Setting The Standard For Intellectual Capital Management

U.S. News & World Report talks with LES' Bill Elkington on why intellectual capital management and standardization is critical for 21st century MBA programs and business

Bill Elkington

LES Immediate Past-President and Past-Chair Bill Elkington has served in leadership roles on the LES board for the past several years. U.S. News & World Report Reporter Ilana Kowarski recently spoke with Elkington, who detailed why it's important for MBA students to focus on the management of ideas and knowledge—also known as intellectual capital management—when pursuing courses of study in operations, both quality control and production. The questions and answers below were pulled from a transcript of the full interview prior to editing and publication. Read the full October 8th article in U.S. News & World Report titled "5 Things to Know about an MBA in Production or Operations Management."

U.S. News & World Report: "In your mind, why do MBA students concentrating in operations and production need to know about intellectual capital management?"

Elkington: "A production or operations management curriculum that doesn't discuss intellectual capital management is incomplete. Understanding how to protect trade secrets and shield original business ideas from competitors is a key component of being an effective operations manager."

"It's important to realize that 80 percent of the equity value of a publicly traded company today is in its intellectual capital. So the future of such a company depends on the safeguarding of its intellectual capital."

U.S. News & World Report: "Are there limitations on the future career possibilities for students that concentrate in the area of operations and production?"

Elkington: "A degree in this field offers abundant career flexibility and can lead to a high salary. A common misconception about production or operations management careers is a concern that pursuing these courses of study will lead to lower salaries and more limited career options than specializing in money management disciplines like finance and accounting. I think MBA students think that finance and accounting are where they're going to make the most money, and operations and production are where you're going to make the least money. That's simply not so."

U.S. News & World Report: "What types of careers does an MBA in production or operations management make possible?"

Elkington: "Managing operations functions include managing factories, managing manufacturing processes, managing quality, and managing supply chains. Understanding all these areas is a great way to prepare to manage a company's products and services, which could easily lead to general management of a profit and loss center. Understanding how these several areas of operations work can be fundamental to managing any manufacturing based business."

U.S. News & World Report: "What are some of the key considerations in intellectual capital management?"

Elkington: "Risk mitigation and value creation, preservation, and enhancement are a couple of the central concepts. How efficiently do you translate R&D and other types of investments into sales and profits? How good are you at identifying and implementing new value-enhancing business models? It may be important to create a dashboard to keep track of how well you are managing your intellectual capital. But look, we are just beginning to sort these ideas out. We are in the early stages of creating the discipline of intellectual capital management, similar to where we were 70 years ago during the development of the quality management field.

"The British Standards Institute (BSI) developed an early quality management standard, which has now morphed into the globally recognized ISO 9001 Quality Management Standard. These days, quality management is a key area of academic study, which had its beginnings in BSI's early work. LES Standards is creating early versions of intellectual capital management standards that will in like fashion form the foundation of the emerging field of intellectual capital management."

Read LES Viewpoints December 2018 Edition here