Knowledge Assets
It was a concept that emerged in the Nineties. In a 1994 Fortune article, Tom Stewart used the term intellectual capital, urging companies to focus on what they know.(1)
Among a host of other authors, Neef points to this as the era of the knowledge worker. Noting that there has been a dramatic "upskilling" of job requirements, he claims that some 65 percent of current employment falls within high-skill categories of work. Demand is up for employees who can demonstrate high general educational development, and the ability to deal with cognitive complexity.
From the 1950s to the late 1980s, we experienced a period during which much of the work world called for "make or move skills," with the focus on things and products. Traditional pay systems rewarded the job a person did, rather than that person's capabilities.
In today's world, the focus is on ideas and information -- what the worker knows is key. Industrial employees of the past worked with large, expensive, immovable machines. Workers were crafts people. In today's information industries, employees work with portable computers; they have credentials. The companies they work for may invest in networks and workstations, but, overall, they have far less investment capital going to industrial goods than did the industrial plant of the past. As many writers point out, in the knowledge society, the workers own the "means of production" -- their knowledge.
Fisher points to several dramatic shifts caused by information technology's impact on the workplace:
The information edge no longer resides with management, but is well-distributed throughout the workforce. ...When workers are treated as an expense, they behave as a cost. When they are treated as an asset, they behave as a resource. (2)
The working landscape has changed, much as Drucker has predicted.(3) Drucker coined the terms knowledge society and knowledge worker in The Age of Discontinuity in 1968. In 1998, Drucker devoted the major portion of his Managing in a Time of Great Change to "The Information-Based Organization," and an extensive discussion of knowledge workers. In a 1999 Atlantic Monthly article, Drucker wrote that "what we call the Information Revolution is actually a Knowledge Revolution"
Knowledge is what resides in the worker's head -- the areas of competency and expertise. Knowledge is situational -- it is valuable as it is applied in particular situations. Knowledge workers, knowledge-driven work environments, knowledge assets -- these aren't just management terms from textbooks or seminars; these are terms that employees used in the Workplace Quotations I collected (see, for example, numbers 8, 11, and 23).
Lifelong earning and lifelong learning are closely related: "You are what you've learned, nothing more, nothing less."(4) There have always been pay differentials between workers based on educational levels (e.g., those with Bachelor's degrees make more than people with high school diplomas). However, in today's workworld, special areas of knowledge and skill may be just as important as degrees. Pay-for-knowledge clauses may even be negotiated into union contracts. (5)
Paying for skills, or paying for knowledge, recognizes changes in the makeup of the workforce. Skill-based pay is a system that links training, assessment, and pay systems. It feeds into intra-company recruitment efforts, supports cross-training, and directly links pay with the skills the company needs to succeed. It can also create career paths. Texas Instruments is a pay-for-knowledge (or pay-for-skills) company.
(1) Thomas A. Stewart, "Your Company's Most Valuable Asset: Intellectual Capital," Fortune, vol. 130, no. 7, 8 3 October 1994: p. 68+ Also his Intellectual Capital: The New Wealth of Organizations, New York: Doubleday, 1997.
(2) James R. Fisher, Jr. "What Will It Take To Transform Your Organization in the 21st Century?" Journal for Quality & Participation vol. 22, no. 5, Nov/Dec 1999, p. 7+
(3) Peter F. Drucker, The Age of Discontinuity, New York: Harper-Collins, 1968. Managing in a Time of Great Change, New York: Truman Talley Books, 1998. "Beyond the Information Revolution," Altantic Monthly, October 1999, pp.
(4) Rick Dove, Implementing Stealth Knowledge Management 8 May 2000 <http://www.parshift.com/Essays/essay054.htm>
(5) Chris Bonura and Brett Clanton, "City Bits," New Orleans City Business, vol. 20, no. 41, 3 April 2000, p. 11. This news story reports on Louisiana's Bayou Steel Corporation's new contract with its union workers that provides a system that will increase worker earnings by paying for knowledge they have learned through training. Louisiana Technical College, River Parishes campuses, will provide the training; a grant from the Louisiana Department of Labor helps fund the training.
Investigating
Information Age Realities in the World of Work
