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Article Excerpt
EXECUTIVE SUMMARY
Re-creating knowledge that a company already possesses is a time- and resource-consuming activity. As companies increasingly compete oh the basis of knowledge, they must improve their methods for reusing intellectual assets. Organizations need to scan the environment to ensure that vital assets are current and be willing to overhaul assets when they are not.
Innovation and invention are critical capabilities for companies, but how good a job do most companies do in exploiting the intellectual assets they have already created? Software companies, for example, spend a lot of money and effort developing program code, only to find that they are reinventing code they had previously developed but did not know they had. In other words, they are paying two, three, perhaps 10 times over to duplicate intellectual assets they already own. Product developers create new components or products rather than employ existing designs that are perfectly usable. Virtually every knowledge-based organization--law firm, hospital, educational institution, or professional services firm--wastes time, money, and human energy re-creating intellectual assets.
As companies increasingly compete on the basis of knowledge, they must improve their methods for reusing intellectual assets. In the industrial economy a key component of mass production and productivity--and hence economic growth--was the reuse of physical assets: molds, templates, castings, and so forth. Although so much of the economy is now based on intellectual assets, we have yet to achieve a similar level of reuse and productivity improvement for that class of asset. Yet intellectual asset reuse is at the heart of productivity improvement objectives for key knowledge-work processes for example, software development and product engineering. Without substantial improvements in organizations' rates of asset reuse, these objectives will not be achieved.
In this article we describe the prevalence of reuse in several different o industries, including software, health care, automobiles, and professional services. In each industry we interviewed managers in at least two organizations about their reuse practices and challenges. Even in this small study, we found great differences in the level of reuse across organizations. For each of these industries, we describe some of the factors governing the success and rate of reuse.
What are intellectual assets?
An asset is an item of value owned. Intellectual assets are valuable items created by human minds: written documents, software, musical compositions, and so forth. In order to be useful and valuable, intellectual assets must be put into codified form, as Tom Stewart notes in his book intellectual Capital: The New Wealth of Organizations:
"Intelligence becomes an asset when some useful order is created out of free-flowing brain power--that is, when it is given coherent form (a mailing list, a database, an agenda for a meeting, a description of process); when it is captured in a way that allows it to be described, shared and exploited; and when it can be deployed to do something that could not be done if it remained scattered around like coins in a gutter... An intellectual asset is a formally codified piece of knowledge."
If assets can be owned, then who owns them? A codified piece of valuable knowledge owned by an individual--and not shared within an organization--can be considered a private intellectual asset. Our focus in this article is on intellectual assets as organizational property However, as ownership broadens within and across organizations, the value to the original owner may depreciate. A renowned chef with a secret recipe, for example, protects the value of his personal asset. If his restaurant takes over the asset, the chef becomes expendable. And once customers get...
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