Archive for September, 2011
Startup companies, unlike our “too big to fail” banks, can’t afford to make too many Enormous Mistakes without perishing or losing much of their value. One of the Enormous Mistakes that some startups make is neglecting intellectual property. That includes neglecting opportunities to protect their business, as well as the need to make sure they aren’t infringing other patents. These are separate issues and require separate efforts and tools. Some of the common mistakes and misconceptions of startups regarding IP are addressed in the slideshow presentation below, “What Do Startups Need to Know about Patent Law” by Jeffrey Schox.
An important point that Schox makes is that reasons smart startups file patents aren’t necessarily because they expect to license their technology or successfully sue a competitor. But having an issued or pending patent with some degree of quality is essential for attracting investor support. Investors typically expect a startup (in many fields, at least) to have IP that can be of value to the business for many years to come and can help limit the harm of competitive copying. Without that in place, that startup is much less likely to get the funds needed to thrive.
Patents play different roles at different stages in the life of a company. But neglecting IP at any stage is an Enormous Mistake that can lead to extinction.
Yesterday I had the privilege of visiting the beautiful campus of Tongji University in Shanghai where I was a speaker at a workshop on innovation and managing R&D in China. This international event was organized by a highly respected expert in global R&D management, Dr. Max von Zedtwitz, founder of GLORAD, a firm that helps companies with their R&D management issues and some of the toughest challenges of global R&D organizations. After the workshop, I had a very kind tour from a Chinese professor of the beautiful campus and the world-renowned MBA program, ranked by the Financial Times as one of the top 50 in the world.
In my remarks, I briefly touched upon what may be the biggest barrier to successful innovation and research in China: retention of talent. Indeed, companies requiring highly skilled employees repeatedly find turnover to be one of their greatest challenges. Employees gain a few months of years of experience and finally get trained to do the work you need them to do, and then they jump to somewhere else for higher pay. Large multinational companies may be viewed, for example, as good places to get trained for career advancement, resulting in those companies essentially providing training for competitors here.
There are no easy solutions to this problem, which is a challenge in most nations. But managers of skilled employees need to realize that especially in China, the guanxi or relationship between the worker and the company, or especially between the worker and the supervisor, will be an important factor. If the employee feels a sense of loyalty to the supervisor and the company, and feels that he or she is being cared for and nurtured in his or her career, the temptation to leave will be reduced, and the desire to look elsewhere may be largely forestalled.
Many things can contribute to a healthy relationship that keeps Chinese employees on your side. Managers need a great deal of training in some cases in order to be more helpful to their employees and build the respect and trust that is essentially for good guanxi. Authoritarian attitudes aren’t helpful for retention, though they can result in fast short-term results. Kindness and respect, shown in many ways, can bring out the best from employees and motivate innovators to share their best work. Good team-building events and extra-curricular activities can help, though sometimes they become viewed as a burden employees are expected to shoulder on their own time. Avoid eating into employees free time with mandatory events.
Here’s on often overlooked issue for Western-owned companies: Corporate cafeterias in Asia, if available, should have really good food. I’ve seen corporate sites with good food and noticed that the employees mention it frequently, and a site with just OK food which the employees also mention frequently. The place with the lower quality cooking has much higher turnover. Might just be a coincidence, but upgrading a cafeteria ought to be a priority for anyplace struggling with retention. If you’re in an urban setting without a need for a cafeteria, try some creative ways to make good local food affordable and readily available from time to time. If you keep food in mind as a motivator, your efforts may strike some important targets.
Western managers must be especially aware of Chinese attitudes, including the role of guanxi, the importance of family relationships, natural hesitancy in speaking out or challenging management even when truly needed, etc. Western managers really need a close relationship with key locals who can help them be aware of the feelings and concerns of team members and provide guidance in building rather than eroding relationships.
Around the world, the ways things really get done is through relationships, through guanxi. But understanding the special importance of that concept in China can help companies here find more success in innovation and new product development by retaining their star employees. And those stars can use their own network to reach out and find other stars as well. Guanxi again, not job boards, is the key to finding the right talent in the first place.
A new review of Conquering Innovation Fatigue was just published on the website of the Industrial Research Institute (IRIweb.org). The review is written by Robert J. Kumpf, the Chairman of IRI’s Board of Directors and the Chief Administrative Officer of Bayer Material Science, LLC. Here is an excerpt–see the IRI website for the full review.
The authors of Conquering Innovation Fatigue immediately captured my sympathy with the observation that “Few things make creative people wearier than empty talk about innovation.” Although it is encouraging that the topic of “innovation” is increasingly seen as important, the downside is that many “experts” are simply recycling well-known concepts. Jeffrey Lindsay, Cheryl Perkins and Mukund Karanjikar are experienced practitioners who offer useful insights into the personal, organizational, and societal challenges an innovator must overcome.
The authors structure their discussion around nine different “fatigue factors” that they group broadly into three classes: people fatigue, organization-level fatigue, and external fatigue. People fatigue factors describe elements that lead to fatigue in individual innovators, including:
- Theft of the invention and exploitation of inventors
- Innovator deficiencies (e.g., unreasonable expectations, impatience, unhealthy pride).
- The NIH syndrome (“Not Invented Here”)
Organization-level fatigue arises from the company’s strategy, culture, and actions, and includes:
- Breaking the will to share (loss of cooperation from the innovation community)
- Fundamental flaws in decision making and vision
- Open innovation fatigue (corporate barriers to external innovation and collaboration)
External fatigue originates with factors external to the individual innovator and to the organization, including:
- Patent pain: barriers to intellectual property protection.
- Regulatory pain: challenges in policy, regulation, and law.
- University-industry barriers.
The book offers some compelling examples of innovation from the prolific inventor with an unforgettable name—Philo T. Farnsworth. Although the story of Farnsworth and RCA is generally well known, the details are worth recalling. The authors build on the Farnsworth story to examine the issues around innovation fatigue in individuals.
The strongest parts of the book, however, are those chapters that examine innovation fatigue factors that are tied to organizations. These chapters—which also include examples from the touring company of The Lion King—offer the most important lesson in the book: “Employees can be paid to offer their time and energy to the corporation but in spite of what might be on a contract, they will only share their best ideas when they feel personally motivated to do so.” This fact is at the core of the challenge that many organizations face. It is expressed in phrases like “if only ____ knew what ____ knew” (fill in the blanks with your company or organization). These chapters are well worth reading and rereading….
Full review: go to the bottom of the page at http://www.iriweb.org/Public_Site/RTM/Volume_54_Year_2011/September-October2011/Information_Resources.aspx”