THE IMPORTANCE OF INTELLECTUAL CAPITAL

During the Industrial Age, a firm’s physical assets—such as machinery, plants, and even land—determined how strongly it could compete. In the current “Knowledge Era,” intellectual capital is what defines a company’s competitive edge. Intellectual capital is the unique knowledge and skills that a company’s work force possesses.

Today’s successful businesses win with innovative new ideas and top-notch products and services—all of which originate in the knowledge and skills of employees. Examples of people who possess intellectual capital include computer programmers, network engineers, technical designers, CPAs, and direct-marketing analysts.

Other possessors of intellectual capital are:
• Mid-level managers (they know whom to contact to get things done)
• Top-level executives (they have years of business savvy and industry knowledge)
• Strategic-planning/business-development professionals (they know how to do competitive and other forms of analysis)
• Human resource professionals (they understand recruiting, employment law, compensation, and other critical employee relations issues)
• In-house legal counsel (they understand intellectual property, securities, and other areas of business law)

Whenever employees leave, the company loses their hard-won knowledge and (often expensively) acquired skills. When those employees go to a competitor, the loss is compounded. Not only has their firm been deprived of an important part of its knowledge base, their competitors have gained it—without having to invest the time and dollars in training that they may have invested.

- Precious Ohaegbulam (@prsh9 / precious_ohaegbulam@yahoo.com)