Warren Bennis, Distinguished Professor of Business Administration, USC calls Intellectual Capital "the first to provide a framework, a practical guide, and a theory of the significance of intellectual capital."

It also provides a solid rationale for taking seriously the most recent (and still evolving) business practice for improving competitive advantage by turning organizations into well-oiled, super-efficient economic engines: knowledge management.

An award-winning member of Fortune magazine's board of editors, Mr. Stewart writes with flair and wit. It is clear that the subject of his research and writing in this area stems as much from his own powerful intellect as it does from mere reporting on a shift in value chain essentials.

An organization's intellectual capital may be thought of as Caesar's segmentation of Gaul: "es omnis divisa in partes tres" that is, as being made up of three parts, in this case Human Capital, Structural Capital and Customer Capital. Very nice. Elegant, in fact, as you will come across "10 Keys to This" or "A Dozen Steps to That" (of which we are just as guilty, as you will note above).

Stewart begins with the most elusive Capital - and the most squandered during the re-engineering/downsizing heydays - Human Capital. He explores beyond the "People are our most important asset" platitude of almost every annual report to reveal the near-scandalous: "Routine, low-skill work, even if it's done manually, does not generate or employ human capital for the organization." You'll have to read the book to find out just which Human Capital generates wealth.

Structural Capital occupies two chapters, "Knowledge Management" and another near-scandal until you get into it: "The Danger of Overinvesting in Knowledge". How much Structural Capital does your organizations waste on the "push" variety of Structural Capital? You know, weekly reports you don't need, cc'd e-mails and faxes. By the way, Structural Capital is the stuff of databases and other means that enable knowledge transfer.

Third is Customer Capital, what executives are referring to when they reverently intone that their companies are, indeed, Market Driven. This is the basis of relationship marketing, data mining, single-sourcing, among others. This means really connecting with those who buy from you, thereby avoiding the destructive downward spiral of pricing wars.

[Actually, I misled you earlier. Stewart DOES offer "Ten Principles" (for managing intellectual capital). But that's O.K. They appear near the end, by which time the three Intellectual Capitals are firmly imbedded in your subconscious.]

The "piece de resistance" appears in the Appendix: "Tools for Measuring and Managing Intellectual Capital". Use these quantitative proofs of the pudding when you need to nail down tangible, bottom-line arguments for the green-eyeshade folks, arguments for capitalizing on the new economic wealth, especially as physical assets, the economic value representing the industrial age, transform into costly millstones.

You may go directly to Amazon's Web site to purchase this book at a discount by clicking on this link: