Managing Intellectual Capital in Practice

This book is the essential guide for managers wishing to implement the benefits of Intellectual Capital thinking in their companies or divisions. It serves as an easily accessible introduction to the subject area for the novice, giving the gist of what it is about and how it has developed, but above all it gives hands-on instructions on how to incorporate intellectual capital thinking in everyday business and how to use the tools provided for the management and measurement of intangible resources. Throughout the main part of the book, three different cases in separate boxes run in parallel with the body text. These are introduced in chapter 2 and illustrate how the tools are to be used, depending on what type of company wishes to implement these ideas. The three case companies are characterised as a manufacturing company, an R&D organisation and a network company. Smaller case stories about well-known global companies are also interspersed throughout the book.

Table of Contents:
1. What is Intellectual Capital and Why is it Important?  2. How to Identify the Organization’s Intellectual Capital Resources  3. Putting the Intellectual Capital Resources to Value-Creating Use  4. Valuing and Measuring Intellectual Capital  5. Reporting on Intellectual Capital  6. Other Applications of the Intellectual Capital Approach

About the Author :
Göran Roos, Stephan Pike, Lisa Fernström

Review :
"The approach presented by Goran Roos and his team in this book was the template for turning FOI into a world-class organization. I would recommend it to anyone responsible for value creation in the public sector." -Bengt Anderberg, Director General [ret], FOI (Swedish Defense Agency) "Goran Roos and his colleagues' interpretation of the value of managing intellectual capital correctly as a way of establishing differentiation and sustainable competitive advantages in a wide range of organizations is superb. This new book is a great stimulator for managers to adopt new ways of management with an excellent combination of theory and practical examples." -Sabin Azua, Managing Director, BearingPoint, Spain "The first book providing practical advice on how to extract more value from intangibles - highly recommended." - John J. Ballows, Partner, Shareholder Value, Accenture "Goran Roos is a leading light in the field of intellectual capital. I have had the great pleasure of being both a co-author and a student of his innovative work. The enclosed text is a must read for any academic or practitioner interested in a holistic review of the literature. The expertise of Professor Roos and his co-authors clearly shines in the way the arguments are meticulously laid out. Plus, their breadth of knowledge in a variety of interrelated areas including strategy, accounting, finance, organizational behavior, human resources and technology is refreshing when dealing with such a complex and multifaceted topic. Intellectual capital is the de facto currency of our millennium, and Goran Roos and his colleagues continue to effectively evangelize its importance." -Dr. Nick Bontis, Director, Institute for Intellectual Capital Research Professor, McMaster University, Hamilton, Ontario, Canada "The management of intangibles and organizational knowledge stands as a dynamic and creative perspective which will enable intellectual capital to be developed in organizations, an innovative viewpoint analyzed by Goran Roos and his co-authors, who have been able to contribute with their valuable experience on the subject in this recent work." -Eduardo Bueno Campos, Director of Parque Cientifico de Madrid (PCM), Centro de Investigaciones sobre la Sociedad deI Conocimiento (CIC) and Instituto Universitario de Administracion de Empresas (IADE)- Universidad Autonoma de Madrid, Spain "It is a pleasure to see how Goran Roos and his co-authors integrate the most recent models and concepts into a very comprehensive and practically oriented treatment of Intellectual Capital. With this book the ICS team has once again shown how competitive advantages can be built upon intellectual capital. As one of the founding fathers of Intellectual Capital, Goran Roos knows how intellectual capital works and what the challenges are in developing a knowledge-based strategy." -Per Nikolaj Bukh (www.pnbukh.com), Professor, Aarhus School of Business, Aarhus Denmark; co-author of the Danish Guideline for Intellectual Capital "Goran Roos and his co-authors have drawn on a wealth of experience in this path-breaking and insightful study of why intellectual capital matters and how intellectual capital management can be applied in organizations. Its lucid style, penetrating analysis of IC methods and numerous practical examples make it a valuable and accessible addition to the literature for business managers, academics and students alike." -Alan Burton-Jones, CEO, Burton-Jones & Associates, South Brisbane, Australia, and author, Knowledge Capitalism: Business, Work, and Learning in the New Economy "Although the value and importance of Intellectual Capital has been reported on extensively, Professor Goran Roos and his co-authors describe for the first time a methodology which could be applied to any organization. The process is practical and it works." - Dr. Stuart W. Carr, Director, Radiopharmaceuticals, Australia Nuclear Science & Technology Organization, Radiopharmaceuticals and Industrials (ARI) "Managing value creation in today's organizations that are based mainly on intangible assets starts with a clear analysis and understanding of all available resources - including intangibles. The Intellectual Capital Management movement has focused on this fact and promoted this message over the last one and a half decades. Goran Roos and his co-authors go much further in this book. The concept they present allows managers to not only put more rigor in systematic resource analysis, but to also understand how the different resource categories are transformed in the value creation process - which enables them to really manage the value creating process, both from a strategic and operational perspective. Thus, this