So how can we unite and push towards achieving IC as part of an organizations thinking?

Two parts to this. Here is the first part.

We all know that innovation is hard to measure.

Assessing innovation capabilities can be particularly hard as they are made up of so many intangibles. We need to frame these capabilities in much better ways, as they mostly remain shrouded in mysteries to render it difficult to know what each business actually needs to  invest in, to achieve their goals. Knowing what and where they need to improve their innovation capabilities becomes a critical need to know point for gaining unique competitive advantages.

So much of innovation activity is left to chance and it leaves all involved as vulnerable, open to being beaten to the next ‘big’ innovation breakthrough. I would strongly argue that organizations should build their innovation capabilities in systematic ways, yet few do, let alone understand what this truly means. We simply need too.

Understanding the ‘beating heart’ of organizations

One of the biggest gaps is trying to put a finger on the pulse of what makes up innovation. So much of the capabilities are intangible, locked up in those intellectual capitals of the organizations. Those that center on  people, their networks and relationships, the make-up of the structures that support their activities or restrict them, the ability of applying good or bad practices, the every day routines of each of the individuals that work within the organization.

These touch the very nerve center of organizations; you are striking at the very core of organizations, those intellectual combinations they make up so much that determines organizational performance. They expose or they enhance organization performance.

To some degree management wants to be able to measure these intangibles but it also can provide some ‘chilling and damning’ evidence of inefficiencies and managements lack of ability to really improve internal performance, let alone market performance. It is usually the external factor, of poor market performance, kicking in that galvanize the need for internal change. This then becomes reactionary, often too late and market advantages can quickly dissolve.

Where the future beckons is that Knowledge-based capital needs fully capturing.

The critical need today is to capture the rise in the importance of all the knowledge-based capital aspects. Business organizations are recognizing knowledge-based capital.

Knowledged based capital

Knowledge-based capital is critical. As shown above it is becoming more important than the product. Organizations are recognizing the value of knowledge. How do we capitalize on this grwoing recognition in ways that the management of organizations can relate?

Part two outlines one specific suggestion

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Comment by Paul Hobcraft on November 18, 2013 at 3:21am

Nick,

Thanks, I know you share this need to find a decent solution. I think if one could find the opportunity for a grant, we might be able to bring everyone on the same platform and 'drive' towards the same objectives.

My concern, there is an awful lot of work out there, too much actually all offering different, sometimes conflicting solutions. Organizations hate uncertainty, they look towards a concensus model, irrespective if it is not the best, to begin to work around. So many opinions just 'muddy' the corporate waters

We do need this united position and firstly stop looking at it from our 'discovery' objective and more from the corporations stand point. Start there in what 'we' have learnt and then work back to 'stated' positions, gel around one and then push back into the corporation to learn about.

It is a shame all the exceptional pioneering work both in the US and different parts of Europe still do not seem to coalesce although I bet there has been a fair few doctorates attempting this.

Challenging to develop is more to do with established positions and that is hard to alter.

Comment by Nick Shepherd on November 17, 2013 at 4:45pm

Paul - I really like your comments and thoughts and thank you for focusing on the OECD report which I had not looked at. I agree that we need to try and figure this out and it is likely to be a) more narrative than numeric, b) not part of any financial records and c) challenging to develop! Some of the work some years ago by Baruch Lev at NYS University focused on trying to value the difference between an earnings stream from tangible assets and the notional premium from intangibles. There are some great thinkers out there all trying to figure this out. Maybe we should try and engage with some of them. Tom Stewart also wrote some great stuff some years ago on Intellectual Capital and Knowledge Management and Dr. Ken Standfield of the International Intangible Management Standards Institute has also done a lot of work. Wonder if anyone would provide a financial grant for us to get a team together to try and come up with a position?

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