Your innovation strategy needs a strategy – fix it before it breaks
Business growth is a number one priority for senior executives as the responsibility of strategic business decision making falls on their shoulders. What is more, they need to ensure that their teams deliver consistent results, as a strategy cannot be considered successful if the team fails to implement it internally in the first place.
The situation becomes contentious when it comes to intellectual property. Because it is often considered to play a supporting role in the business strategy, most senior business executives have little to no involvement in the IP functioning of their team. But in order to create a sound business strategy, it is crucial for senior executives to form a baseline understanding of IP strategy.
This update discusses the reasons that senior executives often have less involvement in building IP strategies and the practical solutions to this problem.
This is a fundamental property of intangibles, such as IP. They become valuable only in the context of the business. That is to say, when their roles in supporting the corporate business strategy are made explicit, and/or when they are processed through the organization’s other business assets (such as manufacturing or distribution) to produce a protected product or service that is attractive to customers. In order to be able to manage IP effectively as business assets, it is necessary to understand what a patent, or trademark, or registered design, actually does for the business – WIPO
As litigation and enforcement by patent assertion entities (PAEs) has increased over the years, more companies and executives have started to realise the importance of intellectual property. One striking observation is that only relying on their own patents alone cannot save a company from the threat of litigation. Moreover, their own patents alone may not be sufficient to launch a product in the market. A large number of surrounding patents are required too. In addition, others in the field may have patents that can be licensed to combat the fear of litigation by PAEs. Companies have begun to realise this threat and quickly develop their own licensing programmes.
Today, almost every major company – including IBM, Microsoft and Qualcomm – has a large IP portfolio and a licensing programme of its own. For not only behemoths, but companies of all sizes, especially SMEs, institutionalising knowledge of the company’s IP portfolio is essential. This enables the company to develop its portfolio, increase productivity and bring recurring value to the business.
Even technology start-ups and spin-off companies have started to commercialise their innovations and other existing technologies. However, successful commercialisation of innovation requires knowledge of how to use the technology in conjunction with other capabilities or assets.
How does institutionalising knowledge of your company’s IP portfolio improve productivity and bring recurring value to the business?
Patents are intangible assets that need regular maintenance and meticulous review mechanisms to maximise their value to a company. There is an ongoing need to understand what is in your portfolio, as this regularly changes as a result of organic and inorganic factors (ie, new patents are granted, some are acquired, some expire and some are sold or abandoned).
What is more, as various members of the IP team have invested their knowledge and wisdom in building your IP portfolio, there is a high chance of this knowledge being lost when a team member leaves the organisation.
In many instances, senior and experienced team members understand the vision of the strategy and have firsthand experience of other nuances and strategic aspects. However, this information is unavailable to other team members.
Indeed, there could be instances where team members struggle to do things that a previous team member did. This confusion over who has the relevant information to execute a project or task efficiently leads to a decrease in productivity and an extended timeline.
If no system is in place to capture maximum tacit knowledge, the growth engine of your company could stop humming. Tacit knowledge sharing is a competitive advantage, which is why some companies constantly innovate, while other struggle.
A business grows by passing on knowledge and responsibilities from senior employees to junior employees or new entrants. Some people and teams are good at doing this, others are not. You may also face situations where people with the most knowledge are jumping ship. This can create a void which takes time to fill using traditional processes.
Therefore, the knowledge of a company should be institutionalised to save the progress made in different projects. However, this will not be enough in the long run. When a large amount of data is documented or institutionalised, you may face a catch-22 situation, managing a large amount of structured, semi-structured and unstructured data.
Therefore, as a senior executive, you must provide your organisation with a system that can institutionalise the knowledge of various projects at a single location. At the same time, it must be easily accessible to the team. This will help all team members to learn and grow.
What is a ‘system’?
In our practice, we recognise a ‘system’ to be a missing piece of the business strategy that can homogenise all the knowledge and progress of a company, making way for its smart operating procedures.
A system can create more flexibility by ensuring that people consistently follow a process. This saves time and money by removing the irregularities associated with gathering the information (related to prior project or progress details) for strategic decision making or execution.
A business is a standalone entity made up of various systems and it is all about putting the right people at the right place to ensure that it runs smoothly. This is arguably the most important aspect of a business, as once you have systemised the process and procedures, your business can run without you. This then gives you the creative freedom to explore different areas of the business.
A business system can provide in-depth insight by connecting the dots and bridging the gaps between the business strategy and the internal functioning of a company. It adjoins intricate business parts (eg, intellectual property) and interrelated steps to work together for the larger purpose of achieving business goals. This helps in applying defined principles and practices to the business processes in order to deliver maximum value to the organisation.
A business system can unify two key pillars of an organisation: problem solving and decision making. Although many common tools and methodologies can be utilised at different levels, independent tools meant for specific tasks do not constitute a system.
Is there a system for your IP-centric business requirements?
We do not see much strategic innovation in the IP department. Instead, the IP team, legal professionals and even business executives have to work on general purpose software which is not designed for purposes as intricate as IP analysis (eg, Microsoft Word, Microsoft Excel worksheets, Google Docs, Google Sheets and Outlook emails) in the pursuit of an ideal IP-centric system for their analysis and strategic business decisions.
Although you may think that spreadsheets have solved that problem, in our experience, they work “barely OK” and only for certain projects. They are difficult to manage on a continuing basis because, as your patent portfolio evolves and work is divided among many contributors, records become redundant, inconsistent and disorganised.
When patent claim reviews are performed using conventional spreadsheet applications, a number of issues can cause problems and inefficiencies, including:
- being prone to error due to:
- formatting the document to suit your needs;
- inputting large amounts of data accurately;
- creating duplicate data entries;
- being difficult to share and locate (where are shared files stored?); and
- differences in version control (what is the latest version and who has access to it?).
According to a study published by CIO magazine, “on average, four out of five spreadsheets contained errors”. Moreover, the same article explained how these errors took place due to shortcomings of spreadsheets and could cost tens of millions of dollars to a company.
That being said, there are many platforms and tools which are purposely built for performing niche IP-centric tasks. However, they do little more than document the management of an IP asset.
For example, there are various tools available for monitoring automatic USPTO status updates, deadlines, key client details, trademark docketing and IP management solutions. But this software would be helpful only to document an IP asset management process and could not be used as a system for collaboration and strategic business decision making.
Similarly, analytics is another area that has witnessed some growth in regard to maximum innovation in IP-centric software. That is, the tools available for analytics allow an analyst to take up a patent set, analyse it and visualise it in terms of varying trends (eg, filing trends, geographical distribution of research, trend lines). Again, mere visualisation of certain trends is just one element of a system.
Therefore, such platforms and tools are good for many small and niche tasks but cannot be used as a system for collaborative knowledge leveraging for patent review projects and making strategic business decisions related to patents or products.
From an executive perspective, the best way to demonstrate the value of a modern IP management system is through a structured business case detailing the cost savings for implementing a holistic approach to IP management.
From a product perspective, it would be to ensure that the IP team understands the level of productivity created by process automation. Finally, from a business perspective, it would be to demonstrate enhanced decision-making capabilities garnered from integrated analytics.
You can read part two of the article here.
This is an insight article whose content has not been commissioned or written by the IAM editorial team, but which has been proofed and edited to run in accordance with the IAM style guide.
Copyright © Law Business ResearchCompany Number: 03281866 VAT: GB 160 7529 10