The New Organizational Wealth: Managing and Measuring Knowledge-Based Assets

by Karl Erik Sveiby

Book Overview

New strategies for business success based on shifting the focus from information to knowledge -- Fifty percent of the fastest-growing companies in the U.S. can be described as ""knowledge companies""... This description may be from another edition of this product.

• Format: Hardcover
• Language: English
• ISBN: 1576750140
• ISBN13: 9781576750148
• Release Date: January 1997
• Publisher: Berrett-Koehler Publishers
• Length: 275 Pages
• Weight: 1.32 lbs.
• Dimensions: 0.9" x 6.4" x 9.3"

Customer Reviews

Knowledge as Wealth

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.

The New Organizational Wealth

Ever wonder why the market value of a company is so much higher than the "book value" of a company? Sveiby tells us it is the intangible assets of a company that make up the difference. In The New Organizational Wealth Sveiby focuses particularly on knowledge organizations for whom the intangible assets are particularly crucial. He describes the three categories of intangible assets (employee competence, internal structure and external structure) and, with examples from the real world, recommends strategies to maximize these assets through recruiting, management, organizational structure and thoughtful customer selection. The final section of the book provides concrete nonfinancial measurements we can each use to monitor these important intangible assets. The New Organizational Wealth is a terrific book and a superb reference for the measurement of intangible assets!

This book presents methods to determine intangible assets

My Name is Charles Cunha.Currently, I am doctoral student in an educational technology program at Pepperdine University, Culver City, CAI have written a review on this book since it relates to my areas of studies. Presently many companies are trying to determine their organizational wealth. Most companies try to measure their organizational wealth only based on visible quantitative and qualitative assets. Regardless of what method is used or what organizational effectiveness model is utilized to determine organizational wealth, the fact remains that only visible assets are used. This of course results in many organizations to question their method or approach to determine their organizational wealth. Moreover, the problem is perpetuated when organizations benchmark each other using similar methods of limited as well as restrictive quantitative and qualitative visible assets to determine their organizational wealth. Therefore, organizational management squabbles that the millions spent to determine their organizational wealth was a wasted effort because only visible assets were measured. Hence the questions remains, is there a better method to determine organizational wealth? The New Organizational Wealth written by Karl Erik Sveiby provides realistic tools and methods for organizations to determine and manage a knowledge organization. Moreover, this book presents an overview for organizations to measure their worth using intangible assets. This book clearly explains that by using intangible assets to determine organizational wealth based on employee's talents and strengths, customer support and partnership, as well as supplier's reliability and integrity make intangible assets the most value to the company. Overall, this book has several case studies that show when an organization measures intangible assets result is long-term success.

Great distilled thinking, well reasoned with many examples.

Knowledge Focus Managers in some of the fastest growing and most proftable businesses focus on knowledge, see theie business from a knowledge perspective, and act as if there intangible assets are real. (p x) So many companies have intangibles exceeding the value of their tangible assets, eg Telstra 90% intangible. This can be tracked by the share price v book value. But what of the businesses that do not have a share price eg private businesses, public sector organisations etc. Intangible Assets Sveiby identifies three major classes of intangible assets:Employee competence, Internal structures, whereby competence may be transferred from employee to employee, and External structure, including goodwill, relationships with customers. Sveiby considers the management of the intangible assets critical in managing the business, where the intangible assets are significant. He suggests using indicators of movement over time, rather than absolute values of the intangibles. Suggested indicators are classified into three types:I ndicators of growth/renewal;Indicators of efficiency;Indicators of stability. Measurement of employee performance is split between the professionals (eg doctors, engineers, accountants), and the support staff. There is a continual blurring of this distinction. The real difference is the professionals are revenue generators, and the support staff are not. But the support staff do contribute significantly to the creation of value in the business through their impact on internal and external structures. Suggested indicators are provided for each type of intangible and for each indicator. To many to list. Read it and see. A few to tease you with: %big customers,age structure, devoted customer ratio, frequency of repeat orders) The arguments Sveiby uses are based on his observations, and logic that makes his conclusions all the more powerful.

An in-depth provocative exploration of intangible assets

Karl-Erik Sveiby is one of the foremost thinkers working in the field of intellectual capital. His hands-on experience in working with intangible asset creation lends insight and practical application to a profound new way of thinking about value. Anyone who is ready to welcome a new way of thinking about value and corporate performance measures will benefit greatly from reading this book. Verna Allee, author The Knowledge Evolution