Page 233 - 100 Great Business Ideas: From Leading Companies Around the World (100 Great Ideas)

• Human capital, in the heads of employees.
• Structural capital, which remains in the organization.
• Customer capital, deriving from the relationships that the

company enjoys with its customers. Customer capital is often
seen as a subset of structural capital.

Skandia’s measures track whether intellectual capital is increasing
or decreasing, focusing the organization’s culture and thinking on
increasing its intangible asset. In Edvinsson’s view:

Intellectual capital is a combination of human capital—
the brains, skills, insights and potential of those in an
organization—and structural capital—things like the
processes wrapped up in customers, processes, databases,
brands and systems. It is the ability to transform knowledge
and intangible assets into wealth-creating resources, by
multiplying human capital with structural capital. This is
the intellectual capital multiplier effect.

At Skandia, human capital is divided into customer focus, process
focus, and renewal and development focus. Edvinsson designed a
process for each business unit to report on all areas of intellectual
capital, enabling the organization to quantify its intangible
intellectual capital assets. Moreover, managing intellectual capital
has nurtured innovation and new thinking, and has helped create a
mindset that will enable Skandia to compete in the future.

In practice

• Undertake a knowledge audit. Few firms know what knowledge

they possess—because knowledge is confined to a few, or simply
neglected. A knowledge audit will uncover the breadth, depth,
and location of an organization’s knowledge. It has three core
components:

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