Posts Tagged ‘intellectual capital’

T0-2 Starting a New KM Language in Your Organization

October 13, 2009

Starting KM in your organization also means starting to learn a new KM language among your members. A simple tool towards this end is an FAQ on KM (FAQ=frequently asked questions) which can be circulated among members or placed in the KM webpage in your intranet.

Download CCLFI’s FAQ on KM by pressing “Ctrl” while clicking HERE. The FAQ will appear in a new browser tab.

wordle of FAQ

Thanks to Wordle for the above “word cloud” of the FAQ

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T0-1 A Quick Way for an Organization to Adopt a Common Understanding of KM

October 10, 2009

A few years ago, CCLFI was helping in the KM training of the secretariat staff of the Davao City Chamber of Commerce and Industries. In one of the meetings I sat beside the Chairman of the Board. He was scheduled to give a talk during the closing ceremony to mark the formal end of the KM training project. He asked me what KM is all about and I explained it to him as simply as I can. I promised to send him on the next day a one-sentence definition.

During the subsequent training session, I explained to the secretariat staff what transpired between me and their Chairman. I asked them: can we formulate together the one-sentence definition and decide to adopt it for common use by the secretariat staff?

The result is the “KM Elevator Pitch” below. We called it an “elevator pitch” because you can quickly recite it to anyone inquiring about KM while you both ride an elevator. It must be so short but meaty that you have “pitched the ball” (delivered your message) by the time you emerge from the elevator.

Once formally adopted, the KM Elevator Pitch can also serve as the standard KM definition that everyone in the organization must understand and memorize, and be ready to recite to anyone asking what KM is all about.

Note that the sample KM Elevator Pitch below:

  • Covers all three types of intellectual capital;
  • Includes two basic action words or verbs: “source” and “deploy”;
  • States the purpose and benefit of KM.

Below is what I sent the Chairman of the Board on the next day.


KM elevator pitch

Note that there is an embedded link in this blog post. It shows up as colored text. While pressing “Ctrl” click on the link to create a new tab to reach the webpage pointed to.

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T3-1: Showing a Concrete Benefit of KM to the Knowledge Worker

September 28, 2009

A tendency when KM is introduced to an organization for the first time is that knowledge workers tend to look at KM as “extra work.” If this is how they view KM, regular work will win over any extra work, particularly if the periodic personnel evaluation system measures his/her performance only in regular work.

I use this simple slide to convey to individual knowledge workers a benefit KM can give them: they can finish their work faster. Most knowledge workers like this. This slide mentions five typical factors that affect speed of completion of work.

KM benefit for individual K worker

I use the above figure to drive home some points to clarify the meaning of intellectual capital and its three recognized components: human capital, structural capital and stakeholder capital.

  1. I include the third factor “support from boss and teammates” to show that effective action (the goal of KM) is affected not only by knowledge assets or cognitive factors, but also by motivational or affective factors. Therefore, these cannot be ignored in actual KM practice.
  2. The third factor is actually internal relationship capital, in contrast to stakeholder capital which is external relationship capital. I use this example to show that stakeholder capital – the usual third component of intellectual capital – is externally looking and miss out on an important internal factor that also affects productivity and effective action. Why do you think companies spend money on team building workshops?
  3. Notice, too, that the fourth factor “decision rules are clear” is both within the purview of quality management as well as knowledge management. I use this fourth factor to illustrate the fact that KM and QM overlap.
  4. The first, second and fourth factors are examples of structural capital while the last factor is an example of human capital.

You can use the above chart and ideas; if you do, please acknowledge me as its source. Thanks!

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Q28- Recap of KM Virtues and Gaps, or Will KM Disappear?

May 30, 2009

This Q Series had been a successful one; 16,267 hits came in since it started. We end this blog series with this summarizing post. To better appreciate an item that strikes you, I suggest reading the blog which explains that point. The blogs are accessible from this post through embedded links (which appear as colored text). While pressing “Ctrl”, you can click on the colored text to create a new tab to read the previous blog post referred to.

