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The New Organizational Wealth : Managing & Measuring Knowledge-Based Assets
by Karl Erik Sveiby

Synopsis
This groundbreaking book offers practical advice and rules of thumb for designing a business strategy that focuses on knowledge as an intangible asset. In eight chapters, Sveiby assembles a veritable toolbox of knowledge-based management techniques to enable managers to meet the new business challenges of the coming century. 28 charts; 16 tables.

The author, Dr. Karl-Erik Sveiby, http://www.sveiby.com.au , October 16, 1997
How I "discovered" Knowledge-Based Assets
This book is a milestone on a continuing journey I began in 1979, when I left the secure, well managed, orderliness of Unilever, to hazard my luck, and my career in what was, for me, the alien world of financial analysis and publishing. I joined a group of friends as a partner and manager to buy the fledgling business weekly, Affarsvarlden. There were 10 of us at the time. When we sold the company in 1994 we were 160 people and the company was one of Scandinavia's largest specialist publishing groups.

In 1979, I had no idea what I was letting myself in for. At the time I still believed "real" companies had formal structures, managers were in control, output was visible, and the balance sheet gave a reasonably accurate account of the value of business.

When I realised that the conceptual tools I had acquired in my earlier career were useless, I decided I had to start again, with a blank sheet of paper. My curiosity about the nature of the organisation I had become part of, led me to seek out and interview leaders of similar companies who had been compelled, by their lack of tangible substance, to pay much closer attention to their intangible, knowledge-based, assets.

I began to realise that what distinguished such people most clearly from their counterparts in manufacturing firms, was their different perceptions of their businesses. They took little notice of the "financials"; they were more concerned about their people, their networks, and their image among their customers. And it was clear that the number of leaders who saw their firms in this way, was growing rapidly.

I believe that managers in some of the fastest growing and most profitable businesses, focus on knowledge, see their businesses from a knowledge perspective and act as if their knowledge-based assets are more valuable than their tangible assets.

While managing my own firm, I have been researching how to manage knowledge and how to measure knowledge-based assets for fifteen years by now, and my work has inspired a number of European companies to manage their firms as "Knowledge Organizations" and to monitor their performance according to the principles outlined in this book.

I hope that you'll enjoy the book and please visit my web site for more information and some software tools to start working with!

Table of Contents

Preface

Pt. 1. The Era of the Knowledge Organization

Ch. 1. The New Wealth: Intangible Assets

Ch. 2. Tapping into the Limitless Resources of the Knowledge Era

Ch. 3. What is Knowledge? What is Competence?

Ch. 4. The Key Activity in Knowledge Organizations: Transferring Knowledge

Pt. 2. Managing Intangible Assets

Ch. 5. The Four Power Players in the Knowledge Organization

Ch. 6. Keys to Developing and Utilizing Professional Competence

Ch. 7. Building Internal Structure to Support Knowledge Transfer

Ch. 8. Improving Efficiency and Effectiveness through Internal Structure

Ch. 9. Managing External Structures to Maximize Knowledge Assets

Ch. 10. Comparing Knowledge-Focused and Information-Focused Strategies

Pt. 3. Measuring Intangible Assets

Ch. 11. The State of the Art of Measuring Intangible Assets

Ch. 12. Measuring Competence, Internal Structure, and External Structure

Ch. 13. Implementing Systems for Measuring Intangible Assets

Notes

References

Index

About the Author

Reviews

A reader from Pepperdine Ed.Tech. doctoral program , May 13, 1999 
Tangible categories for measuring intangible assets.
Karl Sveiby does an excellent job of breaking down the measurement of intangible assets into 3 manageable categories, employee competence, internal structure, and external structure.

One of the best aspects of Sveiby's writing is his summaries and advice for managers at the end of each chapter. This provides succinct advice on how a manager should operate in a knowledge environment and continue to be successful. Sveiby does a nice job of pointing out the differences between traditional "old school" models of management and organizations versus today's knowledge organizations.

Sveiby's action plan for implementing and measuring a knowledge-focused strategy at the end of the text in table format could prove to be one the best tools in measuring a knowledge initiative.

A reader from Cypress, CA , April 28, 1999 
This book presents methods to determine intangible assets
Currently, I am doctoral student in an educational technology program at Pepperdine University, Culver City, CA.  I have written a review on this book since it relates to my areas of studies.

Presently many companies are trying to determine their organizational wealth. Most companies try to measure their organizational wealth only based on visible quantitative and qualitative assets. Regardless of what method is used or what organizational effectiveness model is utilized to determine organizational wealth, the fact remains that only visible assets are used. This of course results in many organizations to question their method or approach to determine their organizational wealth. Moreover, the problem is perpetuated when organizations benchmark each other using similar methods of limited as well as restrictive quantitative and qualitative visible assets to determine their organizational wealth. Therefore, organizational management squabbles that the millions spent to determine their organizational wealth was a wasted effort because only visible assets were measured. Hence the questions remains, is there a better method to determine organizational wealth? The New Organizational Wealth written by Karl Erik Sveiby provides realistic tools and methods for organizations to determine and manage a knowledge organization. Moreover, this book presents an overview for organizations to measure their worth using intangible assets. This book clearly explains that by using intangible assets to determine organizational wealth based on employee's talents and strengths, customer support and partnership, as well as supplier's reliability and integrity make intangible assets the most value to the company. Overall, this book has several case studies that show when an organization measures intangible assets result is long-term success.

A reader from Brisbane, Australia , March 24, 1998 
Great distilled thinking, well reasoned with many examples.
Knowledge Focus Managers in some of the fastest growing and most profitable businesses focus on knowledge, see their business from a knowledge perspective, and act as if there intangible assets are real. (p x) So many companies have intangibles exceeding the value of their tangible assets, e.g. Telstra 90% intangible. This can be tracked by the share price v book value. But what of the businesses that do not have a share price e.g. private businesses, public sector organisations etc. Intangible Assets Sveiby identifies three major classes of intangible assets:Employee competence, Internal structures, whereby competence may be transferred from employee to employee, and External structure, including goodwill, relationships with customers. Sveiby considers the management of the intangible assets critical in managing the business, where the intangible assets are significant. He suggests using indicators of movement over time, rather than absolute values of the intangibles. Suggested indicators are classified into three types:I indicators of growth/renewal;Indicators of efficiency;Indicators of stability. Measurement of employee performance is split between the professionals (e.g. doctors, engineers, accountants), and the support staff. There is a continual blurring of this distinction. The real difference is the professionals are revenue generators, and the support staff are not. But the support staff do contribute significantly to the creation of value in the business through their impact on internal and external structures. Suggested indicators are provided for each type of intangible and for each indicator. To many to list. Read it and see. A few to tease you with: %big customers,age structure, devoted customer ratio, frequency of repeat orders) The arguments Sveiby uses are based on his observations, and logic that makes his conclusions all the more powerful.

A reader from United States , November 2, 1997 
An in-depth provocative exploration of intangible assets
Karl-Erik Sveiby is one of the foremost thinkers working in the field of intellectual capital. His hands-on experience in working with intangible asset creation lends insight and practical application to a profound new way of thinking about value. Anyone who is ready to welcome a new way of thinking about value and corporate performance measures will benefit greatly from reading this book. Verna Allee, author The Knowledge Evolution