Archive for the ‘Hypothesis’ category

New service by the strategicanalysis blog

October 27, 2007

The strategicanalysis blog will start providing to its readers, texts in Greek & English dealing with the issue of “Illegal immigration, postmodern intellectual thinking against the interests of the nation state and corruption”.

One of the main issues of the contemporary society is the threat posed by pseudo-intellectuals that call towards the abolition of the notion of the nation-state, the state security and in general assist greatly for the degradation of the security of the people. In an era were the perils of terrorism (Mainly of Islamic origin), organized crime networks and mass movements of populations from the South & East to the North & West; there is a crystal clear need of addressing the aforementioned.

The intellectual retardeness of the “Novo intellengia” has inflicted great pains into the security systems of the Western states mostly, whilst it indicates a sense of decadence for the societal fabrics of these countries. It is absolutely necessary for the common man and the state official alike to analyze the current trends that call for the ultimate destruction of its own society and synthesize manners and ways of combating the malicious “Politically correct” notion.

The era of apathy has seen Europe and the USA in particular loosing ground and becoming the hotbed of growing social unrest that was created as a result of the introduction of failed social policies and the spread of the “Politically correct” below-average state-bureacrats and intellectuals. The clock is ticking and it is already the high-time for some conclusive schemes and results.

For the rest… Enjoy!

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FRANCE : The 10 commandments of Competitive Intelligence

July 8, 2007

1. Define information needs. An competitive intelligence process should start with a precise analysis of the information needs of the decision-makers, coworkers and employees within a company. On the basis of this work, it is up to the management to decide what the priorities are and consequently to set orientations for information research.

2. Gather open information. It is estimated that approximately 90% of information useful to a company is openly published ; which is what is called “formal” information. With the development of new information technologies, the mass of data available has become enormous ; identifying relevant information in this ever growing flow requires having suitable computer tools.
3. Don’t forget “informal” information. And yet, the small share of useful information that is not available in open literature is often that which provides the greatest added value to the company. It is possible to gather it legally and ethically through work in networks (interviews with contacts) and in the field (for example, during conferences, trade shows and professional events), and through constant monitoring of new, potentially useful sources of information.

4. Rank and process the information gathered. For it to be able to truly support a decision, the information must be evaluated, grouped, analyzed and synthesized. This process can also use tools for advanced information processing. It should also lead, if necessary, to consultations with experts in the fields in question.

5. Diffuse the information in a timely manner. An effective competitive intelligence process diffuses relevant information to the right people at the right time and in the most suitable form. Mastering the logic of circulating data ensures successful, targeted distribution, making it possible to extend it to new decision-makers. For this, an information circulation scheme must be set up and a culture of exchange is needed within the company.
6. Measure the satisfaction of the recipients. The only way to ensure that the information delivered corresponds to the needs of the recipients is to ask ! This feedback is the way to evaluate the usefulness of the information provided so as to meet the needs of the decision-makers and operational agents.
7. Protect sensitive data and know-how. Some information and know-how constitutes precious assets that the company must know how to protect through suitable computer, organizational, human and legal measures.
8. Influence the environment. Information can also be used as a lever for action to promote one’s interests within a legal context (lobbying, influence communication, Internet use, etc.). On the other hand, the company must be vigilant as to the use of these methods against it or even of illegal processes such as disinformation.
9. Definitively banish naiveté while avoiding paranoia. A pragmatic, realistic, operational attitude should be adopted : a state of mind combining vigilance and openness.

10. Get everyone’s support. The success of an competitive intelligence process requires not only the mastery of competitive intelligence by one or more professionals, but also the active participation of all employees. Awareness of information sharing and the network culture is therefore essential. This presupposes a strong commitment from the management and the company where everyone should gather useful information to be able to transmit it to the concerned actors.

Source: http://www.intelligence-economique.gouv.fr/rubrique.php3?id_rubrique=47

    

Bibliography on organizational change

November 2, 2006

1)Bukowitz, Wendi R. and Ruth L. Williams. New metrics for hidden assets. Journal of Strategic Performance Measurement 1, no.1 (February-March 1997): 12-18.
A new measurement tool, the knowledge management assessment tool (KMAT), looks at the inputs to the knowledge management process and examines how companies perceive their own performance. This article examines process measurement using the results of the KMAT tool and explores how some companies view their own performance in knowledge management.
2)Davenport, Thomas H., Sirkka L. Jarvenpaa and Michael C. Beers. Improving knowledge work processes. Sloan Management Review 37, no.4 (Summer 1996): 53-65.
Authors suggest that organizations choose reengineering approaches which reflect the type of knowledge work, the organizational culture, and the project’s business requirements. In their definition, the primary activity of knowledge work is the acquisition, creation, packaging, and application of knowledge. Characterized by variety and exception rather than routine, knowledge work is performed by professionals or technicians with top skills and expertise. Organizational management must be aware that although it is wise to view knowledge work from a process perspective, there are significant differences in that those who deal with knowledge work tend to resist structured approaches more than those who handle administrative and/or operational work. Knowlege work tends to be “untidy”. Twenty years ago, Drucker noted that “To make knowledge work productive will be the great management task of this century, just as to make manual work productive was the great management task of the last century”; today, according to the authors of this essay, an organization’s core competencies must focus on managing knowledge and knowledge workers now and in the future. A viable approach to improving knowledge work is needed; the authors suggest ceding day-to-day task control to the professional worker while maintaining control and direction over strategic issues.
3)Davenport, Thomas H. and Laurence Prusak. Working knowledge: how organizations manage what they know. Cambridge: Harvard Business School Press, 1997. 224 pp.
According to the publishers, this book will establish enduring vocabulary and concepts and serve as the hands-on resource of choice for organizations that recognize knowledge as “the only sustainable source of competitive advantage”. The authors examine all types of organizations to see how they analyze, measure, and manage their intellectual assets. In the process, they consider the key cultural and behavioral issues managers must address to effectively use knowledge; what are the best ways to incorporate technology into knowledge work; and, what does a successful knowledge project look like, how do you know whether it has succeeded? (Taken from HBS Manager’s Bookshelf feature selection review).
4)Garvin, David A. What makes for an authentic learning organization? Management Update: Newsletter from Harvard Business School 2, no.6 (July 1, 1993): 7-9.
Before people and organizations can improve, they must first learn the fundamentals of meaning, management, and measurement. Focusing on learning aims at a fundamental shift in orientation, whereas continuous improvement can be aimed at relieving symptoms instead of purposefully modifying behavior based on new knowledge and insights.
5)Kim, Daniel H. Toward learning organizations: integrating Total Quality Control and systems thinking. Cambridge, MA: Pegasus Communications, 1997. 17 pp. (Shelved at HD62.15.K55 1997).
Total Quality Control (TQC)-driven environments are based on advancing continuous improvement at every level of the organization. To accomplish this improvement, there must be an emphasis placed on becoming a learning organization, not only at the operational level, but also at a conceptual level, where mental models need to be altered as the organization’s deep-rooted assumptions and norms are challenged in order to reframe problems and generate radically different solutions. Learning organizations will benefit from using the seven TQC tools (Pareto chart, cause-and-effect diagram, stratification, check sheet, histogram, scatter diagram, and control charts) as analytical means of understanding and improving processes. A systems level of thinking is needed to advance management thinking at the conceptual level where the constituent parts are synthesized. At the point of synthesis, functions striving to optimize their own performance can lead to overall functional gridlock unless systems thinking provides a framework for understanding the importance of managing the interconnections, gaining insight into the nature of complex systems, and testing assumptions about the effect of change upon the system. The author calls the integrated TQC and systems thinking approach Systemic Quality Management (SQM), a model which includes tools falling into four broad categories: brainstorming tools, dynamic thinking tools, structural thinking tools, and computer-based tools. Kim asserts that managers, as experimental researchers formulating theories and conducting controlled tests, should be responsible for enhancing the quality of their thinking and rethinking, not just the quality of their doing.
6)Mattimore, Bryan W. 99% inspiration: tips, tales & techniques for liberating your business creativity. New York: American Management Association, 1994. 236 pp. (Shelved at HD53.M374 1994).
1/98 version: This book suggests tips and techniques for tapping hidden, creative strengths in order to solve a wide range of workplace issues, including product development, naming products and services, cost cutting, business writing and speaking, and process reengineering.
7)McMaster, Michael D. The intelligence advantage: organizing for complexity. Boston: Butterworth-Heinemann, 1996. xxiii, 245 pp. (Shelved at HD31.M3856 1996).
In exploring the possibilities of human organization, the author aims to provide access to a way of thinking and questioning that is capable of transforming organizations to meet the demands of the Information Era. If we intend to create a complex intelligent system through organizational change, then each instance of a blockage or breakdown is an opportunity to discover the natures of the old structures and an occasion for creativity in designing new structures.
8)McMaster, Michael D. Organizational theory. In The intelligence advantage: organizing for complexity. , 43-105. Boston: Butterworth-Heinemann, 1996. (Shelved at HD31.M3856 1996).
In this section, the basis for a new theory of organization based on complexity is developed. The theory calls for freedom designed with an understanding of complex intelligent systems and their self-organizing nature. The process of breaking free begins with a leadership able to understand the grip of the past, as well as grasp the nature of possiblity, and willing to lead by example.
9)Miles, Raymond, Charles C. Snow, John A. Mathews, Grant Miles and Henry J. Coleman. Organizing in the knowledge age: anticipating the cellular form. Academy of Management Executive 11, no.4 (November 1997): 7+ (BRP232; also available online through Proquest).
1/98 version: The focus of the US economy has shifted first to information-intensive industries such as financial services and logistics, and now toward innovation-driven industries, such as computer software and biotechnology, where competitive advantage lies mostly in the innovative use of human resources. This was a move from the era of standardization to customization, and the new organizational form found most helpful has been the network organization which can respond rapidly to demands for new products and services. The coming century is predicted, by the authors, to be the era of innovation. The new organizational form will rely on clusters of self-organizing components collaboratively investing the organization’s know-how in product and service innovations for markets they have helped to create and develop. Such organizations can best be described as cellular, suggesting a living, adaptive organization, able to respond rapidly to new demands.
10)Morecroft, John D. W. and John D. Sterman. Modeling for learning organizations. Portland, OR: Productivity Press, 1994. 400 pp. (Shelved at HD30.4.M626 1994).
To improve effective functioning within complex systems, building models can be used to test how an organization works in order to test policies, discover thinking flaws, and understand sensitivities and leverage points. This collection of essays by leading system dynamicists demonstrates how modeling can support organizational learning.
11)Nadler, Gerald and Shozo Hibino. Breakthrough thinking: why we must change the way we solve problems, and the seven principles to achieve this. Rocklin, CA: Prima Publishing, 1990. 350 pp.
1/98 version. “Breakthrough Thinking” is a conscious mode of thinking that applies seven proven principles of successful solution-finding to any problem you, your group, or your company may face. It is best to apply all seven principles at the concurrently and constantly, but at least, the reader should always apply the two essential principles: uniqueness and purposes. Each problem must be treated as unique from the outset. Secondly, all the purposes- uses, intents, objectives – must be considered not just at the outset, but throughout the process as many more purposes emerge with scrutiny and creative thinking.
12)Nevis, Edwin C., Anthony J. DiBella and Janet M. Gould. Understanding organizations as learning systems. Cambridge: MIT, [1997]. 15 pp. (BPR226; available online at http://learning.mit.edu:80/res/wp/learning_sys.html).
The authors provide a framework for examining an organization, based on its “learning orientations,” a set of critical dimensions to organizational learning, and “facilitating factors,” the processes that affect how easy or hard it is for learning to occur.
13)Savage, Charles M. Fifth generation management: co-creating through virutal enterprising, dynamic teaming, and knowledge. Revised ed. [Bedford, MA]: Digital Press, 1997. 341 pp.
Savage offers suggestions for helping management get out of the Industrial Era and into the Knowledge Era.
14)Senge, Peter. The fifth discipline: the art and practice of the learning organization. New York: Currency, Doubleday, 1994. xiii, 593 pp.
Senge describes how organizations suffer from learning disabilities that prevent them from seeing threats and opportunities. He effectively demonstrates the need to become a learning organization.
15)Sugarman, Barry. Notes towards a closer collaboration between organization theory, learning organizations and organizational learning in the search for a new paradigm. Cambridge: MIT, [1997]. 22 pp. (BPR225; available online at http://learning.mit.edu:80/res/kr/Sugarman.html).
The existing paradigm of management and organization has been found deficient and a new paradigm is needed. According to the author, his paper, a collection of short essays on key topics in the relationships between organizational theory, learning organizations, and organizational learning, can serve as a “reader’s guide” to the field, as well as a “notebook” of ideas. In his recap, Sugarman notes some ideas that may be crucial for the final breakthrough to a new paradigm. He ends his paper admitting that he has no clear conclusion as to what the new paradigm will look like, but that knowledge creation will likely occupy an important role, and digital technology will play two roles — one in implementing the new way and one in providing a metaphor for understanding it. This is a very well-written, well-organized article, helpful for anyone in need of a background in organizational theory.
 

Knowledge Transfer

October 28, 2006

By Yogesh Malhotra
“The best information environments will
take advantage of the ability of IT to
overcome geography but will also
acknowledge that the highest bandwidth
network of all is found between the water
fountain and the coffee machine.”
The Three Components of Knowledge Management:

• Knowledge generation.
Includes all activities, which brings to light knowledge
that is “new” to the individual, to the group, and to
the organization.

• Knowledge codification.
Representation of knowledge so that it can be “reused”
either by an individual or an organization.

• Knowledge transfer.
“Movement of knowledge from one location to
another”.
Means of Knowledge Transfer
􀂃 Knowledge Fairs – E&Y, CSIRO
􀂃 Unstructured, Ad Hoc
􀂃 versus Structured, Micro-Planned Conferences
􀂃 Japanese Talk Rooms
􀂃 Knowledge Markets – Any organization that exchanges for other things of value – money, respect,promotions, or knowledge
􀂃 Communities of Practice – knowledge flows best through networks of people with similar interest
Tacit: Knowledge not easy to visualize and express. Highly personal and hard to formalize.

Explicit: Can be expressed in words and numbers and can easily be communicated and shared in the form of hard data.
Knowledge conversion: Tacit and Explicit knowledge interact and interchange into each other in the creative activities of human beings. Knowledge is created through social interaction of the two types of knowledge!
Tacit and Explicit Knowledge
Tacit Knowledge

– Embedded in the human brain
– Cannot be expressed easily
– Requires extensive personal contact
– Mentorship networks
– Knowledge Maps, Video conferencing

Explicit Knowledge
– Can be easily codified,
– Embedded in procedures,
– Represented in documents,
– Transferred with reasonable accuracy
Cultures of Knowledge Transfer
• Lack of trust
• Different, cultures, language, mental models
• Lack of time and meeting places
• Status and rewards issues
• Lack of absorptive capacity
• Not-invented-here syndrome
• Intolerance for errors and mistakes
“the movement of knowledge within the organization is a distinct experience, not a gradual process of dissemination, and depends on the characteristics of everyone involved”
Transfer of knowledge does not denote a full replication of the knowledge in the receiving unit. Indeed, knowledge is often modified in the receiving unit. The key element in knowledge transfer is not the underlying (original) knowledge, but rather the extent to which the receiving subsidiary receives potentially useful knowledge and utilizes this knowledge in its own operations.
Knowledge Transfer
• Four different modes of knowledge
conversion

– Socialization
– Externalization
– Combination
– Internalization

Socialization: “The process of sharing experiences and thereby creating tacit knowledge, such as shared mental models
and technical skills. The key to acquire tacit knowledge is experience. Without some
shared experience, it is extremely difficult for one person to project her/himself into another individual‘s thinking process.”

Externalization: “The process of articulating tacit knowledge into explicit concepts. It may however be difficult to find an adequate verbal expression for a mental image trough use of analytical methods alone. Externalization is therefore often driven by metaphor and/or analogy.”

Combination: “The process of systematizing concepts into a knowledge system, i.e. combining different bodies of explicit
knowledge. This entails reconfiguration of existing information, where sorting, adding, combining and categorising of explicit knowledge can lead to new knowledge.”
Internalization: “This process is closely related to ‘learning by doing’. When tacit knowledge is incorporated and applied in a person‘s or an organization’s tasks. In this conversion mode it helps if knowledge is verbalized or diagrammed into documents or oral presentations.”
Tools of Knowledge Transfer
• Knowledge generation
• Knowledge codification
• Knowledge transfer – spirals
• Tools
– Data management tools- data warehouses, data search
engines, data modeling, visualization
– Information management tools – automated information
search and retrieval agents, decision support
technologies, executive information systems, document
management technologies
– Knowledge management
 

Knowledge Assets in the Global Economy: Assessment of National Intellectual Capital

October 14, 2006

By Yogesh Malhotra

Journal of Global Information Management

July-Sep, 2000, 8(3), 5-15.
Abstract

This article has the following objectives: developing the need for assessing knowledge capital at the national economic level; review of a national case study of how intellectual capital assessment was done in case of one nation state; suggesting implications of use of such assessment methods and needed areas of advancement; and highlighting caveats in existing assessment methods that underscore the directions for future research.  With increasing emphasis on aligning national information resource planning, design and implementation with growth and performance needs of business or nation, better understanding of new valuation and assessment techniques is necessary for information resource management policymakers, practitioners and researchers.

Keywords: National Intellectual Capital, Information Resource Management, Knowledge Capital, Intangible Assets, Structural Capital, Human Capital
Introduction

Emergence of the service society after the last world war brought increased realization of role of employees’ knowledge and creativity in adding value to the company.  Attempts to capitalize company investments in people on the balance sheet in the 1970s failed because of measurement problems.  The subject gathered increased interest more recently in the 1990s, with the rapid emergence of information and communication technologies (ICT).  As business processes became increasingly ‘enabled’ by large-scale information systems, information systems designers attempted to capture employees’ implicit and explicit knowledge in “corporate memory” by means of intranets and other similar applications (Malhotra, 2000a, 2000b). 

It was recognized, that in contrast to the knowledge of individual employees, such corporate memory does form part of a company’s capital.  Accordingly, “knowledge” has become a key production factor, however the financial accounts are still dominated by traditional factors of production, including buildings and machinery.  Hence, there is an imperative need for developing an understanding of “knowledge capital”, or the so-called intangible assets.  The topic is not only pertinent to individual enterprises, but also to national economies that are making a rapid transition to a society based on knowledge work.  This article develops the case for assessment of national intellectual capital by drawing upon existing research, practice and a recent study of an Asian nation representative of countries making a transition from ‘developing’ to ‘developed’ status.  The issues discussed herein are important for information resource management policymakers, practitioners and researchers for assessing their contributions in terms of new measures of performance.  More importantly, as the world economies transition from the world of “atoms” to world of “bits,” they would be expected to plan, devise and implement information and knowledge management systems that provide differential advantage in terms of ‘intellectual capital.’ 

Knowledge Assets and Intellectual Capital

Traditional assessment of national economic performance has relied upon understanding the GDP in terms of traditional factors of production – land, labor and capital.  Knowledge assets may be distinguished from the traditional factors of production – in that they are governed by what has been described as the ‘law of increasing returns’.  In contrast to the traditional factors of production that were governed by diminishing returns, every additional unit of knowledge used effectively results in a marginal increase in performance.  Success of companies such as Microsoft is often attributed to the fact that every additional unit of information-based product or service would result in an increase in the marginal returns.  Given the changing dynamics underlying national performance, it is not surprising that some less developed economies with significant assets in ICT knowledge and Internet-related expertise are hoping to leapfrog more developed economies. 

Despite increasingly important role of knowledge-based assets in national performance, most countries still assess their performance based on traditional factors of production.  Today’s measurement systems are limited in their capability to account for tacit knowledge embedded in the human resources, although there is some agreement on measuring other categories of knowledge, including patents and trademarks.  However, the emerging knowledge economy is characterized by industries that are more knowledge intensive and by goods and products that are more intangible than they were in the post-industrial economy.  Knowledge assets or intellectual capital may be described as the “hidden” assets of a country that underpin its growth, fuel its growth and drive stakeholder value.  There is increasing realization about knowledge management as the key driver of national wealth, the driver of innovation and learning, as well as that of the country’s gross domestic product (GDP).  Increasing importance of knowledge assets and intellectual capital have been drawing greater attention of not only company CEOs, but also national policymakers, to non-financial indicators of future growth and performance. 

Knowledge asset measurement relates to the valuation, growth, monitoring and managing from a number of intangible but increasingly important factors of business success.  In the context of knowledge assets, knowledge represents the collective body of intangible assets that can be identified and is measurable.  This interpretation of knowledge differs from the notion of knowledge as knowing and learning, which concerns how organizations acquire, share and use knowledge – either helped or hindered by technology and organizational processes.  In contrast, the notion of knowledge assets is about the identifiable aspects of the organization that although “intangible” can be considered as adding some kind of value to it.  Knowledge capital is the term given to the combined intangible assets that enable the company to function.  Examples of such knowledge assets could include shared knowledge patterns and service capability and customer capability. 

Assessment of Knowledge Capital and Intellectual Assets

The worth of knowledge assets, taking the difference between market and book values as a proxy, is hidden by current accounting and reporting practices.  However, as evident from current valuations of many Net-based enterprises, one observes a significant widening gap between the values of enterprises stated in corporate balance sheets and investors’ assessment of those values.  The increasing proportion of intangible vis-à-vis tangible assets for most industrial sectors has been affirmed by various other observations (Edvinsson and Malone, 1997; Hope and Hope, 1997; Stewart, 1995).  In case of major corporations, often such high market valuations are attributed to brands.  Recent business history has shown that huge investments in human capital and information technology are the key tools of value creation that often do not show up on company balance sheets as positive values themselves. 

Measurement of institutional or organizational value in the current business environment using traditional accounting methods is increasingly inadequate and often irrelevant to real value in today’s economy.  For instance, while traditional accounting practices often treat brand as depreciable entity over time, in today’s economy, intangible assets like brands and trademarks often increase in value over time, often longer than the time periods accounted for their depreciation.  Even, specific kinds of valuations of intellectual capital, such as patents, copyrights and trademarks are not valued according to their potential value in use, but recorded at registration cost.  Similarly, the distinction between assets and expenses is made arbitrarily on many balance sheets: an advertising campaign could be recorded in either column as evident from a case such as that of AOL.  The traditional balance sheet, a legacy of last five centuries of accounting practices, provides a picture of historic costs, assuming that the cost of purchase reflects the actual value of the asset.  However, it does not account for the hidden value inherent in people’s skill, expertise and learning capabilities, the value in the network of relationships among individuals and organizations or the structural aspects relevant to servicing the customers.  These hidden values or intangible assets assume increasingly important role in an economy that is characterized by a transition from ‘programmed’ best practices to ‘paradigm shifts’ that characterize the new business world of ‘re-everything’ (Malhotra, 2000c).  Such factors are assuming greater importance in assessment of the potential for future growth of an enterprise or a national economy. 

This issue is compounded by an apparent paradox: the more a company invests in its future, the lesser is its book value [although the recent astronomical caps for various Net-related stocks suggest increasing realization about intangible assets].  Extrapolating the case of such companies to the organizations within a national economy, one may understand the implications for accounting for intangible assets that do not show up in accounting reports, but may underpin their future success or failure. 

Valuation from the perspective of intellectual capital and knowledge assets takes into consideration not only financial factors, but also human and structural factors (Stewart, 1997).  Stewart defines intellectual capital as the intellectual material that has been formalized, captured, and leveraged to create wealth by producing a higher-valued asset.  Intellectual capital is defined as encompassing: i) human capital; ii) structural capital; and iii) relational capital.  These aspects of intellectual capital include such factors as strong business relationships within networked partnerships, enduring customer loyalty, and employee knowledge and competencies.  The compelling reasons for valuation and measurement of intellectual capital and knowledge assets include understanding where value lies in the company and the sectors of the national economy and for developing metrics for assessing success and growth of companies and economies. 
Measuring Knowledge Assets and Intellectual Capital

Managers of enterprises and national economies are trying to find reliable ways for measuring knowledge assets to understand how they relate to future performance.  The expectation from finding reliable measures of knowledge assets is that such measures can help managers to better manage the intangible resources that increasingly determine the success of the enterprises and economies.

The terms knowledge capital and intellectual capital are used synonymously in this article.  Within the scope of subsequent discussion, such terms refer to “the potentiality of value as it exists in various components or flows of overall “capital” in a firm; the relationships and synergistic modulations that can augment the value of that capital; and the application of its potential to real business tasks… [it] includes an organization’s unrefined knowledge assets as well as wealth generating assets whose main component is knowledge” (Society of Management Accountants of Canada 1999, p. 17). 

One may observe that it is the application of intellectual capital to practical situations that contributes, primarily, to the translation of its potential value to financial assets.  Or as observed by Stewart (1997, p. 67): “Intelligence becomes an asset when some useful order is created out of free-floating brainpower – that is, when it is given coherent form (a mailing list, a database, an agenda for a meeting, a description of a process); when it is captured in a way that allows it to be described, shared, and exploited; and when it can be deployed to do something that could not be done if it remained scattered around like so many coins in a gutter.”  Unless effectively utilized and applied, knowledge assets may not necessarily yield any returns in terms of financial performance measures.  In other words, “knowledge assets, like money or equipment, exist and are worth cultivating only in the context of strategy… you cannot define and manage intellectual assets unless you know what you are trying to do with them” (Stewart 1997).  [For instance, a detailed account of how knowledge management is relevant to e-business strategy and performance is presented in a forthcoming article (Malhotra 2000c).] 

The subsequent discussion reviews the case of an Asian nation state that utilized one of the more popular methods for assessment of its national intellectual capital.  Concluding discussion will highlight the existing caveats in the adopted methodology and underscore the important issues that need to be addressed in future research and practice. 

Knowledge Capital of a Nation State: The Case of Israel

The nation state of Israel, having been classified as an industrialized nation in April 1997, represents an interesting case study for both less developed countries as well as industrialized nations.  Having bridged this gap over its recent past, it provides a vantage point for understanding the transition from both sides of the industrial divide.  Since 1950, Israel’s economy has grown 21-fold resulting in overall rapid development resulting in significant growth in per capita income and an exponential increase in the number of hi-tech start-up companies.  These developments have occurred despite a population growth of 330% and periodic wars that have impacted the region’s economies.

A popular method of assessment of intellectual capital originally proposed by the Swedish company Skandia was recently applied to a joint Swedish-Israeli study that examined how to assess Israel’s intellectual capital.  The study represented the first attempt to document Israel’s core competencies, key success factors and hidden assets that provide comparative advantage and high potential for growth.  The study compared Israel with other developed countries, [not developing countries] since the objective was to assess the country’s ability to compete with other industrialized nations in the global economy.  The study aimed to develop an assessment of intellectual capital of the country, which along with the more traditional focus on financial capital, could help in an integrated and comprehensive view of the nation’s assets as well as its potential for future growth.  The study used Skandia’s model for measuring intellectual capital, a model that had been earlier used for developing the Intellectual Capital Balance Sheet for Sweden.

Skandia Model for Measuring Intellectual Capital

In Skandia’s view, intellectual capital denotes intangible assets including customer/market capital; process capital; human capital; and renewal and development capital.  The value of intellectual capital is represented by the potential financial returns that are attributable to these intangible or non-financial assets.  

The Skandia model attempts to provide an integrated and comprehensive picture of both financial capital and intellectual capital.  Generally, the national economic indicators supported by hard quantitative data are used for examining the internal and external processes occurring in a country.  However, the model questioned if such indicators provided a full and accurate assessment of the country’s assets and if they provide an indication of its potential for future growth.  In doing so, it developed the framework of intellectual capital as a complement of financial capital. 

In this model, there are four components of intellectual capital: market capital (also denoted as customer capital); process capital; human capital; and renewal and development capital.  While financial capital reflects the nation’s history and achievements of the past; intellectual capital represents the hidden national potential for future growth.  The value chain according to Edvinsson and Malone (1997, p. 11) expresses the various components of market value on the basis of the following model:

Market Value = Financial Capital + Intellectual Capital

The key determinants of hidden national value, or national intellectual capital, are human and structural capital, defined thus:

Intellectual Capital = Human Capital + Structural Capital

Human Capital: The combined knowledge, skill, innovativeness, and ability of the nation’s individuals to meet the tasks at hand, including values, culture and philosophy.  This includes knowledge, wisdom, expertise, intuition, and the ability of individuals to realize national tasks and goals.  Human capital is the property of individuals, it cannot be owned by the [organization or] nation. 

Structural Capital: Structural capital signifies the knowledge assets that remain in the company when it doesn’t take into consideration human capital that is the property of individual members.  It includes organizational capital and customer capital [also known as market capital].  Unlike human capital, structural capital can be owned by the nation and can be traded. 

Structural Capital = Market Capital + Organizational Capital

Market Capital: In the context of the original model applied to market enterprises, this component of intellectual capital was referred to as customer capital to represent the value embedded in the relationship of the firm with its customers.  In the context of national intellectual assets, it is referred to as market capital to signify the market and trade relationships the nation holds within the global markets with its customers and its suppliers.

Organizational Capital: National capabilities in the form of hardware, software, databases, organizational structures, patents, trademarks, and everything else of nation’s capabilities that support those individuals’ productivity through sharing and transmission of knowledge.  Organizational capital consists of two components: process capital and, renewal and development capital. 

Organizational Capital = Process Capital + Renewal & Development Capital

Process Capital: National processes, activities, and related infrastructure for creation, sharing, transmission and dissemination of knowledge for contributing to individual knowledge workers productivity. 

Renewal and Development Capital: This component of intellectual capital reflects the nation’s capabilities and actual investments for future growth such as research and development, patents, trademarks, and start-up companies that may be considered as determinants of national competence in future markets.
Process of Measuring Intellectual Assets: 

This article covers an overview of the various factors that were taken into consideration for assessing national intellectual assets for Israel.  The details about the study and related statistical data about Israel are the subject of the report The Intellectual Capital of the State of Israel (Pasher, 1999).  In this article, discussion will focus on only key aspects of the national intellectual capital assessment process with the motivation of providing a general framework that could be adapted for similar assessment for other national economies and businesses. 

The process of assessment of national intellectual assets as applied in the case of Israel was made of four phases: developing a vision of the nation’s future; identifying core competencies needed to realize the vision; identifying the key success factors for such competencies; and, identifying the key indicators for the key success factors.  The vision for the country’s future was identified through brainstorming sessions and interviews with national leaders in various fields relevant to country’s future growth and performance as well as young leaders whose views were relevant to the country’s future progress.  The core competencies devolved from the above process and its participants.  These competencies were mapped in the form of clusters along each of the dimensions of intellectual capital based on Skandia’s model discussed earlier.  The key success factors, or the most important determinants of the respective competencies needed for future performance, were identified.  Specific indicators that were considered reliable measures for the critical success factors were than determined based on analysis of historical data as well as the analysis of the results of brainstorming sessions and interviews. 

The study found the vision of Israel has the substantiation of its position as a developed, modern, democratic and pluralistic nation attractive to world Jewry, investors, tourists and its citizens.  Two key areas that were determined relevant to Israel’s future growth and progress included – enhancement of quality of life of the citizens, and, making it attractive for future generations by improving its standing among developed nations.  While the former goal could be achieved through cultural and regulatory interventions, the latter goal was to be achieved through economic growth fuelled by knowledge-based industries.  It was also determined that both these growth related areas would depend upon the country’s capability in nurturing peaceful relations in the geographical region that has been characterized by periodic inter-country wars. 

The study identified the key competencies necessary for nation’s current and future performance and clustered them along the five components of a nation’s balance sheet: financial capital, market capital, process capital, human capital, and, renewal and development capital.  The specific indicators identified for each of the components represent the criteria that represent long-term competitive strength of Israel in comparison with other countries.  As noted earlier, the specific criteria that are used as indicators of each of the components may differ for other countries. 

Financial Capital: As noted before, financial capital is an indicator of a nation’s past success and achievements.  The valuation of the assets as they appear on a traditional balance sheet does not reflect the nation’s real value as assessed by the global market.  This component of the nation’s balance sheet is based upon past performance and statistical data that express the rate of change in tangible assets.  Such factors include gross domestic product (GDP), dollar exchange rate, external debt, unemployment, productivity rates within various sectors of the national economy, breakdown of exports according to industries, and inflation.

Gross Domestic Product (GDP): This indicator represents the total value of all services and goods produced in the country.  The change in the GDP per capita (in real terms) represents the change in the citizens’ well-being and in the country’s economic strength.  Since its origin, Israel has enjoyed rapid economic growth: its GDP per capita (in real terms) has grown from $3,500 annually in 1950 to $17,200 in 1995, although interrupted by a stagnation and recession in 1996.  In terms of purchasing power, this change amounts to an increase of 370% reflecting a narrowed gap in the standard of living between Israel and the developed countries. 

Dollar Exchange Rate: As with other national economies, an inflationary process leads to increase in the cost of domestically produced goods and services, a relative decrease in the prices of imported products and services, and a devaluation of the domestic currency.  Israel’s high level of inflation has resulted in the devaluation of its currency in the past, although inflation has been in control in recent years.

External Debt: Due to the financial crisis of 1980’s, Israel’s net external debt rose to 75% of GDP in 1985.  This indicator showed a decrease until 1993 when it rose again due to loans taken by a large wave of immigrants.  Finally, these loans showed an increase in production and restored the country’s external debt-to-GDP ratio to about 25%. 

Unemployment: Higher employment enables a national economy to increase production efficiency to maximum by using its existing resources.  Until 1985, unemployment levels in the Israeli economy were below 5% when they started rising due to an influx of immigrants.  After peaking to 11.5% in 1992, these levels had been falling again and in 1997 were lower than most industrialized nations. 

Productivity within various Economic Sectors: Over the decade 1986-1996, Israel’s agricultural productivity grew at an annual growth rate of 8%.  In the post-90s era, the productivity of industrial sector has been growing at a moderate average annual growth rate of 1.5% as a result of slowdown because of structural changes in the industry.  In the commercial and services sector, the average annual growth rate has been about 2% with greatest growth in the financial and business services as production has shifted from traditional sectors to more sophisticated, knowledge-based sectors. 

Breakdown of Exports According to Industries: The exports have reflected production in various economic sectors.  Coming from an agriculture-intensive background, in 1950, out of $50 million in exports, agricultural products accounted for 70% of exported goods.  The transition from a developing economy to a developed nation has been characterized by a shift in production and exports to the knowledge-intensive economic sectors such as electronic products, computer software, and pharmaceuticals.  In 1994, agricultural products accounted for only half-a-billion dollars of $25 billion in exported goods and services.  In 1997, hi-tech exports constituted 33% of Israel’s total exports.  

Inflation: 1980s were characterized by very high inflation rates in Israel that reached a magnitude of 450% in 1984 and caused economic imbalance.  Concerted efforts to reduce inflation thereafter have resulted in dramatic decreases bringing the inflation rate to about 20% in 1986, to 10% in 1996 and to 7% in 1997.

The study asserts that Israel’s economic history and economic picture of mid-1990s does not provide an accurate assessment of the country’s true growth potential.  Hence, there is need for considering the country’s core competencies and key success factors in the form of intellectual capital that provides it with long-term advantage in terms of future growth and performance.  Such core competencies are delineated in the form of market capital, process capital, human capital, and renewal and development capital.

Market Capital: Market capital reflects the intellectual capital embedded in Israel’s relations with other countries.  The intellectual assets in this area derive from a country’s capabilities and successes in providing attractive and competitive solutions to the needs of the international clients.  Israel’s investments and achievements in foreign relations along with its export of quality product and services significantly contribute to the intangible assets that comprise its market capital.  Indicators of market capital include outgoing tourism, openness to foreign cultures, and, international events and language skills.  Such core capabilities create a basis for assessing the country’s attractiveness from the perspective of international clients. 

Providing Solutions to Market Needs: Given a dynamic business environment characterized by changing customer needs, a country’s capability in meeting such needs represents a competitive edge in the global marketplace.  Israel is ranked amongst the top countries that are considered as having the fastest time for introduction of new products and services and their penetration in the market.

International Events: The country’s level of participation in international events is an indicator of its strong desire for renewal as well its openness and willingness to gain knowledge.  Given its high rate of participation, Israel is seen as having tremendous motivation to expose itself to new intellectual fronts.  In addition, the high rate of hosting international conferences in Israel is an indicator of Israel’s attractiveness to business people from around the world.  This indicator reflects the extent of Israel’s international openness and the increasing interest of international entities in Israel. 

Openness to Different Cultures: People’s desire to meet others, learn, see, broaden their horizons, and to develop and renew themselves may be considered another indicator of its market capital.  Such openness of the Israel’s citizens toward different cultures constitutes an important channel of communications in learning about trends and needs in the global village. 

Language Skills: Knowledge of foreign languages alleviates problems of communications both in local culture and the global market.  There is a realization in Israeli society that the willingness to learn languages contributes greatly to a country’s relations with other countries.  Accordingly, Israeli schools are rated highly in professional teaching of foreign languages.

Process Capital: This component represents the country’s intellectual assets that support its present activities including sharing, exchange, flow, growth and transformation of knowledge from human capital to structural capital.  Such assets include information systems, laboratories, technology, management attention and procedures.  A nation’s long -term growth can be achieved if human capital is integrated within existing structural systems.  Such integration through information and communication systems enhances the nation’s capability to anticipate and translate market needs into product and service applications.  Information technology serves as a key tool for the production of high-quality products and services and the opening of access channels to new markets.  Indicators of process capital include communications and computerization, education, agriculture, management, employment, development of service sector and absorption of immigrants.

