The BUSINESS STRATEGY FoR managing intellectual capital in the new business environment

1. The BUSINESS STRATEGY FoR managing intellectual capital in the new business environment Audrey L. Chin 05 july 2012

2. Introduction : Knowledge Economy "The basic economic resource - the means of production - is no longer capital, nor natural resources, nor labor. It is and will be knowledge".

3. PROBLEM at Strategic Level • What is the first step toward survival in a new business environment, one ruled by intellectual capital?

4. Strategic Problem Details Very few individuals understand intellectual capital, and almost no one has been able, formally at least, to put a value on it . This is very difficult because “Knowledge” is somehow intangible, so how can an organization maximize the returns on investment in knowledge?

5. Strategic Solution : Knowledge Management That’s why KNOWLEDGE MANAGEMENT (KM)– how an organization makes use of its intellectual capital–is one of the greatest challenges facing senior managers today.

6. Challenges CEO • CEOs are responsible for justifying the value of knowledge constantly being developed in their organizations : from the capture, codification and dissemination of information, to the acquisition of new competencies through training and development, to the re-engineering of business processes.

7. Managing Intangible Assets ? • Present and future success will be more on the strategic management of knowledge assets. • This means that the capacity to manage knowledge is a critical skill, and perhaps the critical skill of this era.

8. REALISTIC Statistics on Knowledge Management

9. Actual Strategic Problem in new business environment • IDC, an international research organization, has reported that Fortune 500 companies wasted $12 billion by duplicating knowledge work in 2000, e.g., simultaneous search costs, parallel research projects.

10. Why KM is crucial in the new business environment • Recent studies conducted at the Institute for Intellectual Capital Research in Dundas, Ontario provide strong evidence that knowledge management programs incl. KM staff are not only becoming more prevalent but are resulting in tremendous cost savings.

11. Financial Benefits Knowledge Management Programs

12. The emerging role of the chief knowledge officer (CKO) • A chief knowledge officer (CKO) is an organizational leader, responsible for ensuring that the organization maximizes the value it achieves through "knowledge". • CKOs can help an organization maximize the returns on investment in knowledge (people, processes and intellectual capital), exploit their intangible assets (know-how, patents, customer relationships), repeat successes, share best practices, improve innovation, and avoid knowledge loss after organizational restructuring.

13. Future value–and job security–of the CKO placement/position

14. responsibilities of the CKO • Collecting relevant data that is useful for the organization as knowledge (extensive business experience needed to be able to determine which info is worth sharing ) • Developing an overall framework that guides knowledge management • Actively promoting the knowledge agenda within and beyond the company • Overseeing the development of the knowledge infrastructure • Facilitating connections, coordination and communications.

15. Requirements for a succesful CKO The CKOs claimed that in order to succeed in the future, they would need • more slack time for dreaming, thinking and talking, • more high-level support from CEOs and board members.

16. CKO Characteristics • Highly educated • Already a seasoned organizational performer and chosen for the knowledge management position based on their proven performance • A “researcher” … seeks new knowledge, likes to learn • Attracted to “being at the forefront of something new and exciting” • Motivated more by a challenge than by formal power • Receives intrinsic rewards from helping others … some altruism and/or evangelism • A risk-taker … sometimes a maverick • Sees knowledge management as a way to “make a mark within the organization”.

17. KM PROJECT #1 WITHIN THE INDUSTRY: APPLYING KNOWLEDGE MANAGEMENT as BUSINESS STRATEGY for DEVELOPING THE RELIABILITY CENTERED MAINTENANCE (RCM) in SURINAME

18. Targetgroup : Academics • Working Environment : Bureaucratic & Academic • Role : Researcher (Interdisciplinairy) • Conference Presentation of Research Proposal :“The Reliability Centered Maintenance Approach in Suriname” by Audrey L. Chin at the ADEKUS Research days • Business Strategy : A first step to a knowledge transfer system in technology and innovation for the academic community for commercializing their “academic research”

19. Targetgroup: Practitioners • Working Environment : Creative & Professional • Role : Change Manager in RCM • Change Managers must help build new practices and communities to bring about changes that will make a constructive difference : The (learning) Community of Practice in Reliability Centered Maintenance (RCM) consisting of RCM academics & practitioners • Business Strategy : The Community of practice as a first step for structuring & improving organizational learning in RCM

20. In Summary • Question :What is the first step toward survival in a new business environment, one ruled by intellectual capital? • Answer : Communities of Practices structures the organizational learning in RCM • If well developed, Communities of Practices becomes organizational assets – (intangible) knowledge assets which then can be managed • Only then can the CEO maximize the ROI in knowledge – KNOWLEDGE MANAGEMENT

21. Next : Implementing the Community of Practice in RCM in an organization