In a business environment that is increasingly global and technological, many businesses are finding themselves subject to two significant challenges:
- If your product or service can be “made,” it can be copied and someone else can make it cheaper and/or better.
- Customers are becoming ever more knowledgeable about products, vendors and price.
In the words of futurist Michio Kaku, “We are approaching a future of perfect capitalism.” In this world, customers know everything there is to know about a product or service and its alternatives, and the pace and tone of the dialogue between customer and company is increasingly controlled by the audience rather than the organization.
Developing your intellectual capital
One way to address the challenges of perfect capitalism is to invest in developing your intellectual capital – in short, exploiting your data and your interpretation of it.
Here, intellectual capital is defined as the spectrum of value creation associated with your unique data about your suppliers, your customers and your business and what you can learn from it, as well as the range of techniques available to analyze your data for new insights that only you can turn into effective actions.
Intellectual capital is the mirror to perfect capitalism. In the same way that your customers (and competitors) can know about your goods and services and the alternatives, you can understand them and your value-creation chain better than anyone else. You can then use your knowledge to match your needs and resources to their demands.
In addition to providing an initial competitive advantage by optimizing the relationship between buyer and seller through improved efficiency and effectiveness, intellectual capital is very hard to copy by a third party. It is, after all, based on proprietary data and insights.
How can you develop the value of intellectual capital? You need a powerful mix of science (the data and tools needed to analyze the data) and creativity (the ability to interpret an analytical finding and propose an action in response).
In the future, businesses can expect to be measured on their return on intellectual capital in the same way as they are measured today on return on equity or return on assets. Ultimately, customers will be the final arbiter of whether a business is successful, and not just in the so-called “knowledge economy.”
Intellectual capital is for all businesses, because today all businesses produce the raw material necessary: data.
Though perfect capitalism may seem daunting, armed with the right tools and mindset you can easily combat the challenges it will present and take advantages of the new opportunities it will give rise to.