The unknown asset
Vineet Chhatwal, chief operating officer of The Consulting Office, explains why enterprises need to work harder to protect their intellectual assets.
As we pass the anniversary of the "economic crisis," it is logical to look back at the year to see if something has been learnt and get some pointers for the future. There have been a myriad of programs on the media aptly titled "after shock" and the like. I couldn't help but notice the lack of focus on the loss of knowledge that various organisations have experienced due to mass layoffs, projects shelved mid-way and so on. For the avoidance of doubt, I refer to knowledge (assets) here as intellectual property (IP) that can be practically protected. Very few organisations expended any resources on converting knowledge to tangible IP, most of which is actually lost forever.
Over the past few months, I had the opportunity to discuss this issue with several business and government leaders. The idea of being able to protect and leverage their organisation's cumulative knowledge finds favor with all of them without exception. In some cases, the commercial possibilities are tremendous as well. Unfortunately the discussions get vague when one touches upon the practical realities. Whose job is it to harness and mange the knowledge assets? How does one protect the knowledge from walking out with consultants and the like? Does the organisation even have the rights to claim the knowledge as its own? Is the leadership providing the awareness and tools to the organisation to be able to manage the knowledge assets?
I see this as a significant opportunity for the CIOs to take a lead and fill this vacuum. This is also logical, as most of the innovations are either directly led or have a significant contributions from information technology. This gains even more relevance in the MENA region's context, as CIOs are a rare species here. However, the CIOs should not see this as an information security or a legal issue only. It requires a holistic and portfolio management type approach to create and manage knowledge assets.
Firstly, the CIO needs to sponsor or undertake an objective review of the knowledge currently existing in their respective organisations. Again, I am referring to tangible IP only. Further, the review should focus on factors such as criticality for the organisation, investment in developing the IP and potential commercial value (if applicable). This review should result in a portfolio of IP assets which should be regularly updated. This will enable a CIO to not only develop a robust strategy to harness these assets but also open the eyes of his CEO and/or board to the investments that have been made in developing these assets.
Secondly, he/she needs to establish a process and related tools that enable the business resources to identify, develop and manage IP on an ongoing basis. The resources at relevant levels should be provided the necessary awareness to avoid an unintentional leakage of IP. The CIO should collaborate with internal compliance and audit functions to not only ensure adherence to the process but also obtain an independent view of the value to the organisation.
Thirdly, the procurement and legal functions in the organisation need to ensure that the terms of business sufficiently protect the IP that is created on projects/services outsourced to third parties. This should also be applied joint ventures and similar arrangements.
Finally, the CIO will need to work with the HR function to ensure that appropriate policies, incentives and contractual safeguards are embedded. This will contribute significantly towards building the right culture and highlighting the importance of IP management to the business resources.
To close off, I want to highlight the irony associated with my choice of title for this article. I borrowed it from a book titled Capitalism - The Unknown Ideal, written by Ayn Rand. If nothing else, with the current crisis caused by un-bridled capitalism, it will possibly place "knowledge" firmly on every board's agenda.
The views expressed are those of the author and not that of The Consulting Office.