Edited by Geoffrey P. LantosManaging Intellectual Capital in Practice

Citation

Gupta, O. (2006), "Edited by Geoffrey P. LantosManaging Intellectual Capital in Practice", Journal of Product & Brand Management, Vol. 15 No. 7, pp. 473-474. https://doi.org/10.1108/10610420610712874

Recent and now fairly advanced thinking on “intellectual capital” (IC) is rarely used within the field of brand management and the wider discipline of marketing. Yet the terminology of IC may not necessarily be unfamiliar with marketing academics and practitioners alike. Without realizing it, those involved in marketing constantly talk about and manage intangibles or intellectual capital resources ‐ brands being the most obvious example. It's no secret that brands today can make up large proportions of the value of many companies, who in turn invest huge amounts of resources in building these brands. Other marketing resources and capabilities that fall under intellectual capital resources include customer relationships and their management, creative skills, negotiation skills of the sales force etc. The central premise of both fields is essentially the same – firms investing in and actively managing their most valuable resources will reap the rewards in the form of better value creation, whether expressed as total shareholder returns or increased stakeholder commitment. This review of the book “Managing Intellectual Capital in Practice” is a starting attempt to consider the potential synergies between the fields of marketing and IC.

The issue can be considered an important one. With complex challenges being faced by marketers by way of a lack of appropriate ways in accurately measuring the implementation and outcomes of marketing initiatives, including issues such as measuring brand effectiveness and advertising return‐on‐investments, some serious out‐of‐the‐box thinking is warranted. It is in this context, where a more holistic view of the firm's resources can help to visualise and measure the importance of marketing and the value it generates. In their book, Göran Roos and his co‐authors share their expertise and experiences in managing, measuring and valuing intellectual capital – a term they define as “all non‐monetary and non‐physical resources that are fully or partly controlled by an organization and that contribute to the organization's value creation” (p. 19) – to provide a holistic perspective on how to increase value creation in companies and organizations by leveraging their IC. It is through this perspective that brand management and IC can be considered as being non‐separable and complementary with the aim of overcoming some of the challenges of marketing.

The book is written primarily around intellectual capital as an overarching framework for dealing with intangibles. The first chapter in the book, which considers the context, presents a number of proofs that the economy of today to a great extent relies on intangible elements and primarily leverages intellectual capital resources for value creation relying on business logics that are different from the conventional value chain logic. The second and third chapters of the book cover central management questions about how to ensure the availability of suitable resources (the static components of IC) and how best to employ them in order to successfully execute the strategy of an organization. These chapters present some surprisingly straightforward yet effective tools to make the management of intangibles more actionable. For example, the navigator tool, whose implementation and analysis is explained in‐depth, is a very visual way to clearly demonstrate the contribution brands and other marketing resources make to a firm's cash flow.

In the forth chapter, the authors share their insights on the difficult tasks of safely measuring and valuing intangible resources. According to the authors there is a clear process to follow in order to build a proper measurement system that follows the foundations of measurement theory and fulfils a set of requirements which they also explain. They provide a strong foundation for a theory‐compliant measurement system that can potentially measure what really matters. This is important background reading for marketers devising measurement systems that are to be of relevance. The authors then go on to present a relatively simple‐to‐implement Intellectual Capital Index system that tracks a set of indicators based on the performance of intangibles. There is less precision offered here but again it's a tool that could be of extreme usefulness to marketers.

The fifth chapter goes on to consider the issues of disclosing non‐financial information. The authors recognize that the area is still very much in an immature phase and the outline of possible methods to use is not to be considered as comprehensive but as a sample of approaches developed that have had some impact on the area of disclosure of intangibles. Here too there are lessons to be learnt such as on disclosing on the performance of brands without revealing too much to competitors. The final chapter finishes with introductions on applications of IC management where the authors explain how to use intellectual capital thinking to maximize value creation in mergers and acquisitions, knowledge management and human resource management.

It is evident the authors have drawn on a wealth of experience in this insightful study on managing intangible resources. Overall, the concepts presented appear to be grounded in theory and the authors state they have researched and developed the tools over a period of fifteen years, based on theoretical work, consultation in organizations, and best practice studies drawing on experiences from numerous countries, industries and organizational types. Each chapter is summarized with key points, heavily referenced and contains a number of illustrative case studies including three learning cases built on real but anonymous organizations. Inevitably, with the case examples based on anonymous organizations and covering differing topics, the book manages to only give a partial story in the case studies although they do highlight what can be achieved with the tools introduced.

The book does not revolve around brand management or marketing but is still highly recommended for those who wish to extend the boundaries on marketing thinking by learning from best practices and grounded theory in intellectual capital management. For those brave enough to embark on the journey, there remains much to be gained by considering the synergies between the fields of brand management and intellectual capital. For academics, there should be substantial benefits in grasping the methodologies developed within the IC field for measurement and management of intangible resources, and apply them in marketing measurement contexts. The research agenda to take this further is therefore vast. As for practitioners, the rewards of taking a hands‐on look at intellectual capital as a framework for identifying, measuring, valuing and managing intangibles, of which brands are a major component, make this a worthy book to read.