OVERVIEW

Previous chapters have illustrated that relative performance (revenue per employee) can be enhanced by leveraging intangible management standards. One key area where executives can enhance the relative performance of the organization is by controlling knowledge costs.

Knowledge costs are generated whenever staff apply, maintain, or enhance their skill and knowledge. Today, employees spend significant amounts of time using computers. Computers are complex by nature and require a reasonable degree of knowledge to operate satisfactorily. As such, the use of computers will be the first area for which knowledge costs will be discussed.

Today, practically all office employees are equipped with computers. These computers are typically linked to internal and external networks. Any event that requires understanding generates knowledge costs. Because the ability to use computers often requires an understanding of complex operations (hardware, software, networks, etc.), computer usage generates knowledge costs.

Applying Einstein's quote of only using "less than 10% of our brains," the majority of staff know less than 10% of the features of the software programs they use each day. This means that an average employee does not know 90% of the features of the computer programs they may use every day.

Organizations experience potentially large knowledge costs on a daily basis. These costs arise because employees take the "long way" when performing tasks, which increases nonproductive time. Increases in nonproductive time directly affect the firm's relative performance.

IIS8001 Intangible Project Management Standard uses methods and processes compliant with International Intangible Standards to determine what activities...