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	Intellectual Capital

	by Donald Ladew

Intellectual capital is KNOWLEDGE that can be exploited for some money-making or other useful purpose. Intellectual capital can include the skills and knowledge that a company has developed about how to make its goods or services; individual employees or groups of employees whose knowledge is deemed critical to a company's continued success; and its aggregation of documents about processes, customers, research results, and other information that might have value for a competitor that is not common knowledge.

WHY WORRY ABOUT INTELLECTUAL CAPITAL?

As long as this capital is only in the employee's head, not written down, video taped, put on whatever medium you chose, made available for distribution, the company that thinks it possesses that capital, is at RISK. If you are the manager of a small company, and you have just said to yourself, this isn't for me, please reconsider. In a way it is even more important. You may only have one employee with a particular SKILL. You lose him or her and you are well and truly up the proverbial creek. And if you are only thinking of intellectual capital in terms of some esoteric, patentable process you have developed, think again. Remember what happened when the gal who filled and setup the stamp machine was out with the flu and she was the only one who knew how to do it. It took three hours, ruined a roll of blanks, and took three people to figure it out. That simple, PRACTICAL task she knew how to do in five minutes is most definitely intellectual capital.

A TRUE STORY

Six months before I arrived to consult with a medium sized company that manufactured various products for the aviation industry, a new Chief Operating Officer came on board. He decided that a general belt tightening had to happen, and brought out the axe. Joe, a very clever senior engineer, had built an elaborate but sensitive pressure testing system to meet Federal Aviation Administration requirements. Then a Monday morning arrived and he found a pink slip in his in basket. He was given his two-week notice. He said, "Screw it," and went home. Three days after, this the pressure vessel test system failed. No one except the engineer who was now sitting at home watching 'The Days of Our Lives' and sulking KNEW how the system WORKED. There were some poorly written procedures but nothing that provided and in-depth explanation of how to align and maintain the system.

IT GETS EVEN BETTER…

Finally, the situation was so desperate that the Chief Operating Office called Joe and pleaded. "What do you want?" Joe said, "CONSULTANTS contract for two weeks at $300 an hour guaranteed regardless of how long it takes to complete the work, to be paid before I start." The executive had no choice. Manufacturing was piling up and customers were asking questions. As you might guess, it took Joe all of a day to fix everything and get the system recalibrated. Of course, you naturally would have had someone WATCHING every step Joe took to get things running again. You would have your videographer and tech writer in Joe's lap memorializing every step he takes. He wouldn't be able to breathe in without someone asking him, "Joe, why did you breathe in at this particular point of the process?" I am sorry to tell you no one was there to get this crucial data recorded.

MINING FOR GOLD

Joe was a RESERVOIR of intellectual capital. This particular company had many people like him. Every company that I have ever worked with has people like Joe, at every level and department of the organization. And every company I worked with had to REINVENT some wheel that had already been nicely designed because no one bothered to get that intellectual capital out of Joe's head and into the company's bank. There are many well thought out methods to accomplish this most important task. It's very expensive not to have your own bank filled with the intellectual capital you have spent thousands, even millions to develop.

Donald Ladew has traveled and worked all over the world. He spent many years as an aerospace engineer. He works as a technical writer and trainer -- and is the author of a best selling business book entitled "How To Supervise People". Visit his website at www.author-ladew.com or contact him at .

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