Archive for March, 2010
Innovation fatigue due to inadequate intellectual property rights and property rights in general occurs in many other nations today, and is strongly correlated with economic difficulty in such nations. Hernando de Soto, a Peruvian economist and winner of many awards such as the 2006 Innovation Award from The Economist for the promotion of property rights and economic development, has shown that lack of property rights has been a key factor in keeping poor nations poor. It is respect of property rights that creates the means for men to be equal in opportunity. Intellectual property rights are part of that, and when they are in jeopardy, we should be concerned.
In Brazil, for example, a nation with tremendous potential for further economic development, recent government actions related to a trade dispute with the US over cotton threaten to reduce the value of US patents held by people in Brazil. In “Brazil Close to Declaring War on US IP” over at IAM Magazine, we read about the dangerous actions being taken by the Brazilian government. There may be many long-term costs for whatever short-term gains they obtain. This could harm innovation and economic development in that nation.
One example in the US of the attack on patent rights comes from the recent court case Association for Molecular Pathology v. USPTO in which a body of patents obtained by Myriad Genetics (NASDAQ:MYGN) has been declared invalid by a judge using dubious arguments presented by the ACLU. I am especially troubled that the patents were declared invalid for not treating patentable subject matter under 35 U.S.C. Â§ 101.
Eric Guttag over at IP Watchdog offers some convincing arguments about the absurdity of the ACLU’s position and the injustice of Judge Sweet’s rulings. Please read the full article, “Foaming at the Mouth: The Inane Ruling in the Gene Patents Case.” Here is one excerpt:
What is most alarming about Judge Sweetâ€™s opinion is his characterization (or more appropriately mischaracterization) of the CCPAâ€™s Bergy case. Judge Sweet makes numerous quotes from Judge Richâ€™s opinion in Bergy on how 35 U.S.C. Â§ 101 should be interpreted. But what Judge Sweet neglects to point out is that Judge Rich ruled in Bergy that a biologically pure culture was deemed to be patent-eligible under 35 U.S.C. Â§ 101. Why did Judge Sweet neglect to point out this highly relevant fact? Instead, if the holding in Bergy is considered in appropriate context, it supports Myriadâ€™s â€œisolatedâ€ BRCA1 and BRCA2 gene sequences as being at least patent-eligible under 35 U.S.C. Â§ 101 because they donâ€™t exist in nature and cannot exist without significant human intervention. . . .
In the end, it is my considered opinion that Judge Sweet knew the result he wanted to reach (i.e., invalidate Myriadâ€™s patents), and simply cobbled together a justification for it. (Treating the claims in Myriadâ€™s patents are a â€œlawyerâ€™s trickâ€ also doesnâ€™t suggest impartiality.) If nothing else, there is enough of a dispute about the essential facts needed to reach Judge Sweetâ€™s conclusion to deny the plaintiffâ€™s motion for summary judgment of invalidity based on 35 U.S.C. Â§ 101. That Judge Sweet needed to spend 152 pages trying to justify his grant of plaintiffâ€™s motion for summary judgment speaks volumes about why this grant was inappropriate.
At many levels in the US and in other nations, there seems to be an increasing hostility toward patents and intellectual property rights for inventors. One of the best things that can be done to stimulate the economy right now would be to strengthen the USPTO, reduce examination time, and instill a healthy respect in the judiciary for property and intellectual property rights. Adding to the uncertainty, cost, and delay of patent protection only weakens the economy, and hinders innovation through yet another “innovation fatigue factor.”
For connecting one human to another, it’s been said that any two people can be connected by acquaintances in six steps, hence the concept of “six degrees of separation.” The term “seven degrees of separation” occurred to me when reading Malcolm Gladwell’s discussion of airliner accidents in his outstanding book, Outliers: The Story of Success. He observes that extensive studies of airliner crashes show that the fatal tragedies often require a combination of seven things going wrong, any one of which might just be an inconvenience or minor problem by itself, but in combination with the others can lead to disaster. When it comes to connecting skilled humans to the very disasters that they have been carefully trained to avoid, there are seven degrees of separation to disaster.
While mechanical defects, fatigue, and bad weather are often involves in the seven degrees of separation, these airliner disasters almost always involve flaws in interpersonal communication. For example, there may be a copilot who is afraid to speak up and challenge the pilot when an obvious mistake is being made, or there is a lack of clarity in communicating a problem to the air traffic controllers. When trouble is brewing, success often requires extensive communication between the flight crew, other crew members, ATC staff, and sometimes others. Plans must be made, checked, implemented, revised, clarified, conveyed, and so forth, at many levels to handle an emergency properly. When crew members keep their mouths shut and don’t share what they know or sense, when courtesy or fear stops urgent information from being shared, or when there are cultural or linguistic barriers to effective communication, multiple mistakes and miscues can accumulate, whittling away at the separation between survival and disaster. It’s that way in the world of innovation as well.
Superior IQ and innovative genius is often far less important than the ability to communicate. Disasters in innovation and new product development are often due not to lack of intelligence among the innovators and corporate leaders, but gaps in communication. Launching a product and safely navigating it through the storms of the market can be much trickier than flying an airplane. The flight of a new product always involves malfunctions and emergencies that require communication skills above all. Information from the market must be effectively shared with the developers. Plans must be shared and communicated with external partners and internal teams. Benefits and features must be effectively communicated to end-users. Expectations must be clearly conveyed to suppliers and service providers. A plethora of data must be handled and shared in ways that inspire, motivate, drive action, and keep all parties aligned.
As in an airplane emergency, “yes men” are not the people you need around to help. You don’t want devil’s advocates either or professional naysayers–you need people willing to share what they know and challenge directions and assumptions that may mislead the project or the company. You need people who can help you confront and conquer the brutal facts of your present reality. (See my previous post on the Stockdale paradox and the danger of optimism.)
More than words alone are involved in the communication relays that are essential for a successful new product flight. Intangibles related to trust, loyalty, and common agendas must be in place. It’s all about relationships, and these take time and effort to build and maintain. Unreliable or misleading communication can break those relationships and jam navigation systems, as can abusing or taking advantage of partners and employees. Bonds of trust and mutual respect inside and outside the corporation are essential to maintaining effective communication and bringing about the alignment and common purpose needed for innovation to succeed.
As Gladwell notes, the seven errors that tend to accumulate in major airline disasters “are rarely problems of knowledge or flying skill. . . . The kinds of errors that cause plane crashes are invariably errors of teamwork and communication.” Ditto for the risky, high-flying adventure of innovation, where crashes are the rule rather than the exception. It’s not that the team wasn’t skilled or clever, but fundamental gaps in teamwork and communication resulted in the product launch smashing at full speed into barriers they failed to notice or attempting landings on runways that weren’t there. These disasters are always going to be far more likely than airplane disasters, but improved communication and teamwork across your innovation ecosystem can do much to bring you safely home.
In Conquering Innovation Fatigue, our chapter on the Horn of Innovation is devoted to illustrating the importance of including the innovation team in feedback loops that bring data from the marketplace to the innovators to allow them to make rapid on-the-fly adjustments for iterative innovation. Cut off that communication, and your innovators are flying blind. Blind innovation is what fills the convention “innovation funnel” with numerous abortive attempts that need to be weeded out. Keeping innovators inside the loop with clear and instant communication gives them a more clear map and helps them work with your team to develop the right flight plan for success.
Innovation success is all about abundant communication and teamwork, not hand-offs that isolate those with the vision from those at the helm. Innovation is disaster prone enough when everything is running well–no need wiping our a half-dozen of your degrees of separation from disaster by your own communication and relationship mistakes from the beginning.
Years ago in exploring emerging technology in consumer products, I was impressed with the development of the foaming pump from Airspray N.V. This pump has become widespread, allowing liquid soap and other solutions to emerge from a pump dispenser as a rich foam without the need for propellants. Cool product. I’ve also looked over some of the associated patent estate and have been impressed again. Robert Brands was the CEO of Airspray and took that pump to the world. Through his experiences at Airspray, then at Rexam after they acquired Airspray, and now as an innovation coach, Robert knows a lot about real-world innovation. He has shared this knowledge in a new book, Robert’s Rules of Innovation: A 10-Step Program for Corporate Survival.
Robert’s Rules of Innovation offers a fresh perspective on innovation processes and approaches from an experienced leader who knows what it takes to bring products to the market. This book draws upon not only his experience, but the experience and wisdom of many others that he has turned to for various sections of the book.
Ten rules of innovation are presented in this highly readable and accessible book. These rules include the need to inspire, the need to have a new product development process such as the Stage-GateÂ® process, the importance of sound idea management processes, the need to observe and measure progress, etc. Each of these principles is reviewed in Chapter 2, and an innovation audit approach is presented in Chapter 3 to help leaders evaluate where their company is for each of the 10 rules. Several chapters follow which help guide leaders in implementing the rules such as:
- crafting a culture of innovation (a theme of Chapter 4),
- innovating with multinational teams (Chapter 5), with tips for working with people from nations such as Brazil and China;
- developing intellectual property in “Patently Obvious,” the title of Chapter 6, which offers basic information on patents, trademarks, and copyrights.
An innovation checklist is presented in Chapter 8 to summarize some of the teachings.
Appendices provide detailed flow charts on new product development processes that may be helpful to those implementing such systems.
The book products a broad and useful overview from an experienced entrepreneur and consultant in innovation and new product development. The focus may be heavy on the consumer products side of innovation. The beginning-to-end scope of the book also means that information tends to be at a broad, general level. Some of the bullet points may leave readers wondering exactly what is meant or how to follow the instructions.
While some of the information, naturally, is already out there in the literature, I liked the selection of 10 principles to focus on and especially appreciated the contributions in the chapters on the innovation audit and multinational teams. Robert’s experience with multinational teams can provide a helpful foundation for others in this increasingly global business environment.
The book may be most helpful to corporate leaders and entrepreneurs launching companies focused on innovative new products, but there are gems for innovators and champions of innovation at all levels.
Congratulations to Robert Brands for this addition to the literature on innovation!
Nussbaum on Design (BusinessWeek) has a though-provoking column that mentions several innovation principles from designer Diego Rodriquez. One of these is “Killing good ideas is a good idea.” That’s the kind of counter-intuitive blasphemy that merits reflection. Of course, developing good ideas is essential, but without the killing phase, good ideas can lead to “idea cancer.” Ideas from late-stage idea cancer strangle many organizations and many minds–when ideas grow without control, unregulated and unchecked by proper objectives and reality. Ideas can metastasize and choke the arteries of business, cloud the mind, and weaken all life support systems in the end, unless they are regulated and killed at the appropriate time. So many great failures begin with good ideas, and lots of them.
Innovation is often more about execution and planning than idea generation. A weak idea, implemented ITERATIVELY with the right talent, can be adjusted based on feedback from the system (e.g., the market) and become successful. Even mediocre ideas can beat good ideas if there are great skills, good leaders, and good execution. But add an occasional great idea to the mix and the success can be remarkable, if the dream isn’t cluttered with lots of distracting good ideas along the way.
Innovation requires discipline. One has to focus and learn iteratively in the process, and not let unrestrained good ideas shut down your innovation engines with “idea cancer.”
It’s that way in the business world. too. Companies can create tidy org charts and draft neat process maps to describe how they work, but the unseen reality outside the visible systems may be what really dominates operations. Increasingly, experts in knowledge management are learning that easily overlooked and often invisible intangibles can dominate corporate value and performance. Numerous intangible transactions may be essential to the success of a company, including casual information sharing between trusted friends, helpful exchanges of tips and best practices between employees or between external partners and internal employees, or loyalty that is gained when people are included in decision making. The invisible linkages and hard-to-observe exchanges in a company’s internal an external ecosystems may be the real engines of value creation, regardless of what is on a process map or workstream. By not understanding the value of such intangibles, corporations can easily break key linkages and crush subtle engines of value creation.
Many companies focus on their “value chains” – a term popularized by Michael Porter in his seminal 1985 work, Competitive Advantage. The value chain describes the linear chain of events as materials and products move from sourcing through manufacturing and out to the market. It is a highly useful paradigm for manufacturing and was highly applicable to much of the economy in the era when Porter was doing his research. But since that time, the explosion of the knowledge economy has changed the way we work and create value. One of my favorite authors, Verna Allee, a revolutionary expert in knowledge management, has detailed the move from the value chain to modern ecosystems and Value Networks in her book, The Future of Knowledge: Increasing Prosperity through Value Networks (Burlington, MA: Elsevier Science, 2003). Verna Allee and Associates have introduced a clever, methodical tool called Value Network Analysis for analyzing and visualizing the transactions of intangibles and tangibles that affect a business.
After my training in Value Network Analysis by Verna and her associate, Oliver Schwabe, an exciting new perspective on business and human behavior opened up. I have been highly impressed with the power of Value Network Analysis and the insights that it can rapidly deliver for a company. The Value Network Analysis work that Innovationedge has done as part of larger projects for some of our clients has been a very exciting part of my work since joining Cheryl Perkins’ exciting company. We value the tool enough that we had Verna Allee speak at the 2008 CoDev conference to introduce other business leaders to the basic concepts behind Value Network Analysis. I’m very pleased to see a community emerging of people using Value Network Analysis and developing exciting tools for it.
Here are some resources that you may find helpful in further exploring this area:
- Hosted Value Network Tools
- A Value Network Approach (PDF) – 2002 Whitepaper by Verna Allee
- ValueNet Worksâ„¢ Analysis for Boeing (PDF)
Part of the initial output in Value Network Analysis are maps, called “holomaps,” showing human entities as nodes and transactions of tangible or intangible items between them. There is much that can be learned from such holomaps – a topic for later discussion. For now I’ll show you two sample holomaps I created to illustrate simple ecosystems. One shows several external nodes around a manufacturer and the other shows some structure within part of a corporation. For simplicity, the maps lack all the labels explaining the transactions.
One interesting approach is to use the “holomaps” you get in Value Network Analysis as tools for “what if” scenarios to explore what new partners might do for your business model, or what new business models might do for your ecosystem. Using holomaps to explore innovation ecosystems is a particularly fruitful approach for those doing open innovation and wondering who should be in their external ecosystem.
We have further information on this topic that we’d be happy to share with you. It’s certainly something you should look at to understand how business really works.
One of the real champions of innovation and entrepreneurship, Brian Fried, has created a successful new radio program to meet the needs of inventors and entrepreneurs: Got Invention Radio at GotInvention.com. It’s a one-hour show every Thursday night at 7:00 p.m. CST (if you’re in China or Singapore, for example, that should be 8 a.m. Friday morning–the perfect way to start your day!) I’m the next guest this Thursday night. I’ll be speaking about intellectual property, with practical tips for inventors who want to get quality patent protection. There are some pitfalls to avoid and some tips you need to know about. A quality patent can make all the difference for the long-term success of a product or business, so tune in and join the conversation.
At least two callers will receive free copies of the book, Conquering Innovation Fatigue. Please mention this blog when you call!
Go to Gotinvention.com/shows and click on the green area in the upper right-hand portion of the screen to launch your media player and listen. To be a caller, dial 877-474-3307. Please join us this Thursday night, March 18.
The following week, March 25, you can hear Cheryl Perkins, CEO of Innovationedge. Don’t miss that one, either!
Hey, innovation fans, thought I’d share with you a simple innovation you can use if you like to freeze fruit. I found some delicious pineapples on sale at Aldi for 99 cents and bought several. Chopped them up into nice pieces and froze them. Challenge is, they stick together and form a solid frozen mass. Commercial frozen fruit can be agitated or separated during freezing to prevent welding of pieces together, but how can a consumer do it? I bet this is already out there, but a handy solution I came up with is to coat the fruit with a little corn syrup before freezing. Depending on how cold your freezer is, the fruit may still become welded together, but it’s much easier to loosen the mass into individual pieces.
Just enjoyed a delicious chunk of frozen pineapple, courtesy of my corn-syrup pretreatment method. OK, not much of an innovation, but still, enjoy!
One of the nine major innovation fatigue factors that we treat in Conquering Innovation Fatigue is theft of the invention, of the IP, or other assets. One of the most painful and most common sources of theft of an invention is from partners such as vendors or customers. One apparent example is the dispute between Woodstream Corp. and Agrizap, Inc., a case that went to district court and then on appeal to the Federal Circuit Court. Again, there are always two sides to these stories, and we encourage people not to judge losers of legal battles too harshly, for truth and justice are not always the product of courts. But the apparent facts of the case, as reported in public documents, illustrate the kind of problems that many inventors face and need to be protected against.
Agrizap, Inc. had developed a rat killer based on electrocution. It was patented in US Pat. No. 5,949,636. Woodstream, the maker of the VictorÂ® brand pest control products, approached and developed a partnership with Agrizap. During negotiations under a non-disclosure agreement, Woodstream sent samples of the Agrizap product to Chinese manufacturers. Agrizap learned of this and challenged their motives, but a vice president of Woodstream assured Woodstream that the action was simply to obtain a price quote for use in negotiation with Agrizap and was permitted under a particular section of the non-disclosure agreement. However, it appears that they were looking for help in making their own product. Woodstream soon licensed the patent from Agrizap to allow Woodstream to sell the product to a limited group of companies such as Home Depot and Loweâ€™s. Agrizap agreed not to compete in those markets. They provided Woodstream with products, not knowing that Woodstream was working on developing their own version of the same. Within three years of the partnership, they were competing directly with Agrizap with their own version of the product.
Agrizap sued for patent infringement. Unfortunately, during appeal, the Federal Circuit used the recent KSR decision on obviousness to argue that the patent was simply a combination of known elements to achieve a predictable result, and thus invalidated the patent. But Agrizap also sued over fraudulent misrepresentation and won a $1.2 million award in spite of losing their patent. The existence of good documentation about their agreements, including oral aspects of the agreement, proved to be more valuable in the end than the patent itself. (Resource: â€œ. . . Eliminates Pesky Patents Too! Agrizap, Inc. v. Woodstream Corp.,â€ Advanced Patent Trial Strategies (APaTSÂ®) series, Robins, Kaplan, Miller and Ciresi, LLP, Minneapolis, Minnesota, April 14, 2008.)
In this case, unfortunately, the activities of Woodstream forced Agrizap to sue and thereby put their patent at risk. Had Woodstream been more forthcoming, Agrizap might have been able to license the patent more broadly or continue using it to generate revenue. One can argue that eliminating an invalid patent is a public service, and that may be the case, but the invalidity is painful when it comes from rules that change midstream, adding new uncertainties for patent owners. And in any case, the apparent misrepresentation by Woodstream resulted in substantial loss for Agrizap. It gave Woodstream several years of market penetration before they launched their own product, when it would have been much better for Agrizap–had they known of Woodstreamâ€™s intent–to simply enter the market directly and build momentum before Agrizap had time to reverse engineer their product. No one wants to form a partnership with someone who secretly plans to turn around and compete directly against you.
Choose your partners and friends carefully. The ones with poor ethics will usually lead to regret and loss. Make sure you have solid documentation of your agreements and understandings, in addition to strong patents, in order to protect your interests in spite of the uncertainties of law.
Last year I discussed the bold technology transfer and commercialization work of Exploit Technologies in Singapore under the leadership of Executive Director Boon Swan Foo. Their goal is an important one for the economy of Singapore. They are working with a booming portfolio of patents from the intense research being funded by the government of Singapore, seeking to license the patents and promote full commercialization. Mr. Boon has recently retired, turning the keys over to the new CEO, Mr. Philip Lim. I had the privilege of meeting Philip when I was at Singapore last year to speak at Innovation and Enterprise Week 2009, a remarkable event held at Biopolis. Philip Lim shares some of his thoughts in Part 1 and Part 2 of a blog post at Exploit Technologies. I’d like to share and comment upon a few of his thoughts from Part 2, as reported by Alfred Siew:
What are the biggest technologies to focus on?
With some 800 to 1,000 patents within A*Star to tap on, new Exploit Technologies CEO Philip Lim would be hard-pressed to name a few.
Still, gamely, he does point out a couple, during an interview.
One area is nano-imprinting lithography (NIL), a manufacturing process that is set to bring many benefits to making electronics that control, say, the liquid from an inkjet printer, or even for biomolecular sorting devices in the emerging bio-sciences equipment market.
Another area is ultrawideband (UWB) technology, a radio technology that promises to transfer audio and video over the air with speeds that are more common on wired connections.
With it, hi-fi equipment would one day do away with messy cables used to connect them together.
Taking over from long-time A*Star stalwart Boon Swan Foo, Philip says his main task is to group together complimentary expertise in the hottest fields, so as to come up with more products that can go to market fast.
He also intends to incentivise people to play as a team. By combining knowledge of market requirements, as well as the expertise that A*Star has, Exploit can help map out emerging and potentially viable areas which Singapore can focus on, he says.
For example, with UWB, the expertise of two A*Star institutes – the Institute for Infocomm Research (IÂ²R) for its UWB design, and the Institute of Microelectronics (IME) for its expertise in manufacturing electronics – can easily be combined.
He notes: “One has the hardware (IME), the other has the software (IÂ²R); put them together and you got UWB!”
“We want to be more outcome-focused and customer-focused in the way we do things,” he says, referring to a more streamlined approach to getting technologies out from the lab bench to retail shelves.
But he is not a number-cruncher, he explains. “We see ourselves as facilitators… KPIs, while tangible, have their limits.”
The dollar value of licenses made possible with Exploit, he notes, does not count the multiplier effect of the entire value chain of a technology. For example, technology behind a simple, low-cost keypad can be used in a much more expensive handphone, and has more value than its mere licensing fee.
“If we can generate ‘economic outcomes’, like sustainable innovation and more jobs for Singapore, then we’ve done our jobs,” says Philip, of Exploit.
He adds: “If we do more here, companies will like being based here. Instead of moving to cheaper manufacturing bases, they will want to stay in Singapore to keep in touch with the latest technologies.”
“For $1 in licensing, we may be creating thousands of dollars in economic value if jobs are kept here.”
Economic outcomes are what it’s all about. Philip wisely recognizes that successful tech transfer of government-funded R&D can result in long-term economic value for Singapore. They are focused on a long-term plan that will bring more companies and more jobs to Singapore to take advantage of the talent, the technology, and the culture of success that is being crafted.
One of the challenges for commercialization success in the Singaporean model will be continually crafting a portfolio of not just patents, but know-how and other intellectual assets that create synergy with the marketing story that fits the technology and business opportunities being developed. The marketing perspective needs to be brought into the technology plans and the IP strategy to create portfolios that encompass winning business models and can quickly give a partner a competitive advantage. The world beyond 2010 increasingly will rely on ecosystems of partnerships for success, united by the energy of clever business models in which marketing savvy and IP prowess go hand-in-hand. A*STAR and Exploit Technologies have the vision, and they are continuing to build the discipline and partnerships to make it happen. I look forward to watching this story unfold in the coming years.
Congratulations to Philip Lim and Exploit Technologies, and best wishes in your path forward to innovation success!
The latest issue of Consumer Goods Technology has a story that indirectly reveals some important secrets of successful innovation. The article is the cover story by Alarice Padilla, “Game-Changing Innovation: The Maker of Louisville Slugger Revolutionizes the Sporting Good Market with Bionic Glove Technology,” which describes the rise of a remarkable new glove that gives athletes better control. The glove has a unique padding system that fills recesses in the fingers and palm to give better contact with what the hand is holding. This results in a better, less stressful grip.
What I’d like to emphasize is that this innovation was the result of open innovation that began with a random encounter. Bill Clark of Hillerich and Bradsby Company, the company behind the Louisville Slugger and Powerbuilt Golf, was visiting the Louisville Slugger Museum when he met James Kleinert, a famous orthopedic hand surgeon. They began talking, and this would later lead to collaboration and the successful introduction of the only sports glove on the market designed by an orthopedic surgeon.
The real secrets for success behind this story, in my opinion, involve efforts to build and maintain relationships. First, Bill Clark wasn’t sitting at his desk. He got out into an environment where he could meet outsiders that might share some interest in the kind of products his company made. Then he took the initiative to talk with others and learn from them. When he found someone interesting through a chance encounter, he obviously took the initiative to follow up and keep that relationship alive long enough to explore the possibility of learning from or working with the new contact. I wish more had been reported on these steps, but it’s clear that it began with a seemingly random encounter enhanced with follow-up and and a willingness to collaborate for innovation.
Maybe Hillerich and Bradsby Company just got very lucky, or maybe they actively encourage open innovation approaches that motivate innovation leaders to get out and meet people, follow up, and collaborate when it makes sense. I hope the latter is the case. Whether it is or not, all of us can learn from this success. Creating an open innovation culture in your company and in your life will greatly increase the chances of random meetings leading to non-random success in innovation. (These principles relate to my previous post on the social aspects of innovation in which I plug one of the few business books that have genuinely changed my life, Keith Ferrazzi’s Never Eat Alone: And Other Secrets to Success, One Relationship at a Time. The principles he teaches are at the heart of a successful open innovation mentality and culture.)