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Intellectual Capital: Realizing Your Company's True Value by Finding Its Hidden Brainpower
by Leif Edvinsson, Michael S. Malone (Contributor)

Table of Contents

Foreword

1. The Hidden Roots of Value

2. The Hidden Capabilities of a Corporation

3. Finding Its Way

4. Navigating Through a New World

5. Real Value: The Financial Focus

6. Real Worth: The Customer Focus

7. Real Work: The Process Focus

8. Real Future: The Renewal and Development Focus

9. Real Life: The Human Focus

10. All Together Now

11. A Common Value

12. A Future Market

Notes

Index

Reviews
Amazon.com
In a corporate world where true value is no longer determined by physical assets alone, but instead by a combination of material and nonmaterial resources, businessman Leif Edvinsson and journalist Michael Malone propose a new way to bridge the gap between balance sheet and organizational reality. In Intellectual Capital: Realizing Your Company's True Value by Finding Its Hidden Brainpower, they explain why today's companies must take intangibles seriously--and how to measure them so they can.

From Booklist , March 15, 1997
It has always been recognized that many of a company's assets--good will, reputation, and patent rights--are intangible. In today's knowledge-based economy, perhaps the most important asset of all is an intangible the authors call "intellectual capital," but traditional accounting systems are not designed to set values on skills, knowledge, and information. Edvinsson is director of intellectual capital for Stockholm-based Skandia Group, a large financial services company. He has pioneered the effort to account for intellectual capital by releasing an annual report on Skandia's knowledge assets. Here Malone, who was co-author of the acclaimed Virtual Corporation (1992), and Edvinsson distinguish the two subgroups of intellectual capital: structural capital, such as business partnerships or customer loyalty, and human capital, such as employees' key competencies. They argue why it is so important to measure these assets and provide guidance to do so. While many new books only promise groundbreaking ideas, these authors actually deliver! David Rouse
Copyright© 1997, American Library Association. All rights reserved

Upside Magazine, Jonathan Littman
In 1991, co-author Leif Edvinsson took on the enormous task of identifying and enhancing intellectual capital in a division of Skandia, the Swedish insurance company. He developed a methodology that centered on five basic focuses: customers, processes, renewal and development, human factors and finance. In this book, Edvinsson proposes intellectual capital reporting as a new accounting tool as well as a new way to manage. Much of the book is devoted to details of how to prepare an intellectual capital report, with numerous real-life examples from Skandia.

A reader from Bangalore, India , June 18, 1999 
Interesting journey into the hidden assets of organisation
The hidden truth of harnessing knowledge within the organisation has been lucidly explained. This is of more relevance in the present IT revolution, where the synthesis and analysis of domain knowledge plays a crucial role. Ultimately this intellectual capital is what makes a country strong in economy. In a sense this can also be linked to collapse of the Asian market (Asian tigers) which was just a production economy, but not an intellectual economy. The policies in these economies in hand with the conglomerates never gave an opportunity to harness the human capital, which was a serious drawback.

Public policy makers, governments etc., should make a note of this. It is not just important to open up the economy, but it should give a serious try to harness its underlying human capital.

A reader from Panama, Republic of Panama , August 27, 1998 
An Accurate Approach to Intangible Assets
This is an excellent books that explains how to fill the gap between the book value of corporations and their market value. This gap, represents the bulk of a company's real assets which consists of organizational knowledge, customer satisfaction, product innovation, employee morale, patents, and trademarks. However these so-called "intangible assets" never appear in financial statements. That explains why they are often overlooked and under managed.

In a straight forward language and concepts, Leif Edvinsson tackles the real source of wealth creation in today's learning corporations. He defines what is really meant by "Intellectual Capital", how it is classified, how it is measured, and how it can be used to create wealth to stockholders.

In today's rapid changing and turbulent technological environment, this book is an essential reading for those managing any kind of organizations today. Many CEOs are finding the hard way, that Intellectual Capital is transforming the nature of doing business by establishing the real value of enterprises for those who manage them, work in them, and invest in them The result is a whole new way in performing in an emerging information economy where brick and mortar corporations certainly are out of place.

A reader , August 10, 1998 
The book does not live up to its promise.
This should have been an article. It is good to learn what Skandia has done to supplement its financial statements, but the book is repetitious and replete with slogans, platitudes and exhortations. Prospective readers would be better served by Relevance Lost (Johnson, Kaplan), Cost & Effect (Kaplan, Cooper) and The Loyalty Effect (Reichheld).

Edvinnson/Malone start with the obvious fact that a firm's balance sheet equity, usually, is far less than its market value. From that, they suggest that investors and managers need better information about IC to make wiser investment/operating decisions. But they do not follow through on this useful line of thinking. I would like to have learned how Skandia selected its metrics, whether it believes it has made better operating decisions because of them, and whether the metrics help to predict Skandia's cash flows or its market value. It also would have been interesting to learn how the metrics relate to the creation, use ! and consumption of IC in the specific things a firm does to turn inputs into revenue.

A reader , April 13, 1997 
As an MIS professional - this book is my new mantra!
Outstanding. This book is the edge! If capitalizing on your company's information assets through the use of technologies like data warehousing and intranets is the leading edge - then intellectual capital is the BLEEDING edge. If your organization - your people - are what's between you and your goals then you MUST read this book. Talk about a check in perspective - its not about information, its about knowledge and know how. That's advantage! I'm just blown away.