Academic journal article Public Personnel Management

The Measurement, Use, and Development of Intellectual Capital to Increase Public Sector Productivity

Academic journal article Public Personnel Management

The Measurement, Use, and Development of Intellectual Capital to Increase Public Sector Productivity

Article excerpt

"If new organizational designs can tap the brain's creative possibilities, they will provide further means of extending and transforming organizational capabilities for rational action." Gareth Morgan, Images of Organization.

"Learning capability is a business's ability to generate new ideas multiplied by its adeptness at generalizing them throughout the company." Fortune Magazine, October 3, 1994.


One of the most promising recent developments in the management field that holds great productivity potential for the public and non-profit sectors is the effort to measure, effectively use, and further develop what has been called an organization's most valuable asset - intellectual capital.

This effort has great upside potential in the public and nonprofit sectors for several different reasons. First, these sectors are human capital intensive. Learning to better use this capital resource only makes sense. This is particularly true since much of the work force in the public sector is civil service protected. This fact, combined with the decremental budget pressures now facing us, makes it imperative that we learn better how to make more productive use of the employees we now have - and are likely to have for the foreseeable future!! Recent research shows that we probably develop productivity but use only about 20 percent of our human capital asset base.(1)

We can and must do better than this. This is especially clear when private sector organizations have estimated that intellectual assets are worth three to four times tangible book value. As Larry Prusak, a principal at the consulting firm of Ernst and Young puts it, "Brains are what business runs on. We need more people out there showing how to use them better."(2)

Another reason this effort has upside potential is that human capital is the primary source for organizational innovation and renewal. Growth in existing human capital -through hiring, training, and education - can be a boundless source of enhanced productivity. Every day we are acquiring a better capacity to understand and use - and yes even develop further - the human brain. As world chess champion Garry Kasparov demonstrated in his match this past winter with the super computer Deep Blue, the human brain is the most magnificent computer of all. Using this human capital resource more effectively is the organizational challenge of our generation. Resources to meet this challenge are growing in leaps and bounds. For example, ninety percent of all books on the brain have been written in the last five years.(3) It is a bonanza of neurological discoveries that hold tremendous potential for reshaping managerial and organizational performance.

This article will first define what intellectual capital is, and indicate the type more frequently required for productive decision making today. Then, a Brain Skill Management Program (BSM) will be described that has been practically field tested to measure, use, and further develop intellectual capital ALREADY EXISTING within organizations. The article will conclude by explaining how this BSM Program has been successfully used to enhance the learning capability of public sector organizations (i.e., ability to generate new ideas multiplied by adeptness at generalizing them throughout the organization).

Intellectual Capital

Intellectual capital can be defined as the intangible assets of skill, knowledge, and information. Properly formalized, captured, and leveraged, intellectual capital can be used to produce a higher value asset. The challenge then is to identify the knowledge assets of your organization, the management processes that can be used to enhance them, and then manage this intellectual capital in a way that enhances performance. This is called learning capability.(4) It requires measurement of your intellectual capital, the management of intellectual capital, and the conscious growth of intellectual capital - both at an individual and organizational level. …

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