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Future Challenges for KM 431

Human Organizational
capital capital

Ability of individuals Customer Codified knowledge,
and teams to apply culture, values, norms
solutions to customer capital
needs, competencies,
mind-sets.

Strength of customer relationship
Superior customer-perceived value
Intellectual capital model
Customized solutions
Relationship between human, customer
and organizational capital that maximizes
the organization’s potential to create value

Figure 13.2
The intellectual capital model

In 1993, before the terms intellectual capital and knowledge management became
industry buzzwords, Dow Chemical began to realize that its database of over 29,000
patents represented a gold mine in underutilized intellectual capital. Over time, the
company ’ s database had become little more than a dusty, neglected fi ling cabinet. To
combat this neglect, Gordon Petrash was hired to direct Dow ’ s intellectual asset man-
agement. Once in offi ce, Petrash took immediate action to identify and index all of
Dow ’ s patents. His initial review revealed that less than one half of Dow ’ s patents were
being utilized. Understanding the value waiting to be discovered, Petrash worked to
develop patent portfolios for each of Dow ’ s business units. All unused patents were
indexed and checked for royalty opportunities. This included:
• Projected costs until expiration
• Percentage of annual intellectual asset management costs of R & D budget
• Percentage of competitive samples analyzed that initiate business actions by purpose
• Percentage of business using
• Percentage that business will use . . .