Intellectual Capital: Realizing Your Company's True Value by Finding Its Hidden Brainpower

One of the greatest challenges facing any business today is the gap between its balance sheet and its market valuation. This gap, representing the bulk of a company's true value, consists of indirect assets -- organizational knowledge, customer satisfaction, product innovation, employee morale, patents, and trademarks -- that never appear in its financial reports. Only in recent years have companies and academics around the world tackled the challenge of measuring this "Intellectual Capital." No company has taken IC measurement as far as the Swedish financial services company Skandia, which in 1995 published the world's first IC annual report. The executive who led the team, the first-ever director of Intellectual Capital, was Leif Edvinsson. Edvinsson has teamed up with business author Michael S. Malone to write this book that explains IC measurement and its usefulness to modern corporations. It also presents a universal IC measurement and reporting system. The authors show how IC measurement can be used in various organizations, including government agencies and nonprofits; they introduce a simple measure to compare IC value and efficiency; and they propose a new IC stock market exchange. Intellectual Capital aims to transform the understanding of enterprise value and will be a landmark business book.