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Intellectual Capital

Summary: 

Intellectual Capital+ is much more than any of its physical manifestations (e.g., patents, trademarks). It’s greatest wealth is found mostly in the minds of its creators. We exploit this wealth by packaging those minds into Investible Units+, which in turn are packaged into a community of Investible Units.

Intellectual Capital+ – the new economy. A corporation's value is not found in bricks and mortar, rather in the skills and capabilities of its people. Show me the bricks and mortar of a Paypal or E-bay?

Property records (repositories) for Intellectual Capital are rightly viewed as a graveyard for dead capital. They capture the tangible, ignoring the much more valuable intangible components. Intellectual Capital remains dead until further packaged into a team, a mandate, a budget, a strategic direction and a sense of mission. The knowledge of how to commercially exploit Intellectual Capital, which in itself is not patentable, is where the real value lies.

Intellectual capital is much more than intellectual property. It’s much more than patents, trademarks, trade secrets, manuals and procedures, databases, software, etc. It’s more than what is commonly captured in asset property records. The very name reveals its true nature, wealth within the mind. We sell intellectual property. It’s the basis of a thriving industry.1 But Intellectual Capital is where blockbuster+ wealth resides: the attitudes, the unwritten procedures, the knowledge of paths not taken and dead-ends not to be retaken. The wealth of Intellectual Capital resides within the minds of the team responsible for its creation.

We could purchase the minds behind the Intellectual Capital by attaching covenants to the purchase of its tangible components. But we can’t capture the passion, the spirit, the intensity within those minds. These later formed in a milieu and are often impoverished when removed from that milieu. For example, skunkworks+ often take much of their energy from their outsider role: the deceit, the secret handshakes. Formalize these denizens and you often lose the essential spirit of the team.

Instead we package Intellectual Capital into Investible Units+ – a more cohesive solution. We explore what it takes to make each Investible Unit successful as a stand-alone business. We take the skunkworks and let them continue what they were doing, albeit in a new building. Keep the teams together that created the Intellectual Capital. They give the best chance for its commercial exploitation.

Investible Units become even more successful when they belong to a vibrant community of Investible Units. This is our perpetual community. We have a vast store of prior knowledge. We have at-hand many Investible Units in similar states of development. We have a team of specialists who work across Investible Units making each one of them more successful, through shared lessons learned and comparisons across Investible Units. We share sources and uses of funds, minimizing financial disruptions. Investible Units have at their disposal all the success assurance+ supports provided by the funding agency+, including those they themselves may later identify as necessary.

Intellectual Capital comes alive when it can take one dollar and generate many multiples of that dollar. It attracts infusions of operating cash allowing it to invest into becoming a capital-generating machine. This happens much more readily in a community dedicated to finding, nurturing and continuously advancing these kinds of assets. Each new instance of Intellectual Capital is an unknown, but the reputation from the community rubs off allowing each new member to move ahead much more assuredly. Investors (and investees) transfer the full faith and credit of the community to its denizens. The community becomes the capital-generating machine, with Investible Units as its operating arms.


Editor's Picks for September, 2011

  • 1. IBM and Kodak make billions in licensing fees, a fact touted to sell you an intellectual capital consulting engagement so you too can make billions. Instead you end up building a land registry populated with worthless junk.
Further Reading
Reba Tull
Offline
Joined: 03/30/2011
Instructive, but not very actionable

Instructive, but not very actionable.