In this world of hyperchange in virtually every industry, it’s […]

In this world of hyperchange in virtually every industry, it’s time to think about ideas as a new form of capital available to your organization: Idea Capital.

What is idea capital?

Idea capital, referring to the inventory (or stock) of existing ideas as well as the latent creative potential of an organization, doesn’t appear on a balance sheet but it walks into your buildings every morning and leaves every evening. Unlike financial capital, idea capital is difficult to measure and it’s more difficult to buy. Idea capital is a fundamental ingredient to the innovation process of creating new markets and new shareholder value.

Idea capital isn’t something you can touch but you know when it’s there. It shows itself when passion and problem-solving intersect. Idea capital is a key product of the human resources management cycle of hiring, training, motivating and inspiring employees. And idea capital does not come from employees alone. Customers, partners and volunteers can all contribute to your idea capital.

The “innovation process” as it is all too easily described today, focuses on creating greater stocks and faster flows of idea capital, transforming it into product and service capital that eventually drive tangible revenue transactions.

Now imagine a world in which today’s financial statements are supplemented by “intellectual capital statements” that include a component of idea capital and investors can consistently compare and evaluate within and across industries. That will be the wonderful day that directors begin asking the question: “How is our idea capital creating shareholder value?”

Want a straightforward way to begin measuring and grow your idea capital? Here are some steps you can take:

  1. Measure the number of ideas in your organization today. (That, in and of itself, is a challenge!)
  2. Motivate your employees and your broad stakeholder group of customers, partners and volunteers to grow the number of ideas (stock) created by and flowing into your organization.
  3. Wrap a business model around the ideas, place a financial value on them and turn the highest value ideas – those ideas that can change the industry – into projects and prototypes. This is a cross-section of strategy and tactical execution.
  4. Take your new product and services prototypes to your customers. Market and Sell like there’s no tomorrow.
  5. Learn from your mistakes and go back to Step #1.


A challenge to today’s HR and finance leaders: Think about this….Can you measure and communicate the idea capital in your organization? Is it growing or eroding? Is it full of high quality ideas or plagued with mediocrity? If you are coming up with unsatisfactory answers, it’s time to rethink your Idea Capital strategy.

Alan Wunsche is President of Leading Knowledge Ltd., a strategic marketing and human capital management consultancy globally serving knowledge-based enterprises.  Alan frequently contributes to advances in value innovation and intellectual capital through his blog at Leading Knowledge.