Mary suggested I post the full page from my website ( where she got a quote that she recently tweeted.. Here's the quote:

"If senior executives managed their organizations' fixed assets and financial capital the way that they manage their companies' knowledge assets and intellectual capital, they would be fired...and likely sent to jail."

...Larry Chait 2010

and here's the rest of the page:

On average, the value of an organization's intangible assets of  (its knowledge and intellectual capital) is up to three times the value of its tangible assets.  Yet in most organizations, overseeing those assets consumes little or no management attention.

Multiple factors argue that access to—and effective use of—knowledge will become increasingly important:

  • Rapid, never-ending pace of change that is seemingly increasing
  • Ongoing shift to knowledge and innovation as bases of competition
  • Burgeoning of available information and access to such information

Next-generation managers who have a deep understanding of how knowledge is created and leveraged in organizations—and practical skills in how to achieve such leverage—will have a clear advantage over their peers.  Managers without these skills—and their companies—will find it difficult to thrive, and potentially, survive.

Your company's intellectual capital  includes the collective wisdom and expertise of your people, as well as your trade secrets, software code, and customer relationship data.

Unfortunately, most companies have inconsistent and ineffective ways to organize, access, share, communicate, and apply these valuable resources.  Rather than leverage knowledge and intellectual capital, they suffer from a "brain drain."

People can be trained in how to capitalize on an organization's growing and changing body of knowledge:

  • Identify and prioritize your most critical knowledge resources
  • Structure those resources into an easily accessible "knowledge taxonomy"
  • Select and implement the appropriate  technologies 
  • Create the processes and shape the behaviors necessary to maximize the use of intellectual capital at every level of the enterprise

So, to stay out of jail, manage your knowledge well!  

Larry Chait

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Comment by Dan Ballard on March 13, 2013 at 4:38pm

Alexander Poltorak and Paul Lerner wrote a fine article explaining why they believe corporate officers and directors can be held liable for wasting the company’s intellectual property assets. See

I’ve yet to read a court decision, however, in either a civil or criminal suit, SEC action, bankruptcy proceeding, tax court proceeding, or any other adjudicative proceeding, where the court addressed whether a corporate officer or director wasted intellectual property assets due to mismanagement. A number of civil complaints alleging intellectual property waste have been filed but no such claim, to my knowledge, has ever been finally adjudicated. Absent a court decision specifically addressing the matter, intellectual property attorneys are left with advising their clients that while wasting intellectual property assets is very likely an actionable wrong we have no history from which we can forecast how a court will deal with such a claim. If anyone knows of any such proceeding I’d appreciate a citation to it.

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