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B1.4 Knowledge

Coordination and control | Operational effectiveness and efficiency | Leveraging intangible assets | Effectiveness in measurement | Mark Hurd, Chairman and CEO, HP | Transfer of risks | Contract risks | Operational risks | Reducing market risk through differentiation | Reducing market risk through consolidation |


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Knowledge assets are accumulations of awareness, experience, information, insight and intellectual property that are associated with actions and context. Management, Organization, Process and Application s assets use and store knowledge assets. People assets store tacit knowledge in the form of experience, skills and talent. Such knowledge is primarily acquired through experience, observation and training. Movement of teams and individuals is an effective way to transfer tacit knowledge within and across organizations.44 Knowledge assets in tacit form are hard for rivals to replicate but easy for owners to lose. Organization s seek to protect themselves from loss by codifying tacit knowledge into explicit forms such as knowledge embedded in Process, Applications and Infrastructure assets. Knowledge assets are difficult to manage but can be highly leveraged with increasing returns and virtually zero opportunity cost s.37 Knowledge assets include policies, plans, designs, configuration s, architecture s, process definitions, analytical methods, service definitions, analyses, reports and surveys. They may be owned as intellectual property and protected by copyrights, patents and trademarks. Knowledge assets can also be rented for use under licensing arrangements and service contract s.

B1.5 People

The value of People assets is the capacity for creativity, analysis, perception, learning, judgement, leadership, communication, coordination, empathy and trust. Such capacity is in teams and individuals within the organization, due to knowledge, experience and skills. Skills can be conceptual, technical and social skills. People assets are also the most convenient absorbers and carriers of all forms of Knowledge. They are the most versatile and potent of all asset types because of their ability to learn and adapt. People assets represent an organization’s capabilities and resource s. If capabilities are capacity for action, People assets are the actors. From the capabilities perspective, people assets are the only type that can create, combine and consume all other asset types. Their tolerance of ambiguity and uncertainty also compensates for the limitations of Process es, Application s and Infrastructure. Because of their enormous potential, People assets are often the most expensive in terms of development, maintenance and motivation. They also are assets that can be hired or rented but cannot be owned. Customer s highly value services that enhance the productivity or potential of People assets.

People assets are also resources with productive capacity. Units of cost, time and effort measure their capacity as teams and individuals. They are mobile, multi-purpose and highly adaptive with the innate ability to learn. Staffing contracts, software agents and customers using self-service options augment the capacity of people assets.


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