Defining Intellectual Capital Management
Intellectual Capital Management (ICM) is a management approach that makes full use of a company’s Intellectual Capital strengths – its roots – and enhances the company’s image as an institution that is beneficial to society.
Intellectual Capital Management believes that ‘Intellectual Capital is the source of a company’s value.’ We believe that there is value in earning the trust and praise of customers, in the ability to develop business know-how and technologies, and in the creativity of management and capabilities and skills of the employees. Intellectual Capital Management aims to strengthen this Intellectual Capital and enhance the potential of the sources from which this value is derived.
Positive financial outcomes are generated as a result of the company aiming to improve, and should not be manipulated directly even in cases where this is possible.
Intellectual Capital Management (ICM) is by no means a lenient form of management. Rotting roots with no hope of recovery must be removed. Conversely, roots that may seem weak at present, but that can be expected to grow well in the future, should be patiently strengthened. Much effort is required to steadily grow these roots to ensure that any sparse areas lacking roots are covered. This takes time and is not a glamorous procedure. However, it is exactly this type of effort that leads to the strong and robust tree that is the company.
Intellectual Capital Management perceives the company as being an organic body or living organism.
A tree’s roots, trunk, leaves and fruit are all interrelated. It is not possible to isolate or replenish one without the other, nor is it possible to enrich solely the ‘fruit.’ Similarly, it is not possible to remove or replace the human capital in a company without looking at the total picture, nor is it possible to improve just the company’s financial outcomes without first improving its Intellectual Capital.