Steve Franks – Innovation and Entrepreneurship

Whether you use the 4-step IP management process just described or not, there are 4 kinds of intellectual property that you can produce and manage.  In other words, there are 4 types of knowledge about any product, service, strategy, or industry.

1. Knowledge of what stakeholders value
2. Knowledge of the key issues you face
3. Knowledge of solutions to individual issues
4. Knowledge of complete product, service, or strategy concepts

You can, and should, formally manage EACH type of intellectual property.  Here’s why …

What Stakeholders Value - If you know more than your competitors about what stakeholders value, you can create value-driven solutions that competitors can’t.

Key Issues - If you know where your products lag the most compared to competitors, you can focus on creating solutions that will provide big value gains.  If you know the issues the entire industry faces, you can create value-based innovation.

Solutions to Individual Issues – If you create multiple solutions to individual challenges or issues, you build a library or inventory of building blocks that can be used to build (or inspire) future product concepts.

Product Concepts – If you build multiple iterations of product concepts, focusing each new iteration on improving the areas where value lags the most, you grow product value quickly.  If you test multiple product concepts with consumers, you build a much greater understanding of stakeholder value and key issues.

OK, I admit that I made this last step sound easier than it really is.  It is NOT as simple as merely selecting some idea and then deploying it.  You actually will be selecting one or more ideas, refining them, validating them with real customers, refining them some more, validation them again, refining them some more – and so on.

First, selecting the product concepts to start with is fairly simple.  Just go back to the set of value drivers and key issues that you established in steps 1 and 2 – and score each product concept – as objectively as you can.  Unless one far outscores all of the rest, select the top 2 to 3 for further exploration.

Second, review the details of each product’s score.  Find the individual value drivers or issues where each one scored lowest – and the features that are causing the low scores.  Then focus some ideation and design activity on improving those features.  Do at least three iterations of improvement.

Third, find the value drives or issues where each one scored highest – and the features causing the high scores.  Then focus your brainstorming and design activity on how to migrate those features to the other product concepts.

Fourth, when you are confident that you have improved the product concepts about as much as you can, start testing them with customers.  Ask customers to either use the product (if  you have a functional prototype) or simulate use.

• Have them try routine everyday use scenarios – and then get their feedback.
• Ask them to score the product concept according to the value drivers and issues you’ve already scored.

In other words, find out whether you were thinking like your customers during your design work.

Take that feedback and once again focus your ideation and design activity on the features that need the most improvement – and on proliferating the features that are clearly exceptional.  After at least three cycles, you should be set with a clear launchable design that you can complete and take to market.

Note:  throughout this process you will create (and should record) two types of intellectual property.

1. New and better understanding of value drivers and issues.
2. New and better (and sometimes patentable)  feature solutions for those drives and issues.

This step comes third because it does little good to invent product solutions until you know 1) what drives value and 2) the major issues your product faces relative to producing value.  That focuses your ideation and intellectual property creation on that which can bring your stakeholders (and you) the most value.

The method that I have used that has been most effective is to:

1. Brainstorm or ideate solutions to the issues you’ve identified.
2. Use those as input to ideate multiple entire new product concepts.

Assemble a diverse group of 8 to 15 people from within your company (your design team, engineers, marketing people, industrial designers, graphic designers, operations people, service people, etc.).

Pick the top 12 to 15 issues to address.  Write a brainstorming question that asks the participants to create tangible solutions to the issue – as many as they can.  Don’t circulate the questions ahead of time.

Go off site.  Better to ideate in an environment without the daily interruptions.  You’ll need 2 to 3 days to do the project justice.

After an introductory presentation and discussion of the value drivers you discovered in step 1 and the issues you identified in step 2, you can start brainstorming.  I suggest using nominal group process (everyone privately writes or draws solutions, and then the facilitator leads a discussion of each person’s ideas one by one).  The discussion should be brief, fast paced, and follow traditional brainstorming rules.  I like posting the ideas on the wall (use Post-It Notes, 3-M Post-It easel pads, and 3-M Post-It correction tape).