book presents the missing building block for true Intellectual Capital Management (or Intangible Assets Management) and is a must read for everyone interested in modern business management." - Jurgen H. Daum, CFO adviser, enterprise management expert and Chief Solution Architect, SAP AG, Waldorf, Germany "Managing Intellectual Capital in Practice provides a very useable framework for managing intangibles. This text takes a deeper look at intangibles, their measurement and their management, and gives the reader some powerful ideas to drive strategic planning processes." - John Dean, General Manager, Corporate Strategy Group, Department of Industry, Tourism and Resources, Australia "Managing Intellectual Capital in Practice appears to be one of the best books regarding application of intellectual capital in contemporary organizations. The essence of the book is in the sequence of rather practical procedures- i.e., how to identify, value, measure and report on the intellectual capital of your business. Undoubtedly the personal experience of the author makes this book helpful for practitioners as well as researchers." -Vassily K. Dermanov, Ph.D, Associate Professor, Vice-president, Stockholm School of Economics, Saint Petersburg, Russia "Goran Roos and his co-authors give readers the benefit of their long and outstanding experience in intellectual capital and make this complicated concept easy to both understand and put into practice. Their wisdom as relates to extracting value from intangibles is breathtaking. Strongly recommended as reading to all business leaders and managers." -Mehmet Gun, Founder, Mehmet Gun & Co., Istanbul, Turkey "Professor Goran Roos has together with his co-authors synthesized current professional and research knowledge about intellectual capital into this accessible book. I highly recommend Managing Intellectual Capital in Practice for practitioners and academics as it provides case studies and detailed illustration of various theoretical constructs and models for intellectual capital management, measurement and reporting." - Professor James Guthrie, School of Business, University of Sydney, Australia "Many people talk about the new economy and how the basis of value creation is fast shifting from physical to intellectual capital. Few people take us beyond the theory. In this important book, Goran Roos gives us the tools and the strategies we need to navigate businesses in this unfamiliar but exciting world." -Ian R. Harper, Executive Director, Centre for Business & Public Policy, Melbourne Business School, Australia "This dynamic work reflects the increasing scope and importance of extracting value from intangibles in our hypercompetitive environment. Professor Roos and his co-authors' deep understanding of intangibles and rich experience in applying it strategically are captured in this work of leading-edge practice. An invaluable guide for today's decision-making to deliver high performance results." - Dr. Werner Hoffmann, Professor, University of Applied Sciences, Ludwigshafen, Germany "Intellectual Capital is one of the central cornerstones of modern business life. Professor Goran Roos and his co-authors present this, sometimes difficult to understand, subject in a very clear, practical and compelling way, drawing on their strong scientific competence. The book is an important tool in every executive's library." -Professor Erkki KM Leppavuori, President and CEO, Technical Research Centre of Finland, VTT "This book is an important addition to the fast-growing literature on intellectual capital. Particularly worthwhile are the numerous practical examples and the extension to the not-for-profit and government sectors." - Baruch Lev, Philip Bardes Professor of Accounting and Finance at New York University, Stern School of Business, and Director of the Vincent C. Ross Institute for Accounting Research, New York, USA "Professor Roos and his team have once again shown that "the soft stuff" needn't be fluffy, but can actually be measured and managed in a meaningful and truly useful way. This book gives managers the language to work with all resources in their organization and the tools to make sure they contribute to achieving tangible results." - Lea Lillkall, VP, HR/Competence & Leadership, TeliaSonera, Finland "Most managers recognize the significance of intellectual capital - Managing Intellectual Capital in Practice provides them with the practical tools to manage it. In a step by step fashion, the authors distill the essential principles of this complex field, helping managers better understand, define, value, and use their essential knowledge assets for competitive advantage. This is not a casual read. This will become the primer on intellectual capital and knowledge management. It has been a long time coming but it is here. The serious practitioner will find it invaluable." - Sarah Mavrinac, Assistant Professor of Accounting & Control, INSEAD, Fontainebleau Cedex, France "Goran Roos and his co-authors bring fresh perspectives, well-researched concepts and excellent practical applications to the area of intellectual capital. Any organization that wants to succeed in the future needs to clearly understand the role of intellectual capital and the measurement of intangibles to determine future value. The book is clear and well thought through and brings out the interrelated concepts of strategy, innovation, technology and organizational behavior. This invaluable guide is a business essential for the future and necessity for any successful organization in the future." - Susan Mackie, Chief Executive, de Bono Institute, Melbourne, Australia "The management and measurement of Intellectual Capital is a major proportion of the value in 'new economy' companies and in many old economy ones too. In mergers and acquisitions, the intangible value of potential synergy is critical to the purchase decision. Goran Roos and his team are global leaders in understanding these issues and this book is a beacon for those wanting to understand the value to their organization of intangibles and Intellectual Capital. The case studies are invaluable practical