The Wealth of Knowledge

Thomas Stewart was one of the business writers who launched the first stage of knowledge management with the release of his book Intellectual Capital in 1997. In this new book, he collects and organises the wealth of learning about KM that has occurred in the last five years into a cogent argument and a blueprint for a knowledge-enabled company.

Outline

Part one establishes ‘The theory of a knowledge business’ and the case for knowledge management, examining evidence that the knowledge economy is squarely upon us and that companies no longer exist outside of how they manage and leverage knowledge.

The practical core of the book is part two, ‘The disciplines of a knowledge business’, in which Stewart articulates and then expands on a four-step model for an intellectual capital strategy:

• Identify and evaluate the role of knowledge;
• Identify knowledge assets;
• Develop a strategy for investing in and exploiting intellectual assets;
• Improve the efficiency of knowledge work and knowledge workers.

This is a simple, useful model that Stewart uses throughout this section to emphasise the importance of KM practices. Stewart provides success stories of the application of KM disciplines (communities of practice, information infrastructure, leveraging internal knowledge as a knowledge product) that support each of these steps.

“Measurement... is a worldview, not just a scorecard,” he writes. Models for valuing and tracking intellectual capital and knowledge assets have been around for a while, but most companies have yet to adopt them. Stewart, though, believes the time for this is near: “Calls to revamp accounting, lonely cries in the forest just a few years ago, have become full-voiced howls within sight of the campfire.”

The third and final part of the book, ‘The performance of a knowledge business’, suggests very specific financial accounting models for each of the four aspects of the knowledge business strategy.

Analysis

Stewart is a passionate, articulate and witty proponent of the idea that knowledge is ultimately the only source of competitive advantage left for companies, and he speaks in the language of business. From his influential seat on the board of editors for Fortune magazine, Stewart is a credible advocate for KM and here he draws on the experience of many of the discipline’s leading practitioners to illustrate that the shift towards becoming a knowledge economy has largely already occurred. In so doing, he presents the case for strategic knowledge management, which leverages and applies the core disciplines that have matured over the past five years.

KM practitioners will discover that this book reinforces the value of a broad set of knowledge management capabilities in the practitioner’s toolkit. What’s great about reading this book is that it is like eavesdropping into a conversation in which Stewart is explaining knowledge management strategy to executives, as in the following paragraph: “In particular, knowledge companies must know how to select, design and manage knowledge projects, which increase the value of knowledge or change the way a company uses it. Collecting best practices is a knowledge project: it gathers previously uncodified data, analyses it and turns it into a piece of structural capital.” Brilliant. 

  

Readership

This is the knowledge management book you will want to give to a senior business leader in your organisation when you are looking for sponsorship for a KM programme. Leaders will understand what you, as a KM practitioner, care about, what you do and why it is important. They will begin to understand the implications for their own leadership aspirations of operating in the knowledge economy, they will know what knowledge management has accomplished over the past five years and (best of all) they’ll start to learn the language of KM. In fact, it’s a great book for anyone who likes a good KM read. What can you say about a book that throws away lines such as “…like pearls, knowledge assets form around irritants, such as real business needs”?

Verdict

Read it and pass it on. The key message put forward by this book is that managers, KM practitioners and consultants must make the shift from seeing knowledge management as an IT initiative to regarding it as a business imperative. Stewart documents this shift in a readable mixture of data, history and insight – and gets at the knowledge component in business by tackling the questions of what companies do and why they exist. The answers lie in a company’s ability to understand the knowledge component of its business: “If you’re not managing knowledge, you’re not paying attention to business.” Such messages should renew and revitalise those people who are committed to KM.