A Compound of Alchymie

Knowledge Really is Power

I stumbled across a great book in one of those discount bookshops recently. It's called 'Information Feudalism - Who owns the knowledge economy?' by Peter Drahos and John Braithwaite.  It looks at how corporations supported by rich economies are influencing intellectual property rules in the pursuit of even greater profits. Clearly corporations need to see a return on their investments in intellectual capital and locking up knowledge in intellectual property such as patents appears to be acceptable behaviour. However the book's authors make a compelling argument that this often goes too far and that knowledge is effectively being locked-up at the expense of much of the developing world. It's an interesting read, and charts the history of intellectual property strategies right up to today's World Trade Organisation's involvement. A short excerpt below:

"The basic strategy of the players in the knowledge game came to this. Their laboratories would produce knowledge that would be developed into products, for which their legal divisions would secure an impregnable patent position. Use was also made of trade marks, trade secret law and copyright. The quest for knowledge was really the quest for monopoly. Competition could be kept out or made to pay high royalties, depending upon the way the numbers panned out. Alternatively, intellectual property rightsand licenses could be used to structure a global knowledge cartel. "

Knowledge really is power - but then we always knew that.

Intellectual Capital Mismanaged

Being interested in intellectual capital I have watched closely the demise of the UK's last nationally owned major car manufacturer. Since Phoenix took over from BMW five years ago the company has been drained dry of both it's financial and intellectual capital. Clearly there wasn't much in the way of financial capital when Pheonix took over but what about the value of intellectual capital that always appears hidden in the balance sheet? Phoenix bought MG Rover for £10. What did they get for that? Whatever value there was in the business - intellectual or otherwise - it has been squandered by Phoenix, to the extent that even the Iranian carmaker Dastaan has decided to steer well clear.

Apparently, the administrators PwC believe there are sufficient intellectual property rights remaining in MG Rover for a car-producing business to be sold. Most of this value probably exists in the brand and what is left of the customer capital. Even the rights to the company's two key models - the  Rover 75 and 25 are no longer owned by the business but by the Chinese SAIC.  I noticed recently that SAIC had recruited a core team of 'experts' from Rover to help them gear up for the production of the 25 and 75 models - human capital can leak away very quickly once an organisation begins to decline.

All this talk of destroyed value also reminded me of some discussions I had with a ex-colleauge of mine about a year ago. At the time he was winding up 'failed' companies - it was his task to squeeze out every last drop of cash before the businesses were wound up. Usually this meant going after the book assets but I suggested that there may be considerably more value in the intangible assets. He wasn't convinced but I still think that a more thorough  understanding of intellectual capital may enable failing companies to focus more carefully on corrective action that might actually save them, or at least prevent them becoming completely worthless.

In the case of MG Rover, one has to ask the question - did Phoenix have their eyes on the wong ball? Could thousands of jobs have been saved if Phoenix had managed Rover's intellectual capital and intellectual property more intelligently?

Business Blogsite

While shamelessly promoting my blog at a recent KM event some of the participants asked me why I bothered writing a blog at all. It's a good question and I  knew that what they really meant was what do you get back in return for sharing your ideas on an internet that is already awash with ideas.  Well, I'm still relatively new to blogging but I find it useful way to expose just a small proportion of the ideas that drop out of my knowledge-overloaded head - and sometimes make it onto paper (or more usually magnetic media). Writing things down is also good for the soul and it helps develop a journalistic style. Basically I do it primarily as a way of exploring the medium and so far I have found it a useful way of covering topics that are maybe too nebulous too make it onto my website. Having an RSS feed of latest entries on my website has also been really useful. I'm increasingly of the opinion that the boundaries between blog and web site are becoming more blurred (at least for small, individualistic, boutique businesses such as mine).

I have come across some businesses recently that use the blog format as their sole web presence. One of the best is 'An English Cut' the blogsite of a Saville Row (London) tailor. Not only does Thomas Mahon use the blog format well but he also blurs the boundaries between home and work to the extent that there is no no need for work-life balance - the two appear completely integrated. Whether buying one of his amazing suits or just imagining him sailing on the English Lakes (he's based in Cumbria) his web presence establishes a real connection with the visitor.