lessons in IC." - Anne E Molyneux, Director, CS International; Former Director Technical Affairs at the Institute of Chartered Accountants in England and Wales; Former Director Intellectual Capital at CPA Australia and was also CPA Australia's Finance Director "Goran Roos is clearly a leading author in the field of intellectual capital, and this book testifies to this. It locates intellectual capital in a series of contexts and shows to students and advanced practitioners the merits of making intellectual capital not only a tool for management and reporting but also a framework for thinking about strategy. Goran Roos here mobilizes his academic talent as well as huge practical experience for the benefit of readers and advances the frontiers of intellectual capital." -Jan Mouritsen, Professor, Copenhagen Business School, Denmark "We have worked with Goran for six years and his practical thinking is continuously influencing the way we go about our business, with measurable success as a result. The content of this book reflects part of Goran's thinking and is highly recommended for anybody involved in FMCG." - John Murphy, Managing Director, Fosters, Australia "Goran Roos at his best. One of the few people working in the field of intangible assets that can actually make the concept tangible and actionable. Goran's wisdom, insight and intellect shines through this thought-provoking book." - Professor Andy Neely, Cranfield School of Management, Cranfield, UK & Deputy Director, Advanced Institute of Management Research, London, UK "In his new book, Goran Roos and his colleagues explore complex and innovative concepts and interrelationships in a territory yet to be charted. An excellent piece of work!" - Patricia Ordonez de Pablos, Professor of Business Administration, the University of Oviedo, Spain; Executive Editor of the International Journal of Learning and Intellectual Capital "Professor Roos' book on Intellectual Capital is an outstanding work giving a brilliant overview of the current thinking on IC theories and methods as well as sharing extremely useful experiences and insights of IC work in key applications." -- Dir Jan Rylander, Chairman Research and Technology WEAO, Western European Union "The term 'intellectual capital' denotes an emerging competitive landscape in which many companies feel lost and disorientated. In Managing Intellectual Capital in Practice, Goran Roos and his colleagues apply an impressive combination of practical experience and analytical insight to provide one of the most detailed and comprehensive maps yet available of this new landscape." -Professor Harry Scarbrough, Warwick Business School, University of Warwick, Coventry, UK "We have found during several client engagements in the Baltic States that managers are acknowledging the real importance of intellectual capital - it is the most important resource of the organization. The new book from intellectual capital guru Goran Roos and his colleagues gathers together the main theoretical concepts and their practical implications of intellectual capital. This is something that every manager should look into in order to be competitive." -Mati Soot, Chairman, Inscape Baltic, Tallinn, Estonia "Goran Roos and his co-authors have laid out a comprehensive and compelling approach for identifying, measuring and valuing an organization's intellectual capital. This book is an important resource for organizational strategists, performance managers and business measurement practitioners alike." - Les Trudzik, Ph.D., Executive Director, KPMG Risk Advisory Services, Australia "The practical and useful approach presented in this book has simplified my task of turning around the European business of our organization - a very useful read for anybody in the telecoms business." -Derek Welford, CEO, Cable and Wireless Europe "Roos et al. provide a very readable and useful yet penetrating treatment of Intellectual Capital. Particularly important are the extensive and clear presentations of the nature and properties of IC and its relation to financial and physical capital, the highly practical approaches to assessing and developing IC within the enterprise, and the motivating analysis of how IC relates to value creation and business benefits. The numerous examples make the text both readable and understandable and bring forth the reality of how and where IC becomes important in supporting the success of the enterprise. This is a book that not only should be on every manager's shelf - it should also be incorporated in their daily and strategic practices. Roos and his co-authors provide fresh new perspectives that at times are contrary to conventional and outdated wisdom. They model their analysis and synthesis on comprehensive yet pragmatic approaches and the perspective of the effective enterprise. They also incorporate advanced theoretical methods in their treatise to deal with the more complicated and subtle aspects that nevertheless play important roles and need to be brought to the surface to be of practical value." - Karl M. Wiig, Chairman, Knowledge Research Institute, Inc., Arlington, Texas, USA "Professor Roos and his co-authors' work provides an exhilarating pattern for business advancement strategy from its most fundamental root. A great tool for professional advisors in many disciplines." -- Norman Strong, FCA, Senior Partner, BSG Valentine, Chartered Accountants, London "A fine balance between advanced theory and practical approaches to managing IC may be what's best about this book. Roos' personal experiences add greatly to the credibility of the suggestions and recommendations he and his co-authors provide. Human resource information management professionals will find this book to be well thought through, bringing out the interrelated concepts of innovation, technology and organizational behavior." - IHRIM e-journal "...highly recommended as a thorough, practical workbook to intellectual capital management as it advances the theory of intellectual capital and goes beyond the theory by making it more tangible and actionable." - International Journal of Learning and Intellectual Capital