The rise of intangible capital

“Intangible capital” has a dark side. If you are a risk averse NED or ED, what shouldn’t go home at the end of the day?


Intangible capital (IC) is the collective value of people, processes, systems, knowledge and relationships.


According to a global economic study in 2014, 59% of Australia’s GDP comes from our national intangible capital and most of this is from humans.


You already know knowledge, connections and collaboration drive a fair chunk of organisational performance in the information age.


“Human capital” is the talent, competencies and experience that goes home at night. (German un-word of the year in 2004!).


Intangible capital includes “structural capital” such as processes, software, IP and documents. These enable competitive advantage.


Structural capital stays behind when employees go home at the end of the day ... except you’ll see its dark side when:


> Siloes hoard information to protect turf


> Key people leave, no-one knows what they did


> You can’t find a document when you need it


If your structural capital goes home at night in people’s heads - the organisation is at significant operational and compliance risk.


If you manage knowledge properly to avoid the risk, you sleep better at night.


Life's great,


Bruce

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