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The New Organizational Wealth
Book

The New Organizational Wealth

Managing & Measuring Knowledge-Based Assets

Karl Erik Sveiby
Berrett-Koehler, 1999
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Editorial Rating

7

Qualities

  • Innovative

Recommendation

Business is business, they say, but the knowledge management business is something else entirely. Author Karl Erik Sveiby earned his doctorate with a thesis that draws an interesting distinction between information and knowledge. This book owes a great deal to the research in that thesis, although some of the subtleties were probably lost in the translation after it was presented at Stockholm University. Dr. Sveiby offers managers a plausible structure for stratifying their employees. He provides a solid rationale to justify rationing resources and information. getAbstract recommends this book to knowledge managers. Professionals who feel they are not receiving adequate support, information, or compensation from managers also will find succor in these theories.

Summary

You Don’t Know What You’ve Got ’til It’s Gone

In 1994, Maurice Saatchi was driven from his position at the head of Saatchi & Saatchi, the huge, public, international advertising agency. For more than 20 years the Saatchi brothers had cultivated a climate of creativity and competence - a knowledge organization - that satisfied clients and stimulated employees. The quality of the employees and of the customer base generated enough tangible and intangible value that, in 1974, the company became the first advertising firm to list on a national stock market. A second offering in 1986 raised 400 million pounds on the London exchange. The proceeds were used for expansion and diversification, including the purchase of New York’s Ted Bates agency.

As the company expanded, its market cap exceeded 630 million pounds while its bottom line reflected net assets of 108 million pounds. Then it began to violate the business logic of knowledge organizations. It believed its clients would go to one place for a wide range of professional advice beyond its core advertising and marketing services. Mistakenly seeing the business as analogous to a manufacturing firm, Saatchi pursued mergers...

About the Author

Karl Erik Sveiby is research fellow at Queensland University of Technology in Brisbane, Australia. He began as a publisher of Swedish business journals in 1979. He and his partners sold the publishing company in 1994. Sveiby graduated from the doctoral program at Stockholm University in 1995. His thesis was Toward a Knowledge Perspective on Organization.

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