Virtues of KM and OL (organizational learning):

Gaps in KM and OL practice:

What we need next, a new KM or the next discipline after KM:

Q28 cartoon

We will start the new L Series on “Indigo Learning Practices” in the next blog. Stay tuned in!

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Four Types of Memory

May 7, 2009


Ken Wilber pointed out that there are four fundamentally distinct types of knowledge, which he calls the “Four Faces of Truth”. Based on his framework (see previous blog on “KM and Trans-Societal Megatrend #1 and “Tacit-Group Processes in KM”), we therefore see four types of memory:


Transactive memory is what a team informally develops among themselves after working closely together over time. The team informally develops a group tacit knowledge of “who knows what,” “who knows who,” “who does what best,” “who cannot do what,” “how team member A thinks,” etc. This transactive memory is lost to a team member who leaves and joins a new team.

Collective unconscious is Carl Jung’s term to refer to the accumulated experiences and memories of mankind. The collective “national pain body” and “racial pain body,” according to Eckhart Tolle, are accumulated memories of violence and suffering that underlie the consciousness and behavior of a group.

I have written about the “Organizational Brain” in my Overview chapter in the book “Knowledge Management in Asia: Experience and Lessons” published in 2008 by the Asian Productivity Organization, Tokyo, Japan. If you wish to receive a copy of this chapter, send me an email. In this book I used the descriptors “embodied knowledge,” “embedded knowledge” and introduced the new term “enculturated knowledge” for human capital, structural capital and relationship capital, respectively. In parallel, we can use the descriptors “embodied memory,” “embedded memory,” and “enculturated memory.”


In the next blog, I will use Ken Wilber’s framework to delineate important knowledge pathways in a learning organization, and provide a way to understand the specific knowledge pathway called the SECI model of Nonaka.

Thanks to for the free use of a clip art. (Note that there are embedded links in this blog post. They show up as colored text. While pressing “Ctrl” click on any link to create a new tab to reach the websites pointed to.)

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Towards a Global Balance Sheet

April 5, 2009

I compiled various estimates of entries in the expanded KM framework towards a global balance sheet.

Negative side (see diagram below):


Positive side (see diagram below):


What do we notice?

  • Total US federal debt exceeds the wealth (GWP) created by the world economy in one year.
  • The world is drawing from its natural capital at an annual rate about equal to the 2008 Wall Street meltdown.
  • Knowledge is our biggest and growing asset for creating wealth.

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March 6, 2009

Have you heard of the term “positive psychological capital”? There is a discourse among a group of researchers and practitioners who find a need to use this term. My Indonesian counterpart, Prof. Dr. Jann Hidajat Tjakraatmadja uses this term. He also uses the term “integrity capital.”

Other discourses revolve around other concepts such as spiritual capital, emotional capital, cultural capital, social network capital, political capital, and so on. I have written about social capital in this blog. There is a wider discourse and broader usage of the term social capital, and much wider on human capital.

The meanings of these terms are still evolving, but the common theme across these concepts is that these forms of “X capital” are creators of value. For example, Claridge spent three years examining the meanings of the term “social capital” in more than 500 peer-reviewed articles. He concluded that the common theme across them is “social relations that have productive benefits.”

To complicate the picture, researchers and practitioners from the life sciences are beginning to use terms such as biological capital, natural capital, ecological capital, biodiversity capital, environmental capital, etc. Ecologists clearly distinguish between “natural capital” and the annual stream of “natural income” that the former produces. A mango tree is natural capital, and the mango fruits it produces yearly constitute natural income. Again, the common theme across these concepts is that these forms of capital are such because they are creators of value. They produce annual income streams, just like the more traditional factors of production, namely, land, labor and capital.

Knowledge management researchers and practitioners added more terms: intellectual capital, structural capital (or process capital), relationship capital (or stakeholder capital or customer capital). The consistent underlying meaning among KM researchers and practitioners is that these “things” are all creators of value. They produce wealth. Customer capital contributes to a corporation’s annual income stream just as much as a mango tree produces an annual income stream for the farmer-owner.

