Preface: Intellectual capital is the most vital value catalyst in your business. How often do you assess it’s inherent value in your business performance.
Intellectual Capital in Your Business
Intellectual capital is much more than say the valuable patents obtained from research and development, innovation, and inventions. Intellectual capital is the sum of intangible values in your business. The cornucopia of intellectual capital in business encompasses the inherent value in business alliance capital e.g. relationships with customers, clients, vendors, and the community, i.e. goodwill; structural capital e.g. patents trademarks,, brand(s), proprietary software, database(s) and proprietary knowledge; and not least, human capital e.g. employees, shareholders, values. Yes, a values are a form of intellectual capital too.
So intellectual capital has three major components i) business alliance capital ii) structural capital iii) human capital. Deficiencies of intellectual capital in a business, can result in value deteriorating quickly or maybe never developing properly. Developing and sustaining intellectual capital is one of the cornerstones of successful management. Are sales trends deteriorating, revenues lackluster, or are you always concerned about the continuity of a strong bottom line? Investing in intellectual capital improvements in your business is the surest way to ameliorate these concerns.
Business Alliance Capital
Let’s look at business alliance capital for a moment. How do to you sustain ties with customers, vendors. This is the vital goodwill of the business. Why do customers feel better putting their dollars in you and your employee’s hands? What do you specifically do to add value to your customers? It should be more than lowest prices — you can’t do business with an empty wagon. Is it the appreciation your customers feel, your values, that in turn gives loyalty and commitment to your business from customers, and keeps earning their dollars? Do your customers feel special, do give more than you get in the transaction? That’s only for a nonprofit you might say. But maybe you put a smile on your customers face? A smile is instant vacation. If can give your customers a quick vacation, that’s giving value, and there are so many additional ways to give value in competence and confidence to your customers. That’s alliance capital. If you give your clients trust in your service or product that adds value to the equation. Specific example – If you really have the best service or product in the industry, maybe you have a 30 day money back guarantee.
Structural Capital
Structural capital is the intangible in your business, after your work force has clocked out for the day. This can be patents on technology, processes, or techniques. Structural capital can also include proprietary software that hold value to other enterprises; or say a customer databases. Do you have an email list of certain customers in a specific location that you can leverage? Do you have proprietary vendor sources that give you a cost edge? What about propriety knowledge and techniques. Do you have systems or process efficiencies from layout, or say is your location strategic?
Human Capital
Lastly, but not least, intellectual capital adds human capital values. What knowledge, training, experience, values, relationships, and work ethic do your employees and partners bring to the business? Sales teams add value to the business through the relationships they develop; factory floor employees add value through consistency and steadiness. In a service business? Do your customers trust your employees, your team, to solve their problems? Do they like to work with your team? A good word is like honeycomb, and if that good word is about your businesses human capital (your team), it worth gold.