What about free speech? Are restrictions on speech an impediment to the distribution and use of intellectual capital? The relationship between speech and the creation and flow of value can sometimes be adversarial, the former impeding the latter.

The purpose of language is to communicate. One person has a thought that he or she wishes to communicate to another and does so via language, whether spoken or written. If the information contained in a thought represents intellectual capital, if it has stored value potential then the importance of language as a communications method is increased. Even the most potentially valuable new IC can become useless if its sender tries to communicate it in a language that its receiver doesn't understand.

Am I building a case for a wider adoption of English as the worldwide language of business? Am I building a case for less societal regulation of speech, less governmental regulation or political correctness? No, I am building a case against excessive jargon. Free speech in this sense is not speech that is uncensored but rather speech that is readily and easily understandable, speech that is free since its users do not have to spend a lot of thought to decipher it, to tap into its stored value potential.

Every discipline, every field of study has jargon and business is certainly no exception. From buzzwords to acronyms, business is often flooded with jargon. The main problem with this is that a lot of business jargon is poorly defined, poorly understood. Worse, a term often means different things to different people. Even simple, widely used terms such as profit, cost and margin can have different meanings to those trained in economics, accounting, finance, marketing. Since basic terms such as these can cause confusion, can impede the flow of IC, how much worse is the effect for newer, intuitive but often poorly defined terms such as Total Quality Management or Enterprise Resource Planning? When you discuss TQM or ERP can you be certain that the other person has the same definition and understanding of the terms as you? If not, is the other person likely to realize or admit that he or she may not fully understand, that the flow of intellectual capital is being restricted? Given that business today is often carried out in cross-functional teams it is critical that businesspeople understand each other. To improve the flow of IC either jargon should always be defined clearly and upfront by each person or it should be used sparingly if at all; note that I took my own advice on jargon by clearly defining intellectual capital at the very beginning of this site.

Why do businesspeople use jargon? There are many reasons, not the least of which is that everyone else uses jargon, a sort of professional inertia. An MBA student is exposed to jargon hundreds if not thousands of times, these exposures often expanded and reinforced in the business world. There is of course some pride involved in the use of jargon as it may indicate formal education, it may indicate possession of a certain amount of intellectual capital. To be able to serve and volley certain buzzwords and acronyms at the water cooler may be a way of identifying oneself as part of an elite group. Jargon can be used to impress but to be able to put a complex concept into easily understandable terms is to really and truly understand it, a far more impressive feat. Those who argue in favor of jargon say that it improves efficiency, it negates the need for longer explanations but a main premise of this argument is that all terms are clearly and widely understood and this is simply not the case in the business world. Is it more important to use jargon and appear to have the potential to create value or to actually create value? When it comes to style versus substance the latter will create more value every time.

Jargon can be a matter of life and death. This is not an exaggeration, as illustrated by the example of the healthcare industry. Understanding the jargon of pharmaceutical labels and instructions can be difficult and  intimidating for many people and the consequences of this reduced IC flow can include more frequent and longer duration hospitalizations, and in extreme cases even death. According to an Associated Press report, studies show that patients who have problems with medical jargon may risk their health by avoiding care altogether.

Jargon can be a matter of life and death for business.  Understanding the jargon of companies and industries can be difficult and  intimidating for many employees and the consequences of this reduced IC flow can include more frequent and longer duration crises, and in extreme cases even bankruptcy. Companies should understand that jargon-free instructions and processes can keep them healthier as employees who have a hard time comprehending jargon may feel embarrassed and avoid seeking clarification. How many companies risk their health because their employees have problems with jargon?