I first heard of Ron Baker through Verne Harnish at the Growth Summit. Verne had recommended Ron’s latest book – “Implementing Value Pricing”. I bought it and read it and in the process had my eyes opened and my perspective on business turned upside down (see my post on “Why do we exist as a business?”).
Since becoming a huge fan, I was excited to have the opportunity to meet Ron in a workshop in Australia and do a quick interview (2:22) with him on how the web is changing the world of knowledge sharing and working.
He talks about why knowledge is a non-rival asset and how social media is allowing organisations to access the smartest people in the world.
Click here to view the video on YouTube.
Hi, My name’s Ron Baker and I’m the founder of the Verasage Institute, which is a think tank dedicated to bettering the professions.
I’d like to talk to you today about the concept of a rival vs a non-rival asset. What’s interesting about a rival asset is that it’s like a bottle of water or a can of coke. If I’m drinking it, you can’t, so only one of us can use it at one time. A non-rival asset is like an idea or a piece of knowledge. If I give it to you, now you have it but I still have it. It didn’t diminish when I transferred it to you. That means that you can take that knowledge and you can tweak it and you can make it better and you can use it to apply and create wealth for your organisation or for your customers.
Of course in a business, we like things that are leverageable and scaleable and a non rival asset is the ultimate. It’s like the difference between baking a cake, which is a rival asset and having the recipe to the cake. The recipe tot he cake is the non-rival asset because I can replicate the cake over and over and over and not diminish it for anybody else. A non rival asset is like having your cake and eating it too.
I think this applies specifically to professional firms because a billable hour is a rival asset. Now how I think this interplays with social media is that since we are a knowledge society, the social media allows us to tap into other people’s minds and their intellectual capital, their non-rival assets and allows us to share and collaborate across multiple platforms be Facebook or LinkedIn or Twitter or Basecamp and that just accelerates the relationship, it accelerates our social capital and it enhances our sphere of influence and our sphere of intellectual capital and that is what I think is so powerful about the concept of a non-rival asset. Being able to tap into the wisdom of the crowd if you will.
There’s an engineer at Sun Microsystems by the name of Bill Joyce who said that the smartest people are not in your organisation and to the extent that you can tap into a world wide network of really bright people and get answers, you’re greatly enhancing your social and intellectual capital and I think that is the power of the non-rival asset.