It is becoming clear that the factors of production is not just land, labor and capital. There are many more factors that can create wealth other than the traditional ones taught in Economics 101. Psychologists, biologists, ecologists, sociologists, etc. are showing us these many other forms of capital.

Last March 2008, at the conference on “Knowledge Architectures for Development” sponsored by the Singapore Management University, we proposed the cross-disciplinal term “metacapital” to encompass all the various forms of capital. Here is a slide in my PowerPoint presentation:


What do you think?

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Practical Hint #16: Knowledge Transfer from Retiring Senior Staff

March 2, 2009

Let us apply to a practical situation the expanded KM framework presented in the previous blog post.

Suppose that many experienced senior staff will be retiring from your organization within 12 months. Much knowledge will soon be lost from the organization. As a result, the quality of strategic decision making would deteriorate. Some risks, less visible to junior staff, could materialize to actual loses. Opportunities could be missed. Productivity and revenues would likely suffer.

To minimize loses in this situation, you can transfer knowledge from senior retiring staff. The expanded KM framework suggests that we must pay attention to five areas:

1. Human capital: Mentoring of understudy (over several months) on —

  • How important decisions are made
  • Practice in performing critical phases of a business process, problem solving
  • “Tricks of the trade”
  • “War stories” e.g. about how past crises were successfully handled

The understudy must be selected considering non-technical skills required of the job such as ability to communicate, people skills, team player, etc.

2. Structural capital: Turnover of records such as —

  • Work folders and work files, emails archive, Internet bookmarks
  • Manuals, work templates and tools, problem-solution logbook
  • Important information sources, etc.

3. Relationship capital:

  • The senior retiring staff introduces the junior understudy to important external business contacts and internal stakeholders especially through informal or social occasions; this process can be repeated over several months until the external or internal stakeholders accept and trust the junior understudy to an extent that the senior retiring staff judges as sufficient for the junior understudy to take over the performance of relevant functions.
  • Turnover of telephone directory
  • Confidential briefing of understudy on personalities, strengths/weaknesses and relationship styles of key business, network and internal contacts
  • Membership in knowledge and other networks; log-in and password to company-owned subscriptions, networks, etc.

4. Tangible assets:

  • Company laptop or work station
  • Books
  • Company communication devices: mobile telephone, etc.

5. Motivational factors:

  • The understudy must be selected considering not only technical qualification factors but also personal interest or enthusiasm in the job, whether the job is along his chosen career path, whether the new boss and colleagues in the job are likely to support the understudy, and presence of a personal talent that will be better utilized in the new job.

The above formula must be adapted to the nature of the job. In marketing or sales, relationship capital is more important. In jobs requiring very specialized skills, human capital is important. Motivational factors are always important. In high-tech services, technology (which is part of tangible assets) is important.

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Practical Exercise #15: Ingredients of Effective Group Action

February 28, 2009

Let us go through an exercise of constructing a mental model. To ensure that we follow the wisdom of Gregory Bateson (see previous blog post by clicking here: Q16), we will proceed in this manner: start with data from personal experiences -> discern pattern from the data -> construct mental model including concepts. This scientific methodology is called “grounded theory” because you don’t start at “Cloud 9” but you instead start from the “ground” of experience in the real world.

From your own experiences, what are the ingredients of effective group action? (the question comes from the definition of “knowledge”; click here to see blog post F5)

Get a paper and pencil and please add to my list below:

    physical energy
    access to needed information
    support from outside
    financial resources
    empowering policies
    mental model
    trust on one another
    shared concepts
    common goal
    mutual support
    good procedure
    cash and incentives
    good system
    conducive workplace

    (Please add to the list from your experiences.)

Next, let us cluster them together. Do you agree with this grouping? Are the members in each group similar enough to warrant the grouping? Do the groups make sense to you?