Communications and Computerization: Strong communications infrastructure for domestic and international communications between the nation’s citizens and rest of the world facilitate rapid exchange of information and its translation into knowledge inherent in innovative processes, products and services.  Some parameters that may be used for assessment of this indicator include communications and computerization infrastructure, extent of Internet use, circulation of daily newspapers, and, extent of software use.

Communications and Computerization Infrastructure: An index of computer infrastructure that measured variables such as the number of PC’s per capita, and the number of PC’s in homes and schools, ranked Israel high among developed and developing countries.  Similarly, an index of communications infrastructure that rates the level to which the communication infrastructure meets business organizations needs ranks Israel ahead of developed countries such as Germany, Japan, Belgium and Italy.

Extent of Internet Use: Internet use makes it possible to rapidly share information and to communicate and collaborate even when isolated by geography and time zones.  The report asserts that the extent of Internet use is also an important indicator for the assessment of a country’s effective management of knowledge.  An index that measured extent of Internet use relative to population size ranks Israel high within the list of developed nations.

Circulation of Daily Newspapers: Per capita newspaper distribution is assumed to be another indicator of the level of knowledge sharing and involvement in the happenings around the world.  According to a World Bank report, Israel ranks high on the list of nations with highest per capita newspaper distribution.

Extent of Software Use: The extent of software use reflects the level of knowledge sharing and the effort to turn human capital into structural capital.  The extent of software use also serves as an indicator of the quality of the country’s current infrastructure that supports effective management of information and knowledge.  An index based upon the relationship between the extent of expenditure for hardware and the extent of expenditure for software places Israel among the top ranks of developed nations.

Education: Education enhances knowledge sharing, and building and assimilation of mechanisms for the flow of knowledge in the society.  Three indicators used for assessing Israel’s investments in education included: student-teacher ratio (lower is better), PC-student ratio (higher is better) and freedom of expression in the school system.  Based on available data and national surveys, Israel ranks high in all these criteria for assessment.

Agriculture: In making transition from a developing country to a developed nation, Israel – like other developed nations – has shown greater focus on knowledge and service-based industry with diminishing emphasis on agriculture.  However, technological innovation in the agricultural sector has resulted in higher efficiencies resulting in higher agricultural worker’s added value.

Management: The quality of management in a nation’s economy is an important determinant of future health of its enterprises and long-term comparative advantage.  Three criteria that were used in the study for assessing Israel’s intellectual capital included: top management’s international experience; entrepreneurship and risk-taking; and, venture capital funding. 

Top Management International Experience: International experience of management provides the country’s enterprises better ability for penetrating global markets and exploiting opportunities. 

Entrepreneurship and Risk Taking: Government’s support in entrepreneurship and risk- taking through financial support is necessary for technological innovation.  Israel has championed such a program to support technological incubators for raising financing at early stage when the technological idea is considered high-risk for private sector funding.  High success rate of the magnitude of 56% of companies that graduate from the incubator stage for Israel compares favorably with other countries such as USA, with success rate of 10%.

Venture Capital Funding: Venture capital fund is an important basis for supporting entrepreneurship and in ensuring the success of start-ups.  Israel has been successful in cultivating a number of hi-tech enterprises because of its infrastructure and venture capital funds, which invest in start-up companies.

Employment: Israel owes its economic growth to its service industry that has enjoyed a high growth rate compared to other economic sectors.  The financial and business sector, characterized by a relatively small number of employees and the application of advanced information and communication technologies, has been leading in production output among the various service sectors.  Israel ranked high in the average annual growth rate of the service sector over the past decade or so, suggesting greater share of experience and knowledge base in the nation’s economy.  Also, Israel ranks high in computer skills among the developed nations, thus providing an indicator of superiority of the use of its information technologies. 

Development of the Service Sector: The trend of increasing percentage of commercial services based on the development of advanced and knowledge-based sectors is common among the developed nations.  The high rate of growth of Israel’s service sector characterized by the GDP contributed by this sector, investments in R&D, high yield of invested capital, and productivity, wages and percentage of exports in this sector, all point to growth in knowledge-based fields. 

Immigration and Absorption: Successful integration of highly skilled and professional immigrants is a key factor in the country’s ability to benefit from the immigration and its human capital.  Sustained migration of high quality scientists and professionals into the economy of Israel and their successful absorption has resulted in consistent increase in the GDP. 

Human Capital: Human capital, as noted earlier, lies at the crux of intellectual capital.  It constitutes the nation’s peoples’ capabilities reflected in education, experience, knowledge, intuition and expertise.  Human capital embodies the key success factors that provide competitive edge in the past, present, and the future.  The human capital is the most important component in value creation.  However, due to the “soft” nature of these assets, it is often difficult to devise measures for many of them.  As noted by Pasher (1999): “The analysis is especially complex when dealing with wisdom, intellect, experience and knowledge.  The attempt to assess wisdom or motivation ultimately differs from the quantitative evaluation of “hard” assets, such as the extent of personal computer use or the proportion of employees in R&D.”  Despite the acknowledged difficulty of measurement of such assets, the study considers the following factors as key indicators of human capital.

Education: This component is assessed in terms of percentage [and its growth] of students having, or working towards advanced degrees (including certification studies); and, the number of graduates and holders of doctorate degrees in fields considered fundamental for long-term growth – including computer sciences, life sciences and engineering.

Equal Opportunities: The study asserts that a country that grants equal opportunity for citizens to wisely utilizing their inherent human resource, generates greater human capital.  The indicators that were used to measure this component included: female students at institutions of higher education and women in the professional work force, two criteria in which Israel ranks strong among the developed nations.

Culture: This factor was based on two indicators: number of published books per 100,000 inhabitants, and annual number of museum visits per capita.

Health: Maintenance of good living conditions while guaranteeing the population a decent level of health was considered important for maintaining the attractiveness of the nation for its citizens.

Crime: A low rate of crime was considered as a positive correlate of human capital given lesser resources directed to fighting crime and more positive contributions to the society.

Renewal and Development Capital: Renewal and development capital reflects the country’s desire and ability to improve and renew itself in order to progress.  Early identification of changes in the dynamic business environment and their translation into business opportunities contributes to the nation’s future growth and performance.  The six indicators used for this component of intellectual capital in the study included the following.

National Expenditure on Civilian R&D: Investments in civilian R&D are expected to facilitate incubation of innovative ideas and their translation into value-adding products and services that contribute to future economic growth.

Scientific Publications in the World: The extent of the scientific activity – represented in terms of scientific publications, and the quality of that activity – in terms of citations by other scientists, are considered another indicator of the renewal and development capital.

Registration of Patents: In terms of per capita patent registrations, Israel ranks high among developed nations.

Work Force Employed in R&D: Human capital in technological fields is considered as Israel’s most important success factor.

Start-up Companies: The study reports that Israel has the third largest concentration of start-up companies in the world, led only by Silicon Valley and the Boston area.

Biotechnology Companies: Considered as one of the industries that represent progressiveness of a country’s scientific and technological progress, biotech sector represents another indicator for renewal and development capital.  This is an area of emerging growth for Israel.
Synopsis of Israel’s Intellectual Capital Assessment: 

The reported study and its assessment of national intellectual capital of Israel represented an initial attempt at presenting a holistic and organized picture of the knowledge and intellectual assets of a country.  The distinction between financial capital and intellectual capital was underscored to suggest that while former is a reflection of the country’s past progress and achievements, the latter provides a more accurate depiction of future growth and performance.  The expectation from the study was that the report will be used by government and other policy-makers to upgrade tools for exploiting knowledge to accelerate the process of long-term economic and social growth.  In addition, the focus on intellectual capital, and its key components and indicators, brings into perspective key areas in which the country has growth potential.  As noted by the investigators, the national intellectual capital balance sheet needs to be updated every year with reassessment of the key success factors and related indicators. 

Discussion and Issues for Future Research

The reported study used specific indicators of the various components of intellectual capital that represent critical success factors pertinent to long-term future success and growth.  However, such indicators may vary across different nation states depending upon their specific national economic strengths in the global market.  Also, the case study discussed one popular method for assessment of national intellectual capital and illustrated its application.  This doesn’t imply that there is only one method that may be used for such assessment.  There are diverse methods that have been applied for the assessment of intellectual capital at the level of business enterprise, and they may be extrapolated to similar assessments at the level of nations and countries (see for instance, Society of Management Accountants of Canada, 1999, for a review of some of these methods).  For national policymakers who plan to do intellectual capital assessment for their national economies, another document of interest would be the Netherlands Government’s Ministry of Economic Affairs pilot project “Balancing accounts with knowledge” that provides comparison between methodologies used by four different accounting firms (Government of Netherlands Ministry of Economic Affairs, 1999). 

While the presented framework of intellectual capital and the illustrative case study have merit in communicating these issues to information professionals, however, they also raise important issues for advancing the research and practice in information systems.  From the perspective of information professionals and researchers interested in strategic, organizational and behavioral issues, such issues provide venues for advancing understanding of knowledge assets and intellectual capital.  The following discussion provides a brief synopsis for such issues for future research. 
Information, Knowledge and Performance

Several practitioners and researchers have acknowledged that tacit knowledge is a key component of intellectual capital.  However, the superficial distinctions between data, information and knowledge are often criticized, as one person’s data could be another person’s knowledge.  Or, to put in one such critics’ terms (Stewart, 1997): “knowledge exists in the eye of the beholder.”  Does this imply that information professionals and researchers can do nothing about management of knowledge assets or intangible assets?  Not necessarily so!! 

As noted earlier, knowledge assets, like money or equipment exist and are worth cultivating only in the context of strategy.  Or, keeping in perspective the [future] outcomes driven focus of intellectual capital, rather than focusing upon information or information technology, one needs to focus upon ‘what gets done’ with that information.  This shift in perspective would certainly bring the focus closer to performance that is the key motivation for investments in information and technology.  Although one person’s data may be another person’s knowledge, however that distinction may spell the difference between effective use, misuse, abuse or non-use of information.  Hence, it is important to understand why often the same information results in different actions [or inactions] when processed by different individuals.  Seminal work in this area done by Malhotra and Kirsch (1996), Malhotra and Galletta (1999) and Malhotra (1999) could serve as a basis for developing further understanding for relating information and knowledge to performance. 
Taking a Hard Look at the “Soft Issues”

Human capital lies at the crux of intellectual capital.  It is embedded in capabilities, expertise and wisdom of the people and represents the necessary lever that enables value creation from all other components.  Several practitioners and researchers have acknowledged that human capital, often characterized by “soft” issues such as individual motivation and commitment, is difficult to measure.  The same assumption has often resulted in use of inappropriate surrogates for such “soft issues” . Given the relevance of such soft issues, it is the author’s recommendation that researchers and practitioners need to develop more rigorous measures of such constructs.  Seminal work done by Malhotra (1998) that has tried to develop “hard” measures for such “soft” issues in the context of effective use of information systems could provide a base for developing better understanding of human capital.  Based on this work, one may argue that many published accounts have incorrectly assumed that ‘organizational capital’ is what remains after the employees “go home.”  Based on existing research on motivation, compliance and commitment, one may argue that many employees may be on the job, but they may still be “at home,” while others may telecommute from home, and yet may contribute more to the human capital.  In essence, given the increasing importance of knowledge work, the post-industrial concepts of organization and work need to be reconsidered in the same hard terms of ‘outcomes’ and ‘performance.’ 
Intellectual Capital Entangled with Networked Systems

Several popular accounts of the intellectual capital framework, including the one discussed in this article, have taken a simplistic view of the role of information systems.  For instance, many such accounts have assumed that information systems, hardware, software and databases form a part of the structural capital or process capital.  However, it is the author’s argument that given the new networked economy, the advent of ‘free agents’ and ‘knowledge intrapreneurs’ (Malhotra, 2000d), individual education, knowledge and experience is more related to personal pursuits related to quality of life.  In essence, as the new workers empower themselves by appropriating the networked technologies, they assume self-control and self-leadership for their own development regardless of their affiliation with a ‘closed’ concept of an organization or a nation.  In other words, they become denizens of the global electronic village. 