You will create a lot more ideas for each issue than you can use.  Some will be clearly unworkable or even silly (if not, your brainstorming is too tightly controlled).  Some will be good ideas, but not right for the product you are designing – keep those for future use in other projects.  Some will be candidates for use in this project.

You may want to identify the ideas that the group feels are best.  I learned to do this by asking the participants to vote for their favorite ideas with colored sticky dots.  This method lets everyone see the group consensus and re-familiarize themselves with all of the ideas.

Finally, ask each participant to create their own complete product concept, using any of the ideas presented as well as any new ones they have.  For the best results, ask them to present their concepts.  Record video because they will say things about their concept that they don’t write down or draw.

Voila!  You now have multiple new product concepts that should reflect solutions that add value to the issues you wanted to address.  Cool!

Two parting thoughts.

1. In this step you have created two different kinds of intellectual property – keep it, record it, and determine if it is worthy of patent protection.  The first type is answers to the individual issues that your face.  You should have LOTS of potential solutions that are not laughable.  The second type is complete product concepts.  In the next step, you’ll select the best to develop and deploy.  Keep, record, and evaluate the rest.  Just because they weren’t selected doesn’t mean they are not valuable.
2. Someone is likely to suggest that your company can’t afford to send that many people off site for that long.  Here’s why that is false.  The value you create in your products sets the stage for corporate success – or failure.  Those busy people won’t have those busy jobs for long unless your company delivers valuable products.

Next:  Selecting and Deploying the Best Solutions

“Managing” intellectual property means proactively creating value.  The collection of facts you generated in Step 1 will include a number of gems – opportunities for you to create BIG value.  These are the issues upon which you should focus your innovation.

You probably already identified some while doing your data collection.  It is common to have some Aha! moments (and I hope you noted your Aha! when it occurred – if not you’ll do it during subsequent projects).  To find more issues, try these three exercises.

First, look for the opportunities specific to your product, service, or process.

• Evaluate how well your product performs for each of the stakeholder actions for which you’ve compiled a description of value.  Where does your product underperform?  That’s low hanging fruit for innovation.
• What are the biggest gripes about your product?  These are clear opportunities.
• What are the stakeholder actions that are the clumsiest, based on what stakeholders say?  Fix them and you add value.

Second, look at the market or industry.

• What are the obvious market trends that you can take advantage of?  More low hanging fruit.
• What are the challenges in your market that everyone has given up on?  Every market or industry has some “holy grail” that all competitors have stopped chasing because they believe it is impossible.  Don’t buy into the negative hype – these are great opportunities for innovative thinking to create huge value.
• What directions are the major competitors moving?  Maybe you can move swiftly and get there first.  Maybe you can flank them.  Maybe you can leapfrog them.  Maybe it’s the wrong direction (based upon what your study of value has shown).
• What directions are the new upstart companies moving?  Are they hitting the value points your study identified?  How will that affect the market?  What will the major competitors do?

Third, look outside your market and industry.

• What are the best companies (no matter the industry or market) doing that is noteworthy?  Maybe you can adopt or adapt that.
• What are the new inventions in other fields that may remotely touch your field?  Maybe you can adopt or adapt them.
• What industry or market best fulfills some of the “holy grails”or unfulfilled value points in your industry?  Adopt or adapt.

You now have not only a collection of facts about value in your industry, but you have an identified list of the issues that can be most valuable for you to address.

Next: Inventing Potential Solutions

For intellectual property to possess value, it must provide value for a company’s products, services, or processes – and they only generate value when they come into contact with people.  So, we first have to answer two questions.

1. Who are the people who will touch the product, service, or process?
2. What do they value?

Understanding value across your various stakeholder groups is where your intellectual property management system should start.  The general framework is simple enough: for each group of people that touch any particular product, service, or process, study and record what people value.

• Internal departments
• Key suppliers
• Customer segments
• Distribution channel
• Service entities
• Other partners or collaborators

How?  One on one interviews, observations, focus groups, customer service feedback, and so forth.  Ask about problems, ask about dreams, ask what they like, ask what they don’t like.  Have them describe a day with the product, have them demonstrate it to you, have them walk you through different things they do with the product.  Listen to gripes.  Ask why.  Ask for an explanation.  Don’t leave until you understand you understand how they work with and feel about the product.

The more stakeholder groups from which you learn and the more in depth you learn from each group, the more complete your knowledge.  Take good notes – this is the start of your intellectual property collection.

To organize this collection of facts, break all of the thoughts from those interviews, observations, and other feedback apart – and then categorize the individual thoughts.  One useful way to do this is to sort the comments by the action being performed.  So, for example, you end up with all of the retail merchandising comments together, all of the user interface comments together, all of the repair comments together, etc.

Congratulations.  You now have an organized collection of facts about what people value about your product, service, or process.

Next:  Identifying the Issues

In a soon-to-be-published book, The Visible Business, Chris Pelz and I present a framework for how to develop a business strategy that has a direct line of sight from the facts surrounding the business, through the issues that the business faces, to the potential solutions for those issues, and finally to the selected and deployed strategy(ies).

The intellectual property management framework that I recommend,  Visible Intellectual Property Management, will generally follow those same principles.

1. Learn the Facts
2. Identify the Issues
3. Invent Potential Solutions
4. Select and Deploy the Best Solutions

The framework takes some inspiration from discussions I’ve had with a good friend, Jim Bradley, an inventor, problem solver, thinker, and multiple patent contributor who is retired from Navistar.  Over the past couple of years we have met for lunch periodically to talk about our common interest in innovation.  It was through those discussions that I discovered that innovation is just one subset of a larger system – intellectual property management.

The framework also owes a big debt of inspiration to Ron Sears of the Design Consortium.  I worked together with Ron for a few years and, like an apprentice, learned his Product Value Matrix (PVM)^sm product development and innovation methodology.  Ron lives and breathes value creation, and his PVM process is the best process I know for producing innovation on demand.  Although I cannot borrow wholesale sections of PVM – a proprietary process – and present them to you,  I will sometimes direct you to the website pvmspec.com, where you can read about PVM in detail.  By the way, ”Product Value Matrix” and “PVM” are service marks of the Design Consortium.

Many intellectual property management systems start at the point where a patent disclosure is made.  I now think that the point of invention is far too late to start managing your intellectual property.  It is at least as important, if not more important, to first understand the value system of your products, services, and processes before you start to invent.

Many companies would claim that the front end of understanding the value system is the responsibility and domain of a marketing department, while the back end of pursuing patent applications is an entirely separate process that is the responsibility of an intellectual property or legal department.  As you read my subsequent posts, you will see that I believe they are both part of the same process, and should not be treated separately.

Next: Learning the Facts

If you read yesterday’s post, you may have gone away thinking that I just bash patents 100% of the time.  Not true.  My position is that for the bootstrapped small entrepreneur who is implementing a clever, but probably not novel, business concept, a patent may not be in order.

But, I fully understand that some companies actively manage intellectual property portfolios in order to gain or maintain strategic advantage.  And they have hundreds of thousands of dollars, if not millions, to spend on management.  For these companies, I will be explaining in future innovation posts how they can adopt a broader and more valuable system of IP management.

Intellectual property management often starts at the point of a disclosure.  An employee invents or designs something that has merit to be novel and patentable.  The company determines if the cost of prosecuting a patent application is warranted (is the invention strategic, is it indeed novel, is there prior art, how much will it gain the company versus cost the company?).  Patent applications are filed, extensions are filed, variations are created, patents received are defended, etc.  The company owns a comfy bundle of strategic IP.

In a nