It is not possible to put a “measure” on know-how. The term is effectively jargon for the intangibles that reside in the minds of workers with hands-on experience in a specialist field. Industry and commerce are full of similar jargon for the imponderables (by definition, difficult to evaluate with precision).

Patents disclose at least part of your know-how. They are expensive to file and expensive to maintain. They can be difficult to police and can be problematical in a court challenge. With every invention there is the option on non-disclosure with a preference for relying on know-how.

In operation of highly capital intensive industries there is rarely a need to patent an invention of an improvement in operation. The invention is best kept as know-how within the company.

The position with a consumer item is rather different. A new-comer can buy, examine, and copy the latest CPAP device and mask. He can not copy the software for its operation, nor evaluate how and why the software was developed to do the job it does. Management must exercise its “gut feel” for whether this knowledge should be protected by patent, or copyright, or left as undisclosed “know-how”.

Again, technology is changing quite rapidly. The success of new designs relies heavily on the know-how of how the current designs arose. Without that knowledge an intending competitor might “reinvent the wheel”. Know-how can extend to apparently quite small detail. For example, why does CPAP tubing have the dimensions in common use. A new entrant might see benefit in less cumbersome tubing.

Know-how extends beyond the production of a good. The good must be marketed. The more sophisticated and more specialised the market, the more know-how is required to set up a marketing infrastructure.

An example of how an experienced and successful manufacturing company acquired know-how in the specialist area of CPAP manufacture is given in Origins. I am not suggesting that Fisher & Paykel deliberately set out to acquire know-how of the CPAP industry. As contractors for the supply of humidifiers they could not help but obtain know-how that gave them a firm basis on which to build on their own technology to become a competitor.

I believe a classic example in management circles is given by Honda. They had the engineering expertise in motorcycle production to build mechanically superb small cars. They lacked design expertise to make them attractive to the European market. In this case I have read that they deliberately sought contracts to build a small car badged as a Rover, to get access to European design expertise.

In summary, know-how can not be measured. Whether you have it or not determines whether or not you will succeed.