Gene Slowinski

Harnessing External Technology for Innovation

OVERVIEW: Companies continuously seek to innovate more quickly and more effectively both within and often beyond their core markets and product lines. This has resulted in the practice of “open innovation” wherein firms recognize that all components of an innovation do not need to come from within, that they can accelerate their own efforts or perhaps even broaden the scope of these efforts by acquiring some of the required technology externally. Research across multiple business segments has identified a number of practices that firms have adopted to identify external technology with which to bolster their own innovation processes. These practices have been assembled into a topology that provides a framework for categorizing the different methodologies and organizational structures for “sourcing” external technology.

Effective Practices for Sourcing Innovation

OVERVIEW: Even large firms cannot mobilize all the ideas, technology, business expertise, and market channels they need to deliver breakthrough products. A new model is rapidly emerging in which firms collaborate with other world-class organizations in an open model to jointly develop the next generation of goods and services. From interviews with managers who are responsible for the external technology efforts at 12 leading firms, innovation-sourcing practices were identified in three key areas: 1) linking external innovation to strategy, 2) defining what the firm wants to access externally, and 3) leading cultural change. These practices range from working with suppliers to applying the “Want, Find, Get, Manage” model.

Good Practices in Open Innovation

OVERVIEW: Open innovation (OI) has become a mainstream organizational process. Firms are establishing OI groups, allocating budgets, and measuring results. In this article, we identify twelve “good practices” associated with high quality open innovation efforts. In our experience, these practices are key inputs to the firms OI system, leading to high quality results when effectively executed. The goal of this article is to help management build the practices into their OI system and make continuous improvements in their OI processes.

Better Practices for Managing Intellectual Assets in Collaborations

OVERVIEW: Firms moving to a model in which they complement their internal innovation efforts with innovation from external sources need to manage their intellectual property carefully. This requires careful internal alignment and appropriate negotiations of non-disclosure and joint development agreements, at times that are appropriate for maintaining IP rights. Moving too soon can expose the firm to contamination, but waiting too long (while negotiating agreements) can result in a loss of the fruits of the collaboration. Likewise, the timing of negotiating commercial terms is a critical decision as the market-facing firm has more power before new technology is demonstrated. But the power shifts once a technology is demonstrated, and spending time negotiating commercial terms for an unproven technology can waste scarce resources.

Developing an Effective Strategy for Managing Intellectual Assets

OVERVIEW: Although many companies today are exploring ways to extract value from their patent portfolios, most use ad hoc approaches that are inefficient and lead to disappointing results. Leading firms, on the other hand, take a proactive approach and systematically tie their intellectual asset management strategy to the core strategies of the firm. A study of more than 70 firms illuminates two key aspects of this approach: how to strategically organize the firms intellectual asset portfolio and how to extract value from that portfolio. This article describes how firms strategically organize their intellectual assets to maximize their value to the firm. A subsequent article will describe specific methods firms use to extract value from their intellectual asset portfolio.

Protecting IP in Collaborative Research

OVERVIEW: The number of collaborative research agreements is increasing rapidly. Large high-tech companies are engaging smaller ones, Federal laboratories, universities, international firms, and competitors in ways not dreamed of just five years ago. Central to these collaborations is the need to share proprietary intellectual property (IP) to meet the collaborations objectives, and to jointly create new IP. Firms face a number of predictable pitfalls as they work to achieve these objectives. However, these pitfalls can be overcome through an open discussion of risk and the linking of agreements to the marketplace and the technical intents of each party.

Protecting Know-How and Trade Secrets in Collaborative R&d Relationships

OVERVIEW: Collaborative R&D is growing rapidly, and the need to share proprietary intellectual assets is central to these relationships. Equally important is the need to protect that information from unintended use. Firms use legal as well as non-legal methods to protect their intellectual assets. Legal methods include crafting a series of agreements and linking the agreements to the activities of the collaboration. Non-legal methods include ensuring that employees in both firms understand what information must be shared with the partner, may be shared with the partner and must never be shared with the partner. Training also includes a clear understanding of each firms rights-to-use the disclosed information.

After the Acquisition: Managing Paranoid People in Schizophrenic Organizations

OVERVIEW: The integration of technology organizations is a key element in the success of mergers and acquisitions. Research managers benefit significantly by an awareness of the unique set of people and organizational management skills that impact the integration process. R&D leadership provides significant value to the process if it becomes involved early in the planning process and remains involved through due diligence and post-closing integration of the combined organizations. Successful managers devote special attention to developing a common vision of the new organization, conducting technical due diligence, retaining the R&D infrastructure, managing employees through change, integrating intellectual asset portfolios, and integrating disparate R&D cultures.

Extracting Value from Intellectual Assets

OVERVIEW: Intellectual assets are fundamental to the operation of technology-intensive firms. Companies skilled at managing intellectual property as a business strategy protect the core of the business while licensing IP to generate a return on investment. Developing a reasonable and defensible valuation model is key to the success of any intellectual asset management program. A previous article described how leading firms strategically organize their intellectual asset portfolios (RTM, Jan.–Feb. 2005). This article describes the valuation of IP, specific methods for extracting value from the IP portfolio, organizing for out-licensing technology, and the career opportunities for licensing professionals.

Dealing with Shortages of Critical Materials

OVERVIEW: Critical metals are high-value elements used in very small amounts that provide key functionality to technology products. These metals are crucial for the functioning of a technological society. Certainty of supply is a growing concern. As of this writing, China produces over 95 percent of the worlds rare earths and over 80 percent of the worlds tungsten and magnesium. This article examines the methodologies firms use to identify and communicate potential shortages of critical metals, formulate risk mitigation strategies, and act to reduce risk by reducing demand.