There is a thirst for understanding how to manage the "new" companies that are knowledge based rather than founded on product manufacturing. Here is a book to help with that quest. Sveiby explains that, as an example, the public was willing to pay, in 1995, an average price of $70 for Microsoft when their book value was about $7. In other words, the shareholders saw about $9 of additional value for every $1 of tangible assets on Microsoft's books. There is no entry on Microsoft's balance sheet for that $9, and it represents a major trend in our "post industrial" economy. How do we manage such an illusive asset? Sveiby steps us through (1) understanding the era of knowledge Organizations, (2) managing intangible assets, and (3) measuring intangible assets. There are practical examples of measuring systems, how to organize a company to maintain and transfer knowledge, and keys to developing professional competence. Sveiby defines, for the purpose of this book, knowledge as "a capacity to act." "One's capacity to act is created continuously by a process-of-knowing. In other words, it is contextual. Knowledge cannot be separated from its context. The notion also implies teleological purpose. I believe that the human process-of-knowing is designed by nature to help us survive in an often hostile environment." I learned about the professional's three life cycles - the super star, the statesman, and the normal professional. I learned about the classic problem of organic growth in our knowledge organizations. And I re-learned that "it takes time, experience, and mental effort to turn information into useful knowledge. And since recipients cannot know until afterward whether it was worth spending that time, information that turns out to be worthless is really worth less than nothing." For those trying to understand the new business model, this book is well worth the time and effort. It will help you move your company into the modern age.
