The Next Economic Paradigm

Tag: knowledge assets

A Clear and Present Value!

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Clear and Present Value

The value of conversations is real, clear and present – especially in the actions of those who profit wildly from them. I saw this in the negotiations of NAFTA when it was clearly in the best interest of the some negotiators to keep engineers poor weak and disorganized.

I saw it again in corporate America.  Imagine if Boeing was to publish a complete accounting of the incredible intellect, ingenuity, talent, and creativity that roams their hallowed halls – the world would dismantle them piece by piece.  The “knowledge inventory” is a company’s most closely held secret.

Keeping secrets from the secret:

Sometimes it seems that the biggest secrets are held from those who represent the greatest real value. Corporations pay their engineers the minimum amount of money required to get them to their desk in the morning.  Then they resist organization of engineering professionals, and they give them little or no power over marketing, human resources, accounting, and sales promises related to the engineering outcome.

The problems get worse when this big “secret” becomes public. For example: Steve Jobs has now been identified as trying to collude with Ed Colligan, the CEO of Palm, to not poach each other’s employees.

A Currency Collusion Collision Conversation

“Your proposal that we agree that neither company will hire the other’s employees, regardless of the individual’s desires, is not only wrong, it is likely illegal,” Colligan said to Jobs last August, according to an article Bloomberg reported.  Jobs succeeded in making such an arrangement with Google, according to published reports. The feds are investigating and the Palm allegations only make Apple look worse.

It is quite amazing that companies would expose them selves to such risk if conversations among engineers were NOT in fact extremely valuable.  Why else would Apple engage in such disrespect to engineers and others who actually create the products Mr. Jobs gets credit for?

The liberation of Knowledge Assets

The IPhone that rolls off the assembly line is not an innovation.  Rather, the millions upon millions of tiny incremental ideas, conversations, and shared thought are assembled into what does eventually roll off the assembly line.  The role of the CEO is significant, but still a minority task in the larger picture.

More than ever, social media is empowering people to hold equally productive and focused conversations outside the construct of corporation.  With the ability to measure and track impressions comes the ability to pay royalties to those that produce, direct, and sustain conversations.

With the Obama justice department and other federal regulators already looking closely at Apple over the iPhone and handset exclusivity and the sharing of board members, Jobs’ alleged anti-poaching efforts only add to the fire that is growing around him. If social media continues to integrate at a rapid pace, the biggest fire that Mr. Jobs and other CEOs may have growing around them is the autonomy of creative, social, and intellectual staff.

Special thanks to a post written by: Veteran industry-watcher David Coursey who tweets as @techinciter and can be contacted via his Web site.

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Social Networks and the Multiplier Effect on Innovation

If we combine the parallel transaction with the series transaction we have what now looks like a neural network. In practice, we know that strong networks of people freely exchanging ideas make organizations better, smarter, and more efficient. Networks are where knowledge and wisdom is literally stored. A network is fault tolerant, if one person leaves, the network survives. For a relatively small input into a network, we can produce a large output of new knowledge – we have a learning organization.

However, in society, these interactions are largely accidental; people meet at Church, Starbucks, and Social Events or by word of Mouth. Other times, these interactions are concentrated inside a single community of very similar people such as a technical conference, group meeting, or lunch buddies and are often not well diversified.

Suppose the interactions among people were not random, instead, they could be designed by the entrepreneur to produce a unique outcome. The Innovation Bank will combine people of complementary knowledge assets in a calculated manner in order to arrive at specific business approaches and applications.

A special case of the above business method and resulting social network is called the Multiplier Effect. A financial bank enjoys a multiplier effect with the ability to lend the 10 times more money than they hold in reserve. Money changing hands has a multiplier effect on an economy. Again, financial analogies hold.

Suppose that a company owns composite material technology for use on aircraft. Since they specialize in airplanes, they have no intention of pursuing other applications such as recreational equipment, energy production, or health care products.

Suppose that the company could deposit this asset in a bank and collect interest. The Search Engine can scan the business landscape to find companies with a knowledge deficit in the area of your technology and make loans of your technology. As the originator, you have the option to see what those other companies invent and you hold the right to use their new ideas in your aircraft application.

With an innovation Bank, you can reduce your Research and Development costs and create additional revenue in a tangential innovation market. With reduced cost and risk of innovation, you are likely to specialize more and more in innovation as your enterprise. In the event of a cyclic downturn in the business of an originator, instead of “laying off” knowledge assets, people can work in tangential industries where they will continue developing – literally putting “Knowledge in the Bank” – to be called back when market conditions improve. A mobile knowledge asset increases in value becoming smarter and more productive over time.

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