CEO Innovation Playbook Public Short Version Part Two

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.

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CEO Innovation Playbook Public Short Version Part Two

by Idris Mootee on Nov 10, 2007

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CEO Innovation Playbook Public Short Version Part Two — Presentation Transcript