Similarly, with increasing automation, production processes become increasingly efficient, however, the ability to produce as such does not generate sufficient market differentiation.  The focus shifts more towards excellence in marketing, product development, quality assurance and customer management as evident from the more recent popularity of e-business issues such as customer relationship management, supply chain management, selling chain management (Kalakota and Robinson, 1999).  The role of knowledge management and information systems in developing new market niches, creating and distributing innovative products, and ensuring “stickiness” of ‘portals’ by cultivating the loyalty of customers has also been recognized (cf: Malhotra 2000c).  Hence, information and communication systems also become a key part of the market capital as well as the renewal and development capital with increasing ‘virtualization’ of the products, processes and the delivery agents (Turban et al. 1999). 
Post-Industrialization of Intellectual Capital Measures

As suggested by existing research in information systems, investments in information technologies may not necessarily correlate with increases in performance (Brown, 1996; Strassmann, 1997).  Hence, in all such contexts, the emphasis should not only be on investments in relevant technologies, but effective utilization of such technologies.  Large number of desktops or PCs may not necessarily correlate with higher performance in terms of outcomes.  In other words, the concept of ‘intellectual capital’ is based on the notion of ‘intangible assets,’ however many of the indicators seem to be grounded in the world of ‘tangible assets.’  For instance, use of an indicator such as per capita distribution of newspapers needs to be reassessed given that such information is not a ‘scarce good’ but an ‘abundant product.’  Those not subscribing to any print based publications may be using more updated and multifarious push- and pull- based channels – many of which are free — for remaining on top of what is important and relevant to them. 

Similarly, the number of scientific publications and citations as an indicator needs to be assessed in terms of its relevance as an indicator in terms of ‘real outcomes’ in the form of economic growth or performance.  As has been demonstrated by many authors (Kealey, 1996; Sobel, 1996) there is convincing evidence that the new knowledge (and its economic value) generated in the cause of technological or application-oriented research, far outweighs that of basic research.  The latter is the subject of publications, while the former is not.  As peer recognition is traditionally based on the number of publications and citations, the wrong conclusion is inevitably drawn that basic research adds more to the body of knowledge than technological or application-oriented research.
Conclusions

Transition of most developing and developed nations to knowledge economies has resulted in an increasing awareness of ‘knowledge’ as a key lever for economic growth and performance.  Despite increasing importance of knowledge as a factor of production, most accounting systems are still based on the traditional factors of production.  While accountants have been trying to determine how to capitalize the knowledge assets captive in the minds of the human employees, information system designers have been attempting to capture those assets into technology based databases and programmed logic. 

The article discussed the framework for developing an understanding of intellectual capital and knowledge assets, and provided an illustrative case study of a nation state that has applied this assessment method.  The framework of intellectual capital – popularized by a Swedish company Skandia – was described and then illustrated through its application for national intellectual capital assessment for Israel.  In an attempt to bridge the gap between the accountants and the information resource management practitioners and researcher, some caveats were observed.  These caveats were explained in the discussion as points deserving attention in future research and practice.  One important issue that was not discussed in the article is that of fundamental and radical change that requires ongoing reassessment of all given models, frameworks, premises and assumptions.  This issue is discussed in detailed elsewhere (Malhotra, 2000c).  Such dynamic radical and discontinuous change seems to have significant implication about the stability of the models and frameworks that are based on a static view of the business environment.

References

Brown, J.S. “The Human Factor”, Information Strategy, December 1996-January 1997.

Edvinsson, L. and Malone, M.S. Intellectual Capital, Harper Collins, New York, NY, 1997, 5.

Government of Netherlands Ministry of Economic Affairs Directorate-General for Economic Structure Technology Policy Department. Balancing Accounts with Knowledge, VOS number 25B 19a, The Hague, Netherlands, October 1999. [Available in pdf format from http://info.minez.nl/ ]

Hope, J. and Hope, T. Competing in the Third Wave, Harvard Business School Press, Boston, MA, 1997, 12.

Kalakota, R. & Robinson, M. e-Business: Roadmap for Success, Addison Wesley, Reading, MA, 1999.

Kealey, T. The Economic Laws of Scientific Research, St. Martin’s Press, Inc., 1996. Malhotra, Y. From Information Management to Knowledge Management: Beyond the ‘Hi-Tech Hidebound’ Systems, in K. Srikantaiah and M.E.D. Koenig (Eds.), Knowledge Management for the Information Professional, Information Today, Inc., Medford, NJ, 2000a, 37-61.

Malhotra, Y. Knowledge Management and New Organization Forms: A Framework for Business Model Innovation, Information Resources Management Journal, Jan-Mar, 2000b, 13(1), 5-14.

Malhotra, Y. (forthcoming). Knowledge Management for E-Business Performance: Advancing Information Strategy to ‘Internet Time’. Information Strategy: The Executive’s Journal, 2000c.

Malhotra, Y. (forthcoming). Information Ecology and Knowledge Management: Toward Knowledge Ecology for Hyperturbulent Organizational Environments. In Kiel, Douglas L. (Ed.), UNESCO Encyclopedia of Life Support Systems (EOLSS) theme Knowledge management, Organizational Intelligence and Learning, and Complexity, 2000d.

Malhotra, Y. Bringing the Adopter Back Into the Adoption Process: A Personal Construction Framework of Information Technology Adoption, Journal of High Technology Management Research, 10(1), Spring 1999.

Malhotra, Y. Role of Social Influence, Self Determination and Quality of Use in Information Technology Acceptance and Utilization: A Theoretical Framework and Empirical Field Study, Ph.D. thesis, July 1998, Katz Graduate School of Business, University of Pittsburgh, 225 pages.

Malhotra, Y. & Galletta, D.F. “Extending the Technology Acceptance Model to Account for Social Influence: Theoretical Bases and Empirical Validation,” in the Proceedings of the Hawaii International Conference on System Sciences (HICSS 32) (Adoption and Diffusion of Collaborative Systems and Technology Minitrack), Maui, HI, January 5-8, 1999.

Malhotra, Y. & Kirsch, L. Personal Construct Analysis of Self-Control in IS Adoption: Empirical Evidence from Comparative Case Studies of IS Users & IS Champions, in the Proceedings of the First INFORMS Conference on Information Systems and Technology (Organizational Adoption & Learning Track), Washington D.C., May 5-8, 1996, pp. 105-114.

Pasher, E. The Intellectual Capital of the State of Israel: A Look to the Future – The Hidden Values of the Desert, Herzlia Pituach, Israel, 1999.

Stewart, T. Trying to Grasp the Intangible, Fortune, October 2, 1995.  Strassmann, P.A. The Squandered Computer: Evaluating the Business Alignment of Information Technologies, 1997, Information Economics Press, New Canaan, CT.

The Society of Management Accountants of Canada. Measuring Knowledge Assets (Management Accounting Guideline Focus Group Handout), Ed. M. Tanaszi and J. Duffy, Toronto, Ontario, Friday, April 16, 1999.

Sobel, D. Longitude, Fourth Estate Limited, London, 1996. Stewart, T. Intellectual Capital: The New Wealth of Organizations, Doubleday, New York, NY, 1997.

Turban, E., Lee, J., King, D., and Chung, H.M. Electronic Commerce: A Managerial Perspective, Prentice Hall, New York, NY, 1999.

Improving Intelligence Analysis

October 6, 2006

Center for the Study of Intelligence

Central Intelligence Agency

1999

How can intelligence analysis be improved? That is the challenge. A variety of traditional approaches are used in pursuing this goal: collecting more and better information for analysts to work with, changing the management of the analytical process, increasing the number of analysts, providing language and area studies to improve analysts’ substantive expertise, revising employee selection and retention criteria, improving report-writing skills, fine-tuning the relationship between intelligence analysts and intelligence consumers, and modifying the types of analytical products.

Any of these measures may play an important role, but analysis is, above all, a mental process. Traditionally, analysts at all levels devote little attention to improving how they think. To penetrate the heart and soul of the problem of improving analysis, it is necessary to better understand, influence, and guide the mental processes of analysts themselves.

Checklist for Analysts

This checklist for analysts summarizes guidelines for maneuvering through the minefields encountered while proceeding through the analytical process. Following the guidelines will help analysts protect themselves from avoidable error and improve their chances of making the right calls. The discussion is organized around six key steps in the analytical process: defining the problem, generating hypotheses, collecting information, evaluating hypotheses, selecting the most likely hypothesis, and the ongoing monitoring of new information.

Defining the Problem
Start out by making certain you are asking–or being asked–the right questions. Do not hesitate to go back up the chain of command with a suggestion for doing something a little different from what was asked for. The policymaker who originated the requirement may not have thought through his or her needs, or the requirement may be somewhat garbled as it passes down through several echelons of management. You may have a better understanding than the policymaker of what he or she needs, or should have, or what is possible to do. At the outset, also be sure your supervisor is aware of any tradeoff between quality of analysis and what you can accomplish within a specified time deadline.
Generating Hypotheses
Identify all the plausible hypotheses that need to be considered. Make a list of as many ideas as possible by consulting colleagues and outside experts. Do this in a brainstorming mode, suspending judgment for as long as possible until all the ideas are out on the table.
Then whittle the list down to a workable number of hypotheses for more detailed analysis. Frequently, one of these will be a deception hypothesis–that another country or group is engaging in denial and deception to influence US perceptions or actions.

At this stage, do not screen out reasonable hypotheses only because there is no evidence to support them. This applies in particular to the deception hypothesis. If another country is concealing its intent through denial and deception, you should probably not expect to see evidence of it without completing a very careful analysis of this possibility. The deception hypothesis and other plausible hypotheses for which there may be no immediate evidence should be carried forward to the next stage of analysis until they can be carefully considered and, if appropriate, rejected with good cause.

Collecting Information
Relying only on information that is automatically delivered to you will probably not solve all your analytical problems. To do the job right, it will probably be necessary to look elsewhere and dig for more information. Contact with the collectors, other Directorate of Operations personnel, or first-cut analysts often yields additional information. Also check academic specialists, foreign newspapers, and specialized journals.
Collect information to evaluate all the reasonable hypotheses, not just the one that seems most likely. Exploring alternative hypotheses that have not been seriously considered before often leads an analyst into unexpected and unfamiliar territory. For example, evaluating the possibility of deception requires evaluating another country’s or group’s motives, opportunities, and means for denial and deception. This, in turn, may require understanding the strengths and weaknesses of US human and technical collection capabilities.

It is important to suspend judgment while information is being assembled on each of the hypotheses. It is easy to form impressions about a hypothesis on the basis of very little information, but hard to change an impression once it has taken root. If you find yourself thinking you already know the answer, ask yourself what would cause you to change your mind; then look for that information.

Try to develop alternative hypotheses in order to determine if some alternative–when given a fair chance–might not be as compelling as your own preconceived view. Systematic development of an alternative hypothesis usually increases the perceived likelihood of that hypothesis. “A willingness to play with material from different angles and in the context of unpopular as well as popular hypotheses is an essential ingredient of a good detective, whether the end is the solution of a crime or an intelligence estimate.”154

Evaluating Hypotheses
Do not be misled by the fact that so much evidence supports your preconceived idea of which is the most likely hypothesis. That same evidence may be consistent with several different hypotheses. Focus on developing arguments against each hypothesis rather than trying to confirm hypotheses. In other words, pay particular attention to evidence or assumptions that suggest one or more hypotheses are less likely than the others.
Recognize that your conclusions may be driven by assumptions that determine how you interpret the evidence rather than by the evidence itself. Especially critical are assumptions about what is in another country’s national interest and how things are usually done in that country. Assumptions are fine as long as they are made explicit in your analysis and you analyze the sensitivity of your conclusions to those assumptions. Ask yourself, would different assumptions lead to a different interpretation of the evidence and different conclusions?

Consider using the matrix format discussed in Chapter 8, “Analysis of Competing Hypotheses,” to keep track of the evidence and how it relates to the various hypotheses.

Guard against the various cognitive biases. Especially dangerous are those biases that occur when you lack sufficient understanding of how a situation appears from another country’s point of view. Do not fill gaps in your knowledge by assuming that the other side is likely to act in a certain way because that is how the US Government would act, or other Americans would act, under similar circumstances.

Recognize that the US perception of another country’s national interest and decisionmaking processes often differs from how that country perceives its own interests and how decisions are actually made in that country. In 1989-90, for example, many analysts of Middle Eastern affairs clearly assumed that Iraq would demobilize part of its armed forces after the lengthy Iran-Iraq war so as to help rehabilitate the Iraqi economy. They also believed Baghdad would see that attacking a neighboring Arab country would not be in Iraq’s best interest. We now know they were wrong.

When making a judgment about what another country is likely to do, invest whatever time and effort are needed to consult with whichever experts have the best understanding of what that country’s government is actually thinking and how the decision is likely to be made.

Do not assume that every foreign government action is based on a rational decision in pursuit of identified goals. Recognize that government actions are sometimes best explained as a product of bargaining among semi-independent bureaucratic entities, following standard operating procedures under inappropriate circumstances, unintended consequences, failure to follow orders, confusion, accident, or coincidence.

