Companies whose reported earnings didn’t clearly flow from actual sales and real assets found themselves punished by investors in 2002. Paradoxically, however, some companies face a different challenge: making use of assets that could generate revenues but haven’t been fully exploited. These neglected assets take the form of intellectual property—patents, proprietary technologies, and processes—that could be sold or licensed to others. Certain sectors, including biotechnology, pharmaceuticals, and telecommunications, have made the licensing of intellectual property a way of life. But most of the 40-plus companies we studied had projects to develop, manage, and commercialize such assets. In general, these companies have failed to capture their full value, because management hasn’t been paying enough attention.

Nonetheless, many companies—some far removed from pharmaceuticals, high technology, and other knowledge-based industries—could make substantial sums by transferring technology from a core business activity to outside industries. One consumer products company, for example, licensed a food additive as a cleansing agent in toxic-waste spills, thus recouping what had been an uncertain investment. An automaker found markets for its technology in heavy construction and health care, thus opening the door to a sustainable licensing business. Similar opportunities are more available than most executives realize.

As a...