Then, we place labels on the clusters or groups:


VOILA! We now have CCLFI’s expanded KM framework! The entries in green are motivational factors that cut across the tangible and the three intangible forms (see blog post D11):



  • In F5 we learned that “knowledge” is capacity for effective action (I had written on this in the Overview chapter of a KM book published by the Asian Productivity Organization; click HERE).
  • We saw that “know-what” (=knowledge) is not enough; it must be combined with “willing-to” (=motivation); I reported this in a KM conference last year at Kuala Lumpur (click HERE).
  • In F1 we saw that the expanded KM framework overlaps with the intellectual capital framework (Click here to download paper to be published by EADI/IKM).
  • We learned that intellectual capital has three (mostly intangible) components: human, structural and stakeholder capital, but we also saw that “stakeholder capital” and “customer capital” are too narrow, and must be broadened to “relationship capital” that also includes relationships within the organization (reported in our Singapore paper and also in my Overview chapter of the APO book).

A mental model is double-edged: a good one enables you to see the world better, but a bad one is like a blindfold or blinder that allows you to see only a distorted slice of the world.

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F7- Interactivity and Context

October 22, 2008

We saw earlier that knowledge is capacity for effective action.

Let us study the following observations about ineffective actions:

    1- An X-ray film enables a radiologist to make better diagnosis, but it is meaningless to a plant engineer. Specifications of a turbine enable a plant engineer to make design decisions, but it is meaningless to a radiologist. The right skill must go with the right information for effective action to result.

    2- A best practitioner fisherman tries to replicate his best practice in organizing fishermen to set up a marine protected area in another coastal community. He cannot duplicate the success he had in his home community. The right procedure does not work equally well in a different social or relational context.

    3- A winning BPI (business process improvement) team has been very effective in solving problems together and thus making many improvements over the last two years. After a team member transferred to another team, she found she could not work as well with her new team in similar problem solving sessions. Effective thinking together depends on good or well-established relationships; disruptions in the relationships reduce the effectiveness of a team. (Psychologists say the ease to retrieve knowledge within the context of team members who know well each other’s thinking styles and specializations comes from “transactive memory”.)

    4- Computers of the same brand and specifications were donated to school librarians in different locations in the country. After three years, some were working and others were not. The differences were found to be due to differences in availabilities of spare parts and skilled repairmen in the locality. The effectiveness of a technology depends on the socio-economic context within which the technology is embedded.

    5- An expert senior engineer who will soon retire was asked to take in an understudy who is scheduled to replace him after he retires. They were piloting a knowledge transfer process designed by the HR Director. The senior engineer and the understudy cannot work together due to differences in their working and thinking styles – something the two were largely unaware of. Frequent disagreements slowly led to erosion of mutual trust. After several months of trying, the senior engineer requested for a new understudy. Effectiveness of coordination depends both on right procedure and right relationship. The knowledge transfer process failed to consider differences in styles (incomplete procedure), which led to or worsened the relationship.

The implications are clear: effective action in any particular work context comes from the right combination of human capital, structural capital, relationship capital and technology (a tangible asset) suited to that context.

Thus, the impact of KM is attributable to the combination of knowledge assets, and not to any single knowledge asset. If knowledge asset A is added to an existing mix of knowledge assets B and C, the incremental improvement in productivity may be mistakenly attributed to A alone when in fact it was due to the interactive combination of A, B and C.

For example, let us say that a self-customizable and role-based portal was introduced in an organization’s intranet. As a result, the time spent in hunting for information was reduced by an average of 1.2 months per year per employee. Can we conclude that the company savings amounting to 1.2 months of payroll every year was solely attributable to the new portal? Maybe not. More precisely, the cost savings was attributable to the interactive or joint effect of: (a) technology (the new software), (b) structural capital (the configuration of each portal and the use of knowledge taxonomy tailored to each employee’s functional role) and (c) human capital (the skills of the employees in customizing and utilizing his or her own portal). Let me add: (d) the empowerment that accompanies a company policy of training and encouraging each employee to customize/personalize his/her own portal to suit his/her specific needs enhances motivation that contributes to the effectiveness of the portal!

Does this make sense to you?

By the way, the total economic impact is the present value of the annual productivity increments coming from use of the extra 1.2 months made available per employee. If this benefit is greater than the cost of the new portal and training of employees in its use, then the portal project was worthwhile.

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