Selecting the Most Likely Hypothesis
Proceed by trying to reject hypotheses rather than confirm them. The most likely hypothesis is usually the one with the least evidence against it, not the one with the most evidence for it.
In presenting your conclusions, note all the reasonable hypotheses that were considered. Cite the arguments and evidence supporting your judgment, but also justify briefly why other alternatives were rejected or considered less likely. To avoid ambiguity, insert an odds ratio or probability range in parentheses after expressions of uncertainty in key judgments.

Ongoing Monitoring
In a rapidly changing, probabilistic world, analytical conclusions are always tentative. The situation may change, or it may remain unchanged while you receive new information that alters your understanding of it. Specify things to look for that, if observed, would suggest a significant change in the probabilities.
Pay particular attention to any feeling of surprise when new information does not fit your prior understanding. Consider whether this surprising information is consistent with an alternative hypothesis. A surprise or two, however small, may be the first clue that your understanding of what is happening requires some adjustment, is at best incomplete, or may be quite wrong.

Management of Analysis
The cognitive problems described in this book have implications for the management as well as the conduct of intelligence analysis. This concluding section looks at what managers of intelligence analysis can do to help create an organizational environment in which analytical excellence flourishes. These measures fall into four general categories: research, training, exposure to alternative mind-sets, and guiding analytical products.

Support for Research
Management should support research to gain a better understanding of the cognitive processes involved in making intelligence judgments. There is a need for better understanding of the thinking skills involved in intelligence analysis, how to test job applicants for these skills, and how to train analysts to improve these skills. Analysts also need a fuller understanding of how cognitive limitations affect intelligence analysis and how to minimize their impact. They need simple tools and techniques to help protect themselves from avoidable error. There is so much research to be done that it is difficult to know where to start.
Scholars selected for tours of duty in the Intelligence Community should include cognitive psychologists or other scholars of various backgrounds who are interested in studying the thinking processes of intelligence analysts. There should also be post-doctoral fellowships for promising scholars who could be encouraged to make a career of research in this field. Over time, this would contribute to building a better base of knowledge about how analysts do and/or should make analytical judgments and what tools or techniques can help them.

Management should also support research on the mind-sets and implicit mental models of intelligence analysts. Because these mind-sets or models serve as a “screen” or “lens” through which analysts perceive foreign developments, research to determine the nature of this “lens” may contribute as much to accurate judgments as does research focused more directly on the foreign areas themselves.155

Training
Most training of intelligence analysts is focused on organizational procedures, writing style, and methodological techniques. Analysts who write clearly are assumed to be thinking clearly. Yet it is quite possible to follow a faulty analytical process and write a clear and persuasive argument in support of an erroneous judgment.
More training time should be devoted to the thinking and reasoning processes involved in making intelligence judgments, and to the tools of the trade that are available to alleviate or compensate for the known cognitive problems encountered in analysis. This book is intended to support such training.

Training will be more effective if supplemented with ongoing advice and assistance. An experienced coach who can monitor and guide ongoing performance is a valuable supplement to classroom instruction in many fields, probably including intelligence analysis. This is supposed to be the job of the branch chief or senior analyst, but these officers are often too busy responding to other pressing demands on their time.

It would be worthwhile to consider how an analytical coaching staff might be formed to mentor new analysts or consult with analysts working particularly difficult issues. One possible model is the SCORE organization that exists in many communities. SCORE stands for Senior Corps of Retired Executives. It is a national organization of retired executives who volunteer their time to counsel young entrepreneurs starting their own businesses. It should be possible to form a small group of retired analysts who possess the skills and values that should be imparted to new analysts, and who would be willing to volunteer (or be hired) to come in several days a week to counsel junior analysts.

New analysts could be required to read a specified set of books or articles relating to analysis, and to attend a half-day meeting once a month to discuss the reading and other experiences related to their development as analysts. A comparable voluntary program could be conducted for experienced analysts. This would help make analysts more conscious of the procedures they use in doing analysis. In addition to their educational value, the required readings and discussion would give analysts a common experience and vocabulary for communicating with each other, and with management, about the problems of doing analysis.

My suggestions for writings that would qualify for a mandatory reading program include: Robert Jervis’ Perception and Misperception in International Politics (Princeton University Press, 1977); Graham Allison’s Essence of Decision: Explaining the Cuban Missile Crisis (Little, Brown, 1971); Ernest May’s “Lessons” of the Past: The Use and Misuse of History in American Foreign Policy (Oxford University Press, 1973); Ephraim Kam’s, Surprise Attack (Harvard University Press, 1988); Richard Betts’ “Analysis, War and Decision: Why Intelligence Failures Are Inevitable,” World Politics, Vol. 31, No. 1 (October 1978); Thomas Kuhn’s The Structure of Scientific Revolutions (University of Chicago Press, 1970); and Robin Hogarth’s Judgement and Choice (John Wiley, 1980). Although these were all written many years ago, they are classics of permanent value. Current analysts will doubtless have other works to recommend. CIA and Intelligence Community postmortem analyses of intelligence failure should also be part of the reading program.

To facilitate institutional memory and learning, thorough postmortem analyses should be conducted on all significant intelligence failures. Analytical (as distinct from collection) successes should also be studied. These analyses should be collated and maintained in a central location, available for review to identify the common characteristics of analytical failure and success. A meta-analysis of the causes and consequences of analytical success and failure should be widely distributed and used in training programs to heighten awareness of analytical problems.

To encourage learning from experience, even in the absence of a high-profile failure, management should require more frequent and systematic retrospective evaluation of analytical performance. One ought not generalize from any single instance of a correct or incorrect judgment, but a series of related judgments that are, or are not, borne out by subsequent events can reveal the accuracy or inaccuracy of the analyst’s mental model. Obtaining systematic feedback on the accuracy of past judgments is frequently difficult or impossible, especially in the political intelligence field. Political judgments are normally couched in imprecise terms and are generally conditional upon other developments. Even in retrospect, there are no objective criteria for evaluating the accuracy of most political intelligence judgments as they are presently written.

In the economic and military fields, however, where estimates are frequently concerned with numerical quantities, systematic feedback on analytical performance is feasible. Retrospective evaluation should be standard procedure in those fields in which estimates are routinely updated at periodic intervals. The goal of learning from retrospective evaluation is achieved, however, only if it is accomplished as part of an objective search for improved understanding, not to identify scapegoats or assess blame. This requirement suggests that retrospective evaluation should be done routinely within the organizational unit that prepared the report, even at the cost of some loss of objectivity.

Exposure to Alternative Mind-Sets
The realities of bureaucratic life produce strong pressures for conformity. Management needs to make conscious efforts to ensure that well-reasoned competing views have the opportunity to surface within the Intelligence Community. Analysts need to enjoy a sense of security, so that partially developed new ideas may be expressed and bounced off others as sounding boards with minimal fear of criticism for deviating from established orthodoxy.
Much of this book has dealt with ways of helping analysts remain more open to alternative views. Management can help by promoting the kinds of activities that confront analysts with alternative perspectives–consultation with outside experts, analytical debates, competitive analysis, devil’s advocates, gaming, and interdisciplinary brainstorming.

Consultation with outside experts is especially important as a means of avoiding what Adm. David Jeremiah called the “everybody-thinks-like-us mindset” when making significant judgments that depend upon knowledge of a foreign culture. Intelligence analysts have often spent less time living in and absorbing the culture of the countries they are working on than outside experts on those countries. If analysts fail to understand the foreign culture, they will not see issues as the foreign government sees them. Instead, they may be inclined to mirror-image–that is, to assume that the other country’s leaders think like we do. The analyst assumes that the other country will do what we would do if we were in their shoes.

Mirror-imaging is a common source of analytical error, and one that reportedly played a role in the Intelligence Community failure to warn of imminent Indian nuclear weapons testing in 1998. After leading a US Government team that analyzed this episode, Adm. Jeremiah recommended more systematic use of outside expertise whenever there is a major transition that may lead to policy changes, such as the Hindu nationalists’ 1998 election victory and ascension to power in India.156

Pre-publication review of analytical reports offers another opportunity to bring alternative perspectives to bear on an issue. Review procedures should explicitly question the mental model employed by the analyst in searching for and examining evidence. What assumptions has the analyst made that are not discussed in the draft itself, but that underlie the principal judgments? What alternative hypotheses have been considered but rejected, and for what reason? What could cause the analyst to change his or her mind?

Ideally, the review process should include analysts from other areas who are not specialists in the subject matter of the report. Analysts within the same branch or division often share a similar mind-set. Past experience with review by analysts from other divisions or offices indicates that critical thinkers whose expertise is in other areas make a significant contribution. They often see things or ask questions that the author has not seen or asked. Because they are not so absorbed in the substance, they are better able to identify the assumptions and assess the argumentation, internal consistency, logic, and relationship of the evidence to the conclusion. The reviewers also profit from the experience by learning standards for good analysis that are independent of the subject matter of the analysis.

Guiding Analytical Products
On key issues, management should reject most single-outcome analysis–that is, the single-minded focus on what the analyst believes is probably happening or most likely will happen. When we cannot afford to get it wrong, or when deception is a serious possibility, management should consider mandating a systematic analytical process such as the one described in Chapter 8, “Analysis of Competing Hypotheses.” Analysts should be required to identify alternatives that were considered, justify why the alternatives are deemed less likely, and clearly express the degree of likelihood that events may not turn out as expected.
Even if the analyst firmly believes the odds are, say, three-to-one against something happening, that leaves a 25-percent chance that it will occur. Making this explicit helps to better define the problem for the policymaker. Does that 25-percent chance merit some form of contingency planning?

If the less likely hypothesis happens to be, for example, that a new Indian Government will actually follow through on its election campaign promise to conduct nuclear weapons testing, as recently occurred, even a 25-percent chance might be sufficient to put technical collection systems on increased alert.

Verbal expressions of uncertainty–such as possible, probable, unlikely, may, and could–have long been recognized as sources of ambiguity and misunderstanding. By themselves, most verbal expressions of uncertainty are empty shells. The reader or listener fills them with meaning through the context in which they are used and what is already in the reader’s or listener’s mind about that subject. An intelligence consumer’s interpretation of imprecise probability judgments will always be biased in favor of consistency with what the reader already believes. That means the intelligence reports will be undervalued and have little impact on the consumer’s judgment. This ambiguity can be especially troubling when dealing with low-probability, high-impact dangers against which policymakers may wish to make contingency plans.

Managers of intelligence analysis need to convey to analysts that it is okay to be uncertain, as long as they clearly inform readers of the degree of uncertainty, sources of uncertainty, and what milestones to watch for that might clarify the situation. Inserting odds ratios or numerical probability ranges in parentheses to clarify key points of an analysis should be standard practice.

The likelihood of future surprises can be reduced if management assigns more resources to monitoring and analyzing seemingly low-probability events that will have a significant impact on US policy if they do occur. Analysts are often reluctant, on their own initiative, to devote time to studying things they do not believe will happen. This usually does not further an analyst’s career, although it can ruin a career when the unexpected does happen. Given the day-to-day pressures of current events, it is necessary for managers and analysts to clearly identify which unlikely but high-impact events need to be analyzed and to allocate the resources to cover them.

One guideline for identifying unlikely events that merit the specific allocation of resources is to ask the following question: Are the chances of this happening, however small, sufficient that if policymakers fully understood the risks, they might want to make contingency plans or take some form of preventive or preemptive action? If the answer is yes, resources should be committed to analyze even what appears to be an unlikely outcome.

Managers of intelligence should support analyses that periodically re-examine key problems from the ground up in order to avoid the pitfalls of the incremental approach. Receipt of information in small increments over time facilitates assimilation of this information to the analyst’s existing views. No one item of information may be sufficient to prompt the analyst to change a previous view. The cumulative message inherent in many pieces of information may be significant but is attenuated when this information is not examined as a whole.

Finally, management should educate consumers concerning the limitations as well as the capabilities of intelligence analysis and should define a set of realistic expectations as a standard against which to judge analytical performance.
The Bottom Line

Analysis can be improved! None of the measures discussed in this book will guarantee that accurate conclusions will be drawn from the incomplete and ambiguous information that intelligence analysts typically work with. Occasional intelligence failures must be expected. Collectively, however, the measures discussed here can certainly improve the odds in the analysts’ favor.

——————————————————————————–

Footnotes

154 Roberta Wohlstetter, Pearl Harbor: Warning and Decision (Stanford: Stanford University Press, 1962), p. 302.

155 Graham Allison’s work on the Cuban missile crisis (Essence of Decision, Little, Brown & Co., 1971) is an example of what I have in mind. Allison identified three alternative assumptions about how governments work–the rational actor model, organizational process model, and bureaucratic politics model. He then showed how an analystΝs implicit assumptions about the most appropriate model for analyzing a foreign government’s behavior cause him or her to focus on different evidence and arrive at different conclusions. Another example is my own analysis of five alternative paths for making counterintelligence judgments in the controversial case of KGB defector Yuriy Nosenko. Richards J. Heuer, Jr., “Nosenko: Five Paths to Judgment,” Studies in Intelligence, Vol. 31, No. 3 (Fall 1987), originally classified Secret but declassified and published in H. Bradford Westerfield, ed., Inside CIA’s Private World: Declassified Articles from the Agency Internal Journal 1955-1992 (New Haven: Yale University Press, 1995).

