The Wealth of Knowledge: Intellectual Capital and the Twenty‐First Century Organization

In his seminal work Intellectual Capital (1997) Thomas Stewart introduced us to the notion that the measure of corporate wealth should not be limited to hard assets. His discourse caused us to view “intangibles” such as patents, employee knowledge, and data in our corporate repositories in a new light. This new perspective opened our eyes to a substantial amount of potential wealth that lay dormant within our organizations.

In this most recent work, The Wealth of Knowledge: Intellectual Capital and the Twenty‐First Century Organization (2002), published by Nicholas Brealey of London, Thomas Stewart has done it again by showing us how to exploit these assets to generate alternative sources of revenue that heretofore were ignored. Stewart divides the book up into three parts:

1. 1.

   The Theory of a Knowledge Business;

2. 2.

   The Disciplines of a Knowledge Business; and

3. 3.

   The Performance of a Knowledge Business.

This book, although robust from a theoretical perspective, also concerns itself with the reality of turning knowledge into wealth. This is certainly refreshing considering the many books that have flooded the market that deal with the basic concepts of the discovery of latent knowledge in our organizations but do nothing to help us know what to do with it. Stewart accomplishes this in Part II by discussing the role that discipline plays in forging an organizational strategy that deliberately focuses upon moving intellectual capital into the marketplace.

As one would expect, Stewart is careful to distinguish between managing explicit knowledge – open, arranged, and explainable; and tacit knowledge – knowledge you have but do not express. Stewart also includes a section on what knowledge is not. This discourse appears to have grown out of the understanding that so much of what we have come to know as knowledge, through observation, practices, processes, gossip, etc., should be carefully examined to reveal whether valuable knowledge exists or whether we are filling our coffers full of mindless dribble with the unlikelihood of future returns. As with any new fad [sic], there are those who will push the envelope to the point of absurd and Stewart has not languished in pointing this out.

The third part of the book concerns itself with maintaining the intellectual value inherent in the human capital of the organization. Stewart discusses the need to minimize knowledge transfer through defections by connecting employees to the company beyond merely giving them a paycheck. These options include applying more effective training methods, rewarding employees with equity in the form of stock, and gainsharing tied to performance. Beyond financial rewards, Stewart reminds us to regard the value of community in our organizations as meeting social needs that strike at the foundation of satisfying work.

Finally, Stewart recounts the evolution of knowledge management over the last ten years as merely the tip of the iceberg. He goes on to imply the faddish nature of new understandings take time to show results: “Surviving fad‐dom is not a trivial accomplishment. I bet that so far more money has been wasted than made in knowledge management” (p. 327). But this is still just the beginning.

In conclusion, The Wealth of Knowledge: Intellectual Capital and the Twenty‐First Century Organization by Thomas A. Stewart is the next archival stepping stone to a greater understanding of the value of knowledge, and how to turn it into real revenues. This is a must read for those who desire to stay on the cutting edge of business in the twenty‐first century. I dare say that if you gain nothing else from this book, which is highly unlikely, it will be a sense of encouragement that the future of commerce is alive and well, but the way that we assemble strategies and create wealth will have to change.