Intangible Assets

Institutional knowledge vs. new creativity

The original form of learning: Passing on what you know to the next generation so it isn't lost forever.

Much knowledge has been lost over the eons because people died before they could accomplish this.  In modern times this knowledge goes beyond the personal life skills, includes the skills of a trade which these days are not passed to our children, but to our co- workers, or our profession.  Unfortunately, many leaders place no value on this transition of knowledge.  They value "new", managers think they contribute by fostering new changes, and there is value there, but ignoring the past is perilous.

Centralized control

They don't even recognize the value of that knowledge, so it is lost in retirements and staff reductions and individual career transitions.  At least in that last case the knowledge isn't lost to the world, it is only lost to the one institution, transferred to a different institution, probably because they recognize its value and were willing to buy it by hiring a new employee.

Creative destruction:  the "new way" destroys much value, but creates new value in the process; problem is, the skills that are no longer needed affect people who don't have the aptitudes needed to adapt to the new world, and they get left behind.

It is important to remember that most enterprises experience a life cycle which includes five basic stages: Start-up; Fast Growth; Moderate, Steady Growth; Stability; Stagnation (No Growth); Decline; End State.  Creative Destruction frequently is just the hastening of the end for processes that have stagnated or are declining.  Although Creative Destruction can destroy still-viable enterprises, it usually replaces them with the next generation.  Many years ago, music was available on vinyl discs, and was recorded on reel-to-reel tape by consumers.  Then eight-track tapes were invented, used primarily in autos and portable devices; then cassette tapes were invented, smaller, easier to use, and new functionality: (rewind) and reel-to-reel recorders were relegated to a small minority of luddites who believed that there was better quality.  Then came Compact Disks; CD’s killed everything prior.  This was the first step in converting music to a digital format.  Next came digital music on iPods, computers, phones.  Then streaming; you don’t own it, you rent it.  The point is, successive generations of technology have replaced the old with newer and better, many times over.  What is really different for the current generation of people is the speed of this transition.  Many people alive today have experienced multiple generations of technological change.

Employee creativity

Innovation & creativity.  Gary Hoover says that innovation is frequently the result of two disparate concepts coming together in new ways.  He created the book superstore (Bookstop) by combining the Toy superstore concept with a new category, books.  "While the execution of the idea was difficult and complex, the core idea was not. We simply took the retail business model of Toys R Us — giant single-category stores with large product selections and low prices — and applied it to books."