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Preface 11
Introduction 14
1. Introducing the Knowhow Company
The milk of knowledge 17
The knowhow-dependent society 18
What is a knowhow company? 18
The key resources 20
The main types of knowhow 23
Professional knowhow - the business idea 23
Managerial knowhow - increasing the company's value 23
Knowhow company categories 24
Information systems and the business idea 26
Computers- the factories and warehouses of the twenty-first century 28
Opportunities for the entrepreneur 28
Banking - a case in point 29
From service to knowhow 29
Buy solutions - not products 30
Europe's challenge of the 1990s 30
Solicitors and circuses 32
Summary 32
2. Knowhow Capital = Power
The poverty of money 34
The rise of venture capital 35
Knowhow capital bids for power 36
The power shift 36
Employees become employers 37
Summary 39
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MANGING KNOWHOW3. Information Society = Knowhow Society
The coming of the knowhow age 40
Investment in knowhow 40
The allure of the media industry 42
Databases 42
Knowhow is value-added information 43
Knowhow capital as a substitute for financial capital 44 Alfa-Laval - a nineteenth-century knowhow company 44
Sinclair Research 47
Knowhow orientation - the key to success 47
Why buy-outs work 48
The case of AGA 48
Lessons to be learned 49
Summary 50
4. Putting Knowhow Companies to Work
Business idea - personnel idea 51
The business idea belongs to the key people 51
Personnel idea 51
The laminated business - the onion 53
The marketing function 54
The accounting function 54
Structures 54
The network 55
The accounting system 56
Co-operation agreements 56
Property 56
Culture and ethics 58
Dramatis personae 58
'The professional' 59
The Knot - a cautionary tale 60
'The manager' 61
'The clerical staff 62
'The leader' 62
Unprofessional professionals 63
The personnel mix 63
The dilemma - the need for dual expertise 64
The hospital 65
Summary 68
5. Measuring Knowhow
Towards a new accounting system 69
How to measure success 70
Client studies 70
The case of Sales Consultants Ltd 71
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The invisible balance-sheet 73
Surplus profits 73
Amstrad 74
Key indicators for knowhow management 75
Knowhow capital 75
Return on knowhow capital 77
Efficiency and productivity 77
Stability - the knowhow risk 78
Summary 79
6. Structuring Knowhow
Legal structure 81
Ownership - power or investment? 81
Differentiating power from investment 82
Problems of employee ownership 82
The idea of partnership 84
Circulating equity 84
Two case studies 85
Helix 85
Ardos 86
Lessons to be learned 86
Summary 87
7. Leadership
The leader as patriarch 88
The leader as creator of the environment 89
The leader as tutor 89
The leader as the guarantor of continuity 90
The leader as a symbol of security 90
The leader as coach 91
The leader as manager 91
The case of Oxford Instruments 92
Lessons to be learned 93
The leader as knowhow tycoon 94
The case of Saatchi & Saatchi 94
The leader as despot 97
Summary 97
8. The Ten Success Factors of Knowhow Management
Factor 1: day-to-day leadership 98
Power of the initiative 100
Factor 2: quality and quality control 100
Factor 3: respect for knowhow 101
Factor 4: combination of professional and managerial knowhow 101
Factor 5: a strong, well-defined culture 101
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MANGING KNOWHOW8. MANAGING KNOWHOW
Factor 6: focus on core knowhow 102
Factor 7: knowhow preservation 102
Factor 8: developing the people 103
Factor 9: changing key people 103
Change leaders 103
Making oneself dispensable 104
Change - an opportunity 104
Changing professionals 105
Factor 10: stable structures 105
Summary 105
9. From Knowhow Company to Professional Organisation
Life-cycle dynamics and the age pyramid 107
The exhaustion of professional creativity 107
The 'spare tyre' effect 108
The life-cycles of the professionals 108
The ideal life-cycle 109
The components of the personnel idea 110
The recruitment idea. a strategic weapon 110
Consultancies 112
Lessons to be learned 113
Personnel development 114
Personnel motivation 118
Personnel departures 120
The living knowhow 120
Knowhow development 120
Knowhow transfer 121
The experience curve - knowhow leakage 121
Computer service bureaux 123
Summary 124
10. Making a Business out of Knowhow - the business idea
The case of Cergus 125
Lessons to be learned 127
Making a business out of knowhow 129
A limit to added value per individual 130
Maradona Inc. 130
Converting knowhow into business ideas 130
Connecting knowhow with financial capital 132
Centrum Invest 132
Four generic business ideas 134
'The consultant' 134
'The knowhow multiplier' 134
'The asset manager' 134
'The high-tech company' 136
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A business idea a day 137
Summary 138
11. Making a Business out of Knowhow-expansion and growth
Grow or die 139
Entrepreneurial business development 139
State supported development companies 140
The prime mover 141
The case of publishing 141
Two knowhow company start-ups 142
Venture Capital Report 142
Venture News 144
Lessons to be learned 145
Turn-Key Data 147
Lessons to be learned 147
Knowhow export 147
Service Management Group 148
Growth = expansion of the knowhow capital 148
Barclays Bank buys knowhow 149
American lawyers - big is not beautiful 151
Swedish advertising industry 152
The three strategies for growth 153
Organic growth 153
Growth by merger and acquisition 155
Merger mania 155
Mergers don't work 155
Merger problems of knowhow companies 156
Accountancy in Sweden 158
Combining capital and knowhow 159
The three phases of growth 160
Summary 162
12. Investing in Knowhow
The value of knowhow 163
Investing in a knowhow company 163
Capital intensive knowhow companies need money 164 Routine intensive knowhow companies may be good investments 164
Assessing risk 164
The value of a professional 165
The ten success factors for the investor 167
Dividing the spoils 171
Knowhow industries compared 172
The computer industry 173
Quoted knowhow companies in the UK 176
The value of the capital intensive knowhow company 177
Summary 177
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MANGING KNOWHOW 13. The Worm in the BudGeneralising the argument 178
The pro-team 179
Management of pro-teams 180
Istel Ltd - from pro-team to knowhow company 180
Lessons to be learned 182
A strategy for pro-team management 183
Top management is a pro-team 185
Summary 186
14. Knowhow and the Future
A paradigm shift in the information society 187
Knowhow life-cycles 188
A shift of paradigm 190
Transition 190
Imperfect markets 192
The professional ethos 193
Towards a knowhow future 193
Newspaper publishing 195
The advertising industry 196
The hunger for growth 198
Do the customers really want it? 198
Knowhow wars 199
Soliciting for growth 199
Mutiny in the ranks 201
Index 203
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