156 Transcript of Adm. David Jeremiah’s news conference at CIA, 2 June 1998.

Leading change: insights from Jungian interpretations of The Book of Job

October 5, 2006

Charles Smith
Hofstra University, Hempstead, New York, USA,
 
and

Michael Elmes
Worcester Polytechnic Institute, Worcester, Massachusetts, USA

Abstract This paper explores insights from the psychology of C.G. Jung as it relates to leadership
and the management of change in organizations. It draws especially upon Jung’s archetypal
interpretation of the biblical story of Job, and the relevance of this story to the modern day study of
organizational life. It suggests that the transformations of consciousness represented within the story
of Job are highly relevant to the ways that organizations and their leaders face chaotic, turbulent, and/
or unpredictable circumstances. In particular, it describes the role of the feminine and the shadow
within such situations, as forces that allow a new order to unfold during periods of intense change.

This paper was funded in part by a research grant from the Frank Zarb School of Business,
Hofstra University.

Introduction
In the literature on the successful leadership of change, two of the qualities
cited as essential are vision and emotional intelligence (Goleman, 1998).
Here vision refers to a credible picture of a future that is better than the
present and emotional intelligence is a sensitivity to self and others, and an
awareness and understanding of emotions. If leadership of change is about
telling participants a new story and guiding them through it, vision is the
“happy ending.’’ Along with linguistic fluidity and personal charisma
(Gardner, 1995), the leader with emotional intelligence can build interest in
“the story’’ and offer a plotline by which everyone can move towards the
desired goal (Barry and Elmes, 1997).
Unfortunately, the literature on vision and emotional intelligence often reads
like a “how-to’’ checklist. There is, within this literature, a tendency to ignore
the deep and painful experiences that bring a person to genuine vision,
emotional intelligence, and wholeness of character. We suggest in this paper
that before change leaders can be successful, they must first go through a
“crucible of testing’’ (Guinness, 1990), one that radically alters the individual’s
relationship to life. Central to this shift, and explored herein, is an ever-deeper
opening to the feminine and shadow elements of the psyche. Extending far
beyond the “how-tos’’ of leading change, the crucible of experience can yield
true confidence and wisdom to help others face the same difficult periods.
In this paper, we use Carl Jung’s interpretation of the Book of Job from the
Old Testament to understand “the crucible of testing’’ and the deep shifts that
might occur. Specifically, with Jung’s insights and with the aid of further
interpretive works by Edward Edinger and poet-artist William Blake, we will
come to see how Job’s “crucible of testing’’ brought a deeper opening to the
feminine and shadow elements of his being, and what these meant in terms of his own ways as a leader.
The story of Job as guidance for leading change
William Safire (1993) depicts Job as the first great dissident, the individual who
finally got up and complained about the way things were. In this sense, as we
hear about Job, we can look much deeper than the story of an ancient seeker
who went through a period of doubt about his faith. We find within Job the key
attributes necessary for an individual to break from a rigid worldview, to
transform, and to be lead when intense change and crisis prevails. Indeed, Job’s
is a story of the transformative power of crisis and difficulty, of how, as Jung
consistently observed, we have to go through some intensive experience before
we accept the pain of change and approach our deeper identity ± rooted in the
transpersonal “self.’’
Job’s story describes the painful process of letting go of one’s picture of
“reality’’ ± for one that is more comprehensive, more embracing of the
totality of the psyche. It includes a removal of the sense of separation
between inner and outer life. In a sense the isolated self comes to know itself
as the greater, transpersonal “self,’’ connected to all of life. This more
expansive view of the self can embrace the masculine and feminine,
darkness and light, order and disorder, creation and destruction. Such a
reconnection with and among all the dimensions of the self allows an
individual to become aware of and to work with the many difficult and
uncertain aspects of change. Ultimately, realizing the self brings a sense of oneness with change. It is the very “self’’ that is transforming, resisting,
responding, and becoming creative within any context of change.With such
a vision, there is no longer any sense of separation from what is being
experienced. Working with a situation is working with and discovering the
nature of the self.
By way of introduction, we note that Job’s story is not at all about an
otherworldly or abstract spirituality. Appearing as the first book of the
“wisdom writings’’ of the Bible, it is meant to be useful in practical life. The
story speaks of the discovery of meaning in a life full of turbulence, injustice,
betrayal, and overwhelming difficulty, not unlike the writings of Victor Frankl
(1968) and Etty Hillesum (1983), who chronicled the ways that people found
meaning within the horrors of the Holocaust. Such experiences are extreme
cases of what we all go through: the challenges of the outer life demanding a
reorientation of the human being at a most fundamental level. In fact, to Jung,
the story of Job was the story of the predicament of a modern human being,
involving a changing image and definition of the sources of authority, power,
and soul.
After recounting the Story of Job, we will explore the ways that it calls us to
see things differently, and to frame issues of organizational change differently.
We will also examine the elements of Job’s “crucible of testing’’ and look for the
parallels to our own experience and our ability to work with periods of intense
change.

The Story of Job

The following is our narrative of the story of Job, drawn from the
interpretations of Jung (1958a) and Edinger (1986), and based on illustrations
byWilliam Blake.We are especially grateful for Edinger’s penetrating insights
into Blake’s drawings, which give shape to our story and clarity to the issues
involved.
Job is a great leader. He has vast flocks of sheep, good workers, and the
highest standards. Though he is only a farmer and merchant, he has the respect
and power of a king. The leader’s land is well fenced, yielding great harvests
and nourishing his vast flocks. Under Job, people take a place of subservience.
In Blake’s first illustration (Figure 1) of the story, all the members of the family
are looking at Job. The situation is lifeless: musical instruments are hung up
and not in use, and the animals are sitting in obedience.
In Job’s kingdom, there is no time for music and dance: there are things to be
done and remuneration for doing them. People seem appreciative of being in his
domain, and yet there is a lack of energy, of what Jung called “numinosity.’’
Job follows to the letter what he thinks to be God’s rules. He is an extremely
ethical man, has much faith, and gives generously to charity. And he has an
earthly wisdom as well; he “fears God and ties his camel.’’
Suddenly one day, Job’s fortune changes. His flocks are raided, some of his
sons and workers are killed. Others among the young men are sneaking off to
the market, listening to the poets or attending primitive rituals and orgies.
Misfortunes continue to mount, and Job feels greatly troubled. It seems as
though there is a plot against the great man. He thinks that perhaps by giving
more alms things can change. He tries this, and, lo and behold, a great storm
sweeps the land and levels the temple in his town ± the place he reveres and
finds his strength in. The storm brings down his barns, and the traveling
tribes, along with some of his own workers, take advantage of the time to steal
more of his flocks and all of his camels. His children begin to beg, drink, and
stay out late, and some of them are killed in accidents. In all his grief, his friends desert him, and even family members stop talking with each other.
Finally, to top it all off, Job gets very sick.
For Job the illness is the last straw. Up to that time, he has been able to keep
his cool, trying again and again to restore order through every possible means.
He rebuilds his fences, seeks out wise counselors to advise him on his
businesses, and tries to reinstill in his workers and family a sense of vision and
optimism.
As despair set in, Job’s counselors, all well paid and well meaning, continue
to come to him overflowing with advice and words of consolation. They tell
him he is doing everything right, that the problem is just one of cycles ± what
goes up, must come down. Just weather the storm, they say, have faith and
everything will be all right.
But Job does not accept the counsel. He no longer believes that acting the role
of the good person spells a prosperous and happy life. Down, down the great
man goes. The counselors come and continue to tell him that he is still a great
man, a hero to his people. They tell him that if he despairs, perhaps everyone
will.
While he cannot pinpoint the problem, Job knows in his heart of hearts that
these well-meaning counselors have not a clue about the present situation. As
right as they have been about the past, there is something new here,
discontinuous from all that has gone before. The whole playing field has been
leveled, and the old rules might as well be thrown out.
A significant encounter ensues, one that takes Job some time to assimilate.
Besides the older advisors, Elihu, a young and enthusiastic counselor, appears.
The youth admits that he has failed to speak previously because he was
respecting the age and supposed wisdom of the older counselors. But the older
counselors’ lack of understanding finally was too much to take, and Elihu has
to speak up now. We can imagine that the youth, with a fresh perspective,
agrees that things have changed and might go on changing forever. The youth
warns Job to pay attention to his dreams, to literally “fear’’ that he may miss the
whole point of his existence, and to put away any pride.
Still, Job complains bitterly. God answers him in a whirlwind. “Who is this
obscuring my designs by his empty headed words?’’ Then, suddenly, Job is
raised above earthly life. He is given a glimpse of both the light and shadow of
God. God’s response is to reveal to Job the nature of the divine, the fact that it
does not neatly fit our human projections and expectations. Instead of
containing only that which is just, good, and beautiful, it also contains the
frightening, paradoxical, and illogical.
Subsequent images by Blake depict the creation story. Following the violent
whirlwind and Satan being cast out of heaven, it is as if Job and his world are
created anew. Blake depicts Job and his wife being infused with light by God.
Inscribed below this image are Christ’s words: “and in that day ye shall know
that I am in my Father and you in me and I in you.’’ Here we can see a leap in
consciousness that goes far beyond the moralistic and dualistic worldview that
Job has held. Seeing things differently, Job is aware of his “oneness with the Father’’ and the joining of divine and human nature. The reference to Christ
helps make it clear that this joining comes from a willingly sacrificial attitude.
Sacrifice here is not of goods and property: It is of having things on one’s own
terms, rather than having things in accord with the overall harmony of the
Divine. The discovery represented here is that, by giving up one’s will to its
universal counterpart, one’s deeper will, the Christ-nature or Buddha-nature, is
realized. In Job’s case, the universal will demanded a period of chaos, which
brought a kind of clean sweep of his kingdom. Removed was anything
sclerosed, stale, and lifeless. Life’s renewal demanded change, and finally, by
opening to the chaotic conditions and completely letting go of all the order that
he had come to expect, Job came to know more of his true nature.
Seeing through the eyes of Christ, serving in the “work’’ of the Comforter,
Job’s concern becomes the welfare of creation, particularly the human beings in
his life. In Blake’s painting, both Job and his wife are being showered with
light, representing the integration of the feminine the alchemical marriage by
which heaven and earth are joined.
Once again, the enterprises of Job flourish. His wealth increases and
benevolence and goodwill prevail. It seems a new order is being attained, far
different from the old one. Job rocks tradition by distributing his wealth evenly
among sons and daughters, instead of giving all only to his sons. Restored to
wholeness, Job also regains his health.
Evidence of an opening to the feminine can be found in the way that Job
turns his attention towards his daughters for counsel. Perhaps they can see and
understand patterns, or vaster dimensions of, the situations which Job faces. In
any case, their role is pivotal in bringing forth a new perspective and restoring
the vibrancy of the kingdom. In Blake’s illustration (Figure 2) of this final
aspect of the story, there is animation: animals move about, there is music and
dance, and the youth who have previously departed for the cults return.
Job’s story and self-discovery

To understand Job’s story from a Jungian perspective, it is necessary to see it in
terms of his discovery of and coming to terms with the greater or transpersonal
“self.’’ Marie Louise von Franz wrote that individuation or the “conscious
coming to terms with one’s own inner center (psychic nucleus) or self’’ often
occurs after a “wounding of the personality and the suffering that accompanies
it’’ (von Franz, 1977, p. 169). She discussed the wounding in terms of its impact
on an ego that feels “hampered in its will or its desire and usually projects the
obstruction onto something external’’ (von Franz, 1977, p. 169). For many
leaders, this might manifest itself as a penchant for blaming the boss, the
customer, the systems, or the organization for everyday problems and failures
that frustrate or poorly reflect on leaders. From the point of view of his ego, Job
had done everything right ± he had prayed in the right manner, he had followed
the right traditions, and he had lived a righteous life. When the world around
him fell apart and his life became chaotic and confused, he did not look within
himself for an explanation but rather blamed God. If he had been good and righteous all these years, he reasoned, how could the troubles he faced have anything to do with him? Theywere God’s fault.
Of vital relevance in Job’s story to the leadership of change, is the “shadow’’
that part of the unconscious personality that holds unknown or repressed
attributes and qualities of the ego. This awareness emerges in us through
seeming accident, through chaotic moments of conflict, through dreams and
fantasies. Awareness of the shadow is vital because it contains those elements
that make us fully human ± fears, desires, and hatreds that are difficult to own.

It is only by coming to know and fully accept the shadow within the psyche
that a full and rich relationship with the self is possible, unencumbered by the
desires and fears of the ego. Without this deep awareness and acceptance, it is
not possible to understand that what is happening, however intense, is not
meant as a personal attack by God, and is ultimately useful in attaining
wholeness. Without the embrace of the shadow, we too readily dismiss that
which we fear, dislike, or cannot understand. With the broader perspective
provided by the shadow, and the unconditional self-love provided by the
“feminine,’’ our challenges can be seen as helpers that provide useful
information. For example, consider the fear of failure or humiliation that arises
within a leader during a change initiative. The fear is natural, and accepting its
presence without resistance makes one more vulnerable, open, able to listen,
and able to ask for and be receptive to help. On the other hand, resisting the
fear, trying to push it away, makes one less able to listen, less responsive, both
internally and externally. Without the depth of vulnerability, the individual
cannot possibly have as keen an awareness of what a situation demands, what
people need and require to be successful.
Job’s story illustrates that by shining awareness on all those parts of
ourselves that we do not like ± in his terms by understanding the shadow ± we
become more human and responsive. His experience brought out the dark side
of life. Part of Job’s ego had been a very rigid and patriarchal view of the world.
To Job, God had been the father. Job’s view of reality had been hierarchical and
transcendent, with eyes focused upward to the exclusion of the life around him.
This is why Blake pictured Job’s life as barren, without music. Before the
change, everyone in Job’s world had remained in his or her assigned places and
obeyed the rules. A conscientious and beneficent leader, with a moralistic view
of right and wrong, of good and bad , Job had neglected to honor and nurture
the people and life around him. After disaster struck, however, and Job’s ego
was defeated, life was renewed. Blake portrays Job and his kingdom as much
more animated and alive; music, the counsel of his daughters, freedom of
movement, and respect for nature characterized his new realm.
Perhaps even more relevant to leadership and the management of change,
Job’s transformation also calls forth awareness of the feminine, of the “anima.’’
von Franz describes the anima as “the personification of all feminine
psychological tendencies . . . feelings and moods, prophetic hunches,
receptiveness to the irrational, capacity for personal love, feeling for nature and
± last but not least ± (one’s) relation to the unconscious . . . It is the inner
feminine side of a person that allows them to connect to the `ghost land’’’ (von
Franz, 1977, p. 186). The anima is often portrayed as a goddess or priestess who
has links with primal forces of light or darkness. As a negative force, that is,
when the shadow is repressed or denied, the anima can manifest itself as
feelings of worthlessness, moodiness, compulsive erotic fantasies, and
romantic fantasies of love and maternal warmth, later to be betrayed. As a
positive force, that is, when accessible to the individual, the anima can help a
person be receptive to valuable insights and information from the unconscious and thereby become more closely aligned to an inner sovereignty: wisdom and
compassion. The anima is in this respect as Dante’s Beatrice, the guide of the
soul to the higher mysteries of the self and the mediator between earth and
heaven, between the ego and the self.
According to Jung, it is by taking seriously one’s moods, fantasies, and
images ± the substance of the anima ± that one gains full access to the
unconscious and to the self. A Sufi poem points to this guiding wisdom and
well expresses Jung’s reverence for the anima:

This being human is a guest house.
Every morning a new arrival.
A joy, a depression, a meanness,
somemomentary awareness comes
as an unexpected visitor.
Welcome and entertain themall!
Even if they’re a crowd of sorrows,
who violently sweep your house
empty of its furniture,
still, treat each guest honorably.
He may be clearing you out for some new delight (Rumi, 1995, p. 109).

Job began to question his old patterns and assumptions after everything had
fallen apart and after his efforts to blame God had proven fruitless. Only then
did the awareness of the feminine, and the symbolism of the marriage of
feminine and masculine, dawn. Only then did Job begin to take the counsel of
Elihu, which ultimately led Job to deeper realizations. Only through the
intensity did he finally take the counsel of his daughters: by honoring feminine
wisdom, his plight was resolved.
The encounter with the self in organizational life
The story of Job is everyone’s: at home; in everyday interactions with others;
and at work. How do we recognize this encounter? Jung offers a clue:
“God’’ is the name by which I designate all things which cross my willful path violently and
recklessly, all things which upset my subjective views, plans and intentions and change the
course ofmy life for better or worse ( Jung, 1961).
From a Jungian perspective, chaos is the influx of the feminine into individual
and organizational life. The feminine upsets the plans, stories, assumptions,
and dogma that people adopt to maintain a sense of control, comfort, and
rationality in the world. In Dancing in the Flames, Woodman and Dickson (1997) describe the role of the feminine in managing amidst situations of radical
change, turbulence, and even chaos:
Science has very nearly grasped the paradox at the heart to reality ± the paradox that
mythology calls “goddess,’’ creating a momentum that has never existed at any other time in
history . . . Ancient wisdom, in which chaos was recognized and preserved (particularly in
gnosticism and alchemy) as the necessary element of transformation, has finally been
restored . . . . It is within this chaos that a deeper, intrinsic order reveals itself. This is not the
imposed order that we have become so accustomed to in a patriarchal, conceptualizedworld,
an order that is not connected to the creative matrix. Rather, it is an order that emerges rather
than being imposed (Woodman and Dickson, 1997, pp. 38-39).
Allowing order to “emerge’’ from the events of life, rather than attempting to
imposing it on them from a state of mental abstraction (e.g. planning, modeling,
strategizing, and so forth) is the challenge of modern organizational life.
Being vulnerable, aligning to the feminine, and welcoming periods of
apparent chaos all require us to become open to the uncomfortable aspects of
our work. It can be difficult and painful, but immensely fruitful as well. The
growth that results takes time and cannot be imposed through a quality
programor culture change seminar. Given the forces of chaos and the profound
evolution needed in each individual and organization, the changes necessary in
modern work life are neither minor nor superficial. Present day consulting for
“whole-systems’’ transformation that does not emphasize the importance of this
deep, person-by-person change is often only window-dressing, what Zohar
(1997) calls the “transformation lie’’.
It is not intellectual knowledge that leads us to embrace of the shadow and
our receptive side. It is crisis, the same Job-like conditions impinging on our
own lives. An example is offered here by David Marsing, vice president and
general manager of assembly test manufacturing at Intel. After a heart attack,
Marsing was told by doctors that he was perhaps in the wrong profession, that
maybe he should be a forester in a watchtower, or a librarian ± anything but a
leader under lethal pressure:
When I went back to work, I felt like I could see and hear things in a way that I never could
before, picking up signals from all the people who had a difficult time at work. They were
grinding themselves up ± in emotional, physical and spiritual pain. I had never realized the
degree to which all around me were suffering. How, then, could we create an environment for
breakthrough performance at every level ± not just the traditional work indicators, but
interpersonally, and in terms of the individual integration of work and personal life? I
believed that part of the problem was our managerial approach. It was like trying to swim
with a full set of weights. It represented a macho achievement, but it wasn’t efficient ± and if
you weren’t lucky, you would drown trying. Getting the weights off would require some
departures from Intel’s traditional thinking and ways of doing things (Marsing in Senge et al.,
1996, p. 216).
To explore further the implications of Jung’s Answer to Job ( Jung, 1958a) to
organizational change, it is useful to understand the three central themes of the
wisdom tradition from which Jung drew (Smith, 1995, p. 248):
(1) Things are more integrated, more connected, than they appear. Our
situation, Smith says, is akin to seeing a great tapestry from the back.
While we see isolated threads, the beauty and harmony of the whole
carpet is missed, only to be grasped when we see interconnections. Any
human being, rather than being separate and disconnected, is integrally
and intricately woven into life’s tapestry.
(2) Things are often much better than they seem. Human life, rooted in
nature and made in the image of perfection, is infinitely greater than
everyday experience might suggest. Despite appearances and/or
feelings of limitation, each human being is an ever-new, ever-unfolding
ever-beloved child of the universe. In spite of the misunderstandings,
injustices, tragedies, and violence that surround us, there is always
possibility and hope for humanity.
(3) Things are more mysterious than they appear. The wisdom schools
suggest, for example, a profound synchronicity at work in life, which
joins people, events and situations in order to bring out the greatest
potential. This means, Smith urges, that we never get too comfortable
with our understanding of things. Opening to mystery, we witness
surprise and find our understanding stretched to the point of
bewilderment. The wisdom schools suggest that the more we are willing
to live with mystery, to give up our certainty and our commonplace
interpretation of events, the more this mystery becomes apparent.
Although Jung’s work seemingly stands in direct opposition to the postmodern
perspective through its essentialism, epistemological claims, and “Pollyanna’’
optimism, the two paradigms share a deconstruction of the ontological status of
boundaries. That is, Jung views Job’s story as exemplary in its dissolving of the
boundaries between the “inner’’ and “outer’’ world. A thorough discussion of the
two very different paradigms is beyond the scope of this paper; suffice it to say
that a Jungian approach supports a movement toward more freedom and
expansiveness, on an individual, organizational, and societal level, through the
application of deeply suffered personal lessons of humility and compassion. In
terms of meaning, we could postulate that the Jungian perspective corresponds
to the systems view, in which the interconnection of events and situations with
our “inner life’’ calls for a reflection upon and an appreciation of others. The
Marriage of Heaven and Earth:
“God’’ is the primordial experience of [the human], and from the remotest times humanity has
taken inconceivable pains either to portray this baffling experience, to assimilate it by means
of interpretation, speculation or dogma, or else to deny it ( Jung, 1958a, p. 480) .
As the words above attest, Jung was fierce in communicating the need to get
beyond outworn God images in order to ground understanding in personal
experience. An abstract “God in the heavens’’ conception that excludes human
love and compassion for one’s neighbor serves no one. Bringing the self into
everyday interactions and encounters, according to Jung, is essential to
wholeness, at all levels.

Being fully human does not connote living in an abstraction; rather, it means
being open to the light and air and the constant changes within ordinary life. It
is only through this openness to heaven and earth that an alchemical marriage
becomes possible. To Jung, each individual, like Job, has to endure and hold the
paradoxes of awakening consciousness and the moments when there seem to
be no answers. For those willing to go through this state of unknowing and
paradox, a greater wholeness and connection with life becomes possible. In
Edinger’s (1986, p. 9) words:
At first, the encounter with the Self is indeed a defeat for the ego; but with perseverance,Deo
volente, light is born from the darkness. One meets the “Immortal One’’ who wounds and
heals, who casts down and raises up, who makes small and makes large ± in a word, the One
whomakes one whole.
Ultimately, the “workability’’ of life was Job’s lesson. His problem disappeared
when his point of view widened and when his focus shifted from personal
suffering to connecting with and gaining the fullest appreciation of the
circumstances and events around him. In the gaining of this wisdom, and in
this sense of appreciation for “what is,’’ a dramatic shift in vision occurs.
My daily activities are not different,
Only I am naturally in harmonywith them. . .
In every circumstance, no hindrance, no conflict
Drawing water, hewing wood,
This is the supernaturalpower
This the marvelous activity (Zen poem, in Smith, 1995, p. 91).
Jung offered clues to such an approach and vision of life, clues that help us in
leading and managing within a turbulent world. By perceiving the
“workability’’ of the seemingly worst of circumstances, it is possible to listen
and act with wisdom and joy. Going a step further into the dimension of
“mystery,’’ the perspective offered by Jung and by Job suggests that we might
look very carefully at our moment-to-moment experience for the signposts of
meaning and guidance that are offered.

References and further reading

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Barry, D. and Elmes, M. (1997), “Strategy retold: toward a narrative view of strategic discourse’’,
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Brown,A.D. (1997), “Narcissism, identity and legitimacy’’, Academy ofManagement Review,
Vol. 22 No. 3, pp. 643-86.

Edinger, E. (1986), Encounter with the Self: A Jungian Commentary on William Blake’s
Illustrations of the Book of Job, Inner City Books, Toronto.

Frankl, V. (1968), Man’s Search for Meaning: An Introduction to Logotherapy, Washington
Square Press, New York, NY.

Gardner, H. (1995), LeadingMinds:An Anatomy of Leadership, Basic Books, NewYork, NY.

Goleman, D. (1998), “What makes a leader?’’, Harvard Business Review, November-December.

Guinness, O. (1990), Character Counts: Leadership Qualities in Washington,Wilberforce, Lincoln,
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Hillesum, E. (1983), An Interrupted Life: The Diaries of Etty Hillesum, 1941-1943, Pantheon
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Jung, C.G. (1958a), Answer to Job, Bollingen Series, No. 11, translated by Hull, R.F.C. (Ed.),
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