Saturday, May 31, 2008

Create Your Own Intellectual Capital

Are you Aware of your Intellectual Capital?
T. V. Rao

Intellectual Capital is Intellectual Material- Knowledge, Information, Intellectual Property, and Experience – that can be put to use to create wealth.(Thomas Stewart, Journalist, Fortune 1994).

The intellectual capital of the individual includes: (A) his human capital primarily consisting of his internals strengths in terms of knowledge, skills and other forms of talent or competencies(attitudes, styles, traits, habits, practices, beliefs, values, motivations, self concept etc.); (B) structural capital in terms of his employment history, accomplishments, experience, inventions, and every thing else that determines his market value and image and (C) image capital he/she has as a professional in the profession, in the institution or the agency where he works, as an individual in the society or the community where he lives.

What promotes Intellectual Capital?

Clear objectives in life and articulated thoughts about what he wants to do and how he likes to enrich his internal strengths, structural capital and image
High activity level that enables his to put to sue his intellectual capital or acquire more of it
Concussed work in terms of putting to use the intellectual capital already acquired
Good professional, social networks and partnerships including professional co--workers, loyal customers or clients, students, and others who like to be in networking relationship with him
Reputation and image in connection with the community that creates brand for him


Managing Talent and Managing Knowledge have become imperatives of the new millennium. Valuing and quantifying intellectual capital becomes the greatest challenge facing talent management and self management today.

Execution and converting intellectual capital to economic capital or financial and other forms of physical capital becomes and important part in today’s context.
Some people have a large amount of intellectual capital. Unfortunately they do not put the same to use. Some people spend their life time acquiring intellectual capital. They are walking encyclopedias but do not put any thing they have to use. Some times they themselves are not aware of what they have.

What is you Intellectual capital? Assess or at least document your own Intellectual capital using the following guidelines. You will need several days to complete. Once completed keep updating it. Take the help of your close friends, boss, juniors, seniors and your 360 team and strangers you some times come across to keep filling this table of your intellectual capital.


Human capital : Internal Assets or Strengths

Knowledge Capital: List all the knowledge you have using all specifiable knowledge. This may run in to several pages. Only go the desired level of specificity you think will help others to know you. (Example knowledge of anatomy, knowledge of statistics- can calculate coefficients of correlation or do factor analysis knowledge of SPSS, or knowledge of methods of pricing product, knowledge of sources of working capital etc.)

Skill Capital : List all the skill you have or all that you can do skillfully and the level of proficiency (can design assessment centers, create simulation exercises, do language editing, perform minor surgeries like…, design and upload web sites, diagnose the problems in a lap top or service PCs, etc.)

Value capital : List what you consider as your values which are your strengths (for example Integrity is my value and others do not have to waste their time to find out if I mean what I say and I can be relied up on to carry out or at least try my best to carry out my promises or verbal statements or I value service and am therefore willing to put hard work if the activity is service driven)

Motivational capital : Highlight significant motives you have that drive you to work (example achievement driven, affiliation driven, inclusive0

Emotional capital :Highlight your general emotional state and those emotions you have which help you to convert you knowledge and other skills in to work and generate other forms of physical or intellectual capital

Self Concept : What is the self concept you carry. How is it an asset to you?
Other forms of Human capital : traits, habits, practices etc.

Structural capital

Education History and accomplishments

Employment history and experience gained

Other accomplishments which form structural capital including patents, papers, books published, awards etc. that from a part of your CV

Social or Image Capital
Image in the profession

Image capital in the organizations you serve (including past organizations)

Image capital in the society or community where you live


Networking capital (professional. Organizational, community, friendship circles and other networks which you are a part)

HR Interventions as Intellectual capital Building Exercises

A line manager spends on an average 2,000 hours or more in year for the organization where he works. If your work life is 35 years there is a total of 70,000 hours of work life. That is all a manager has, to build his intellectual capital and cash it. In the first ten years one has to build one’s intellectual capital to a good degree and latter begin to cash it while multiplying the same.

When a manager sits with his junior and planning his work he is building his won intellectual capital and also is helping his junior increase his intellectual capital. Knowledge of the work done by one’s juniors or seniors, knowledge of the processes used in carrying out various activities, review of the activities and processes, which of them work and which of them do not work are all parts of intellectual capital formation. When we communicate with each other around work and activities as well as around the other aspects of the society we are enhancing our intellectual capital. Not all activities may result in intellectual capital formation but planning work, understanding the work of others, understanding effective strategies are all ways of building intellectual capital. If you understand this context the importance of HR tools in building one’s intellectual capital becomes well understood. I see PMS as a legitimate opportunity to build one’s own intellectual capital. Imagine a territory Manager of a FMCG company supervising about twenty five sales officers in different areas or branches. If he has quarterly meetings with each one of his sales officers and each meeting listens to each one of them for half an hour he learns about many things in the area about customer preferences, business opportunties, competitor strategies, pricing and so on many variables. This gain of knowledge is knowledge capital formation. Using the performance review discussion he also builds his experience and expertise as an area supervisor or as territory manager. In addition the information he so gathers in performance planning about the activities and plans of his junior’s hen is able to monitor the performance of his sales officers and gain experience as an area manager. Thus every line manager ahs an opportunity to plan his work, focus on priority areas learn from his juniors and seniors, solve problems experiment and do a number of things in a legitimate way. This is intellectual capital building. If a manager uses the performance planning and review.
Performance planning and review or Performance Management system is an Intellectual capital building system. I wish mot line managers realize this.
360 feedback enhances our intellectual capital formation through enhanced self awareness and recognition of strengths to leverage. It enhances our perceptual sensitivity. If used properly 360 feedback may lead to enhanced planning for leveraging one’s strengths and planning improvements on other areas. This is a direct addition to our intellectual capital.

Similarly training programs and other learning opportunties provided by our organizations re intellectual capital formation. Job rotation ads to knowledge and skills in new areas and are direct contribution to intellectual capital formation.
Feedback from Assessment and development centers add to intellectual capital formation. If I have to rank various HR processes or tools that organizations make available to the line managers the most intellectual capital adding activity is performance management system. This is followed by job rotation. In my view third in the lit is 360 Degree feedback followed by training. The next in line is the Assessment and development centers. A manager who learns to use PMS as an intellectual capital building opportunity will be less bothered about whether his performance appraisal resulted in annual increments or incentives. It is only those who fail to learn from others will seek incentives for planning their performance and rating to assess how he translated his intellectual capital during the year to other forms of capital for the company.

Next time when you examine a HR tool ask your self how much it can be a means to add to your intellectual capital. When you build your intellectual capital you always have a choice of cashing it. If your current organization does not enable you to cash it you always have an alternative if only you have built your IC...

T. V. Rao

No comments: