Part 2 of 2
The
CEO’s Innovation
Playbook
Idris Mootee
CEO idea couture inc.
1

Copyright 2007 by Idris Mootee All rights reserved.
Without limiting the right under copyright reserved above, no part of this publication may be
reproduced, stored in or introduced into a retrieval system, or transmitted in any form or
any means, without the prior written permission of the author. This book is for limited
circulation only and is not available for sale. A version of this book is available as special
order for corporate training and executive education. This is written to provide general
guidance in regard to the subject matter, it is consumed with the understanding that the
author is not engaged in rendering professional services. If legal advice or other expert
assistance is required, the service of a professional should be sought.
2

Barriers to innovation
It’s a mistake to underestimate just
how hard it is for an organization to
shake itself loose from its past.
Understandably, businesses
become very complex machines
over time. Machines that are hard-
wired to excel in the current game.
3

Barriers to innovation
As a company gets bigger and
bigger, employees get more and
more specialized. And the number
of people who understand how the
big machine works as a whole
gets smaller and smaller.
4

And then along comes an
innovative idea that turns
everything on its head.

The first step in putting this idea into
practice is to destroy the hard-wiring.
This is absolutely critical. A successful
innovator must question every
assumption about the way the core
business works.
6

This extremely difficult and
extremely important task is called
forgetting

Three innovation myths
8

Successful innovations are mostly accidents
Although many successful
innovations started out as accidents,
it’s not fair to call them ‘accidental’.
After all, most accidents get mopped
up and forgotten. The real science of
innovation lies in recognizing,
nurturing and building upon
something that would otherwise be
missed.
9

And if valuable accidents don’t
happen often enough, your first
mission is do more to allow them
to happen. And when they do, be
ready. Don’t hesitate to seize on
them and fully explore their
commercial applications.
10

Radical innovations can be achieved by good strategic
planning?
There is no template for re-
invention. Conventional methods
cannot yield radical innovations.
The best radical innovation
projects leave templates behind
and concentrate instead on
finding ways to increase strategic
thinking and stakeholder
commitment.
11

And they make their own timetables.
They do things based on the demands of
the idea, not based on a ponderous
annual planning process. In most cases,
the time and effort required to move a
truly innovative idea through an annual
planning process—especially given the
difficulty of measuring the costs and
returns of such ideas—is enough to kill it.
By the time the funding is approved (if it’s even approved at all)
it’s too late. The moment is gone and your more agile competitors
have had time to gain the upper hand.
12

Innovation is about being first in the market
For innovative products, it’s more important to
be correctly positioned and differentiated than
to arrive on the market first.
True, first movers have an advantage. Their
very existence earns them a higher level of
differentiation, especially when new
technologies are involved.
But arriving first also increases the chance of
weak market adoption. Most innovations fail
due to an inability to drive adoption.
13

The key is to minimize consumer
disruption. The less your new product
requires consumers to disrupt their
habits and adopt new behaviors, the
greater the likelihood of rapid
adoption. The best strategy is to
make the technology as invisible as
possible. And as simple as possible
to use.

Choosing your
innovation playing field
15

Business
model
innovation
Marketing Experience Service
innovation innovation innovation
Application
innovation
Process Product Technological
innovation innovation innovation
16

Business model innovation
Business model innovation is about reframing the
role of the company within the value chain. Re-
defining how the company meets unmet or
unarticulated customer needs.
It might also involve adding a “second bottom
line” to the mix—a focus on social impact
alongside the convention fiscal measures. This is
potentially a powerful dimension of business
model innovation.
17

Experience innovation
Experience innovation is about making
meaningful changes in the product or
adding a service layer that drastically
improves the customer’s experience—
creating delight, greater satisfaction, or
reassurance. It’s often enabled by a
combination of emerging technology and
interface design.
The service design component of experience innovation is different from
creating products in a many important ways:
18

IP management of
innovation
What you need to know and are often ignored.

Two kinds of innovation
Disruptive
– No market or little market exists
– Legal or other changes required to enable adoption
– Early stage innovation, where outcomes
undetermined
Incremental
– Improves an existing product/technology
• Is improvement substantial enough to be
implemented?
– Impact on any existing standards must be examined

What can you do with innovation via IP rights?
• Throw it away
• Give it away free
• Use it to make some money
• Hide it and you may need it later
• Use it to create business relationships

After deciding to make innovation publicly available
What is the best way to have
the sharing make the impact
you want?
– Product model (sales)
– Service model (use it)
– Rights model (licensing)
– Affiliation model (use of brand)

What is IP?
– Copyright – protects expression
• Exclude others from copying, performing, displaying,
creating derivatives, distributing
– Patent – protects idea itself (if new, novel,
nonobvious)
• Exclude others from making, using, selling, offering to sell
etc
– Design Patent- nonfunctional design (icons)
– Trademark – protects the quality of a good or
service
• Prevent confusion of consumer
– Trade secret – protects process, information, etc.
• If kept secret and of economic value

Why does IP matter?
It is the means to allow and control
the relationships which surround the
research, results, and adopters. It is a
way for you to capture value if what
will be generated.

IP rights management
Two stages
– Employment & Obligation sense
• Get rights necessary first, in order to enable strategic
management
– Strategic Management
• What rights are being created?
• Who can & should control the rights?
• What rights are necessary? What rights should be assigned,
versus permission gained?

What are invention rights?
Ownership of a patent generally remains with
the inventor unless she:
– agrees to assign or assigns her inventions to an
employer in writing and that writing is enforceable; or
– is hired or assigned specifically to invent or to
exercise inventive skill
United States v. Dubilier Condenser Corp., 289 U.S. 178, 53 S.Ct. 554, 77
L.Ed. 1114 (1933)
Standard Parts Co. v. Peck, 264 U.S. 52, (1924)
(Exceptions can include CEOs and some senior executives etc.
with fiduciary obligations to the company)

What are invention shop rights?
Where the company’s resources have been
used, the company may have a shop right in the
invention.
A “shop right” is a non-exclusive, largely non-
transferable right to use the invention, free of the
requirement to pay royalties. Shop right can be
viewed as an implied-contract or equitable under
estoppel.

How does invention assignment work?
Requiring assignment of employee's rights to inventions -- Conditions.
(1) A provision in an employment agreement which provides that an
employee shall assign or offer to assign any of the employee's rights
in an invention to the employer does not apply to an invention for
which no equipment, supplies, facilities, or trade secret information
of the employer was used and which was developed entirely on the
employee's own time, unless (a) the invention relates (i) directly to
the business of the employer, or (ii) to the employer's actual or
demonstrably anticipated research or development, or (b) the
invention results from any work performed by the employee for the
employer. Any provision which purports to apply to such an
invention is to that extent against the public policy of this state and is
to that extent void and unenforceable.

How does invention assignment work(cont’d)?
(2) An employer shall not require a provision made void and
unenforceable by subsection (1) of this section as a condition of
employment or continuing employment.
(3) If an employment agreement entered into after September 1, 1979,
contains a provision requiring the employee to assign any of the
employee's rights in any invention to the employer, the employer
must also, at the time the agreement is made, provide a written
notification to the employee that the agreement does not apply to an
invention for which no equipment, supplies, facility, or trade secret
information of the employer was used and which was developed
entirely on the employee's own time, unless (a) the invention relates
(i) directly to the business of the employer, or (ii) to the employer's
actual or demonstrably anticipated research or development, or (b)
the invention results from any work performed by the employee for
the employer.

What are considered trade secrets?
Usually managed via Non-competition agreements:
In many states a non-competition agreement must be:
1) Supported by consideration
Example, in Oregon only a bona fide advancement
or hiring will constitute consideration.
2) Supported by a protectable interest
a. Trade Secrets
b. Customer Relationships
3) Reasonable in duration and geographic scope

What is copyright ownership?
“Work for Hire” = work prepared by an employee
within scope of his or her employment OR
specially ordered or commissioned work (from a
discrete list in Section 101).
If by assignment remember 35 year recapture!

Part 2 of 2.
Idris Mootee
www.mootee.typepad.com
32
Copyright 2007 by Idris Mootee All rights reserved.
Without limiting the right under copyright reserved above, no part of this publication may be reproduced, stored in or introduced
into a retrieval system, or transmitted in any form or any means, without the prior written permission of the author. This book is for
limited circulation only and is not available for sale. A version of this book is available as special order for corporate training and
executive education. To inquire about quantity order with your organization logo printed on the cover and limited customized
content, please contact the author.