Leveraging Intellectual Capital
Several years ago, I attended a meeting with executives and managers from one of the largest automobile manufacturers in the world. One of the top executives stood before the large crowd and said that the most valuable asset they have is their brand recognition. At that point, I knew this company was heading for trouble, and as I look at the headlines in the paper today, this icon of American manufacturing is struggling to survive.
Don’t get me wrong. Brand recognition is very important. However, there are other things that have even more value.
Over the past twenty-five years, I have observed that the most valuable assets of an organization tend to be the knowledge, talent, experience, capabilities, and vision of the people within the organization. These, coupled with the value of their patents, customer bases, and good will, equal what is called their intellectual assets.
When leaders understand how to formalize, capture, and leverage their intellectual capital to produce higher-valued assets, profits tend to soar.
In the early ‘90s, I asked executives of the Mayo Clinic to do something that I am asking you to consider doing today – that is, to look at what I call the “visible future.” The visible future is the part that you can see. Of course, the people at the Mayo Clinic said, “We don’t like to do that.” And when I asked why, they answered, “Because it depresses us.”
Indeed, their visible future included decreasing reimbursements for Medicare and Medicaid and increasing losses in their emergency rooms. To the executives of the Mayo Clinic, the future looked bleak. They were puzzled when I suggested, “Why don’t you sell your knowledge?”
Further thinking led them to put Mayo Clinic knowledge on CE (the Clinic’s first knowledge-based product). Any time, day or night, people who purchased the CD could put it in their PC and determine if, for example, their child’s rash and fever required just aspirin or a trip to the emergency room.
The Mayo Clinic put a $100 price tag on their CD product when it first came out about 15 years ago, and in the first year I was told they sold 670,000 copies. A light went on for the Clinic executives: leveraging internal knowledge creates value.
A side benefit they discovered was that by expanding to offer a knowledge-based product, they began to develop a new and powerful 21st century brand in the marketplace.
In the past, in order to get help from the Mayo Clinic (and give them revenue), you had to go to their location. Now, with a CD in French, German, Spanish, or Japanese, the Clinic could help people anywhere around the world at any time, long before 24/7 became a popular phrase. And why have just one CD? Why not customize the product for elementary schools, high schools, medical schools, and nursing homes?
As you might guess, after the Internet and the Web took off, customers could also tap into the Mayo Clinic on-line.
The result was to create new value and new revenue; they open their customer base up not to people who are geographically close, but to the world. And in the case of the Mayo Clinic, the name recognition isn’t regional or national anymore; it became international.
Are you leveraging the most valuable assets in your organization?
Daniel Burrus, one of the world's leading technology forecasters, business strategists, and author of six books
Copyright 2006 Author retains copyright. All Rights Reserved.
