Boiled down to the simplest of terms, intellectual capital is the stuff you know: your acquired skills, knowledge, and expertise. Your intellectual knowledge is how you make money. The degrees you have, the experience you have gained, the training you have completed all feed into the product or service you offer.
That said, the richest, most powerful intellectual capital represents several subsets of knowledge that are carefully packaged together in such a way that they are difficult to duplicate.
Consider, for instance, Uber, the mobile app that provides rides for hire, similar to a taxi service. Uber took knowledge about the taxi industry and combined it with knowledge about technology and mobile apps. Indeed, this combination of knowledge proved powerful: In 2013, USA Today named Uber as its tech company of the year. And in late 2014, Business Insider received a leaked copy of a 60-page internal Uber report that suggested the company could generate $10 billion a year in revenue.
What can families learn from this? Families are filled with different subsets of knowledge. A few cousins might know about technology, another about specific industries like agriculture or architecture. Another might know about hospitality.
Families who are closely connected, who have identified each person’s unique knowledge, and who regularly communicate can combine their intellectual capital in interesting ways.
We know of a young adult who, as a child, spent a ton of time in her mom and dad’s court-reporting agency. As an adult, she worked in the technology industry. One day, while she was visiting her mom at the court-reporting agency, she overheard some of the employees complain about the way court-reporters are scheduled.
An idea was born: She realized that the court-reporting world needed an app that matched court reporters with law firms. This way, law firms could secure court reporters for their depositions without picking up a phone.
This was a lucky coincidence. Families who are intent on leveraging each other’s intellectual capital have endless possibilities to innovate, strengthen, or revamp each other’s income-possibilities. Does one family member have unique knowledge on hiring superstar employees? Does another know about contract law? Does a 24-year-old niece know about technology in a way that can help her great-uncle strengthen his company? Families who are close will recognize these opportunities, and they will have members who want to help their relatives who are in need.
Creating a process for identifying and disseminating each person’s intellectual capital can also help a family deploy knowledge and resources to other family members in need. Has one member rebuilt his life after a bankruptcy? Recovered from cancer? Moved forward after a divorce? Having a process for identifying each person’s specialized knowledge means that family members know who to turn to when they are in need.
We suggest using something like a Real Family Balance Sheet, updating it annually, and disseminating it to members.