed of all intangible assets'.
• Structural Capital is the knowledge retained within the organization that becomes company property.
• Stewart calls this ' knowledge that doesn't go home at night'.
• Structural capital 'belongs to the organization as a whole. It can be reproduced and shared'. Example includes technologies, inventions, publications and business processes.
• Understanding what intellectual capital amounts to is only part of the story for organizations.
• We get real value from being able to capture and deploy Intellectual Capital.
• Stewart offers the following ten principles for managing intellectual capital
  • Companies don't own human and customer capital. Only by recognizing the shared nature of these assets can a company manage and profit from them.
  • To create human capital it can use, a company needs to foster team work, communities of practice, and other social forms of learning.
  • Organizations wealth is created around skills and talents that are proprietary and scarce. To manage and develop human capital, companies must recognize unsentimentally that people with these talents are assets to invest in. Others are costs to be minimized.
  • Structural assets (those intangible assets the company owns) are the easiest to manage, but those that customers care about least.
  • Move from amassing knowledge just-in-case to having information that customers need ready-to-hand, and that which they might need within reasonable reach.
  • Information and Knowledge can and should substitute for expensive physical and financial assets.
  • Knowledge work is custom work
  • Every company should re-analyze the value chain of the industry that it participates in to see what information is more crucial.
  • Focus on the flow of information, not the flow of materials.
  • Human, structural and customer capital work together. It is not enough to invest in people, systems and customer separately.

Project Management and Chess

"Fancy what a game of chess would be if all the chessmen had passions and intellects, more or less small and cunning; if you were not only uncertain about your adversary's men, but a little uncertain also about your own; if your knight could shuffle himself on to a new square by the sly; if your bishop, in disgust at your castling, could wheedle your pawns out of their places; and if your pawns, hating you because they are pawns, could make away from their appointed posts that you might get checkmate on a sudden. You might be the longest-headed of deductive reasoners, and yet you might be beaten by your own pawns. You would be especially likely to be beaten, if you depended arrogantly on your mathematical imagination, and regarded your passionate pieces with contempt."  -George Eliot, Felix Holt; The Radical
Looks to me as if George Eliot had project people management in his mind when he wrote the above piece.  A project manager (how ever powerful he/she may be), has to complete the project with the help of people who may have their own likes, dislikes and purposes that are conflicting. While this scenario may not sound fun, it is what makes Project Management of any Enterprise class project more complicated and challenging, compared to a game of chess.

This is shared here not because this is a nice quote from a lesser known book, but  because there are couple of points a discerning Project Manager has to learn and remember.

#1.People are not Pawns and don't play them like that. Treat people like people (not like pawns obviously).
#2. However much the powers of a Project manager may be, once the stake holders feel that they are being used/played against, then (you) the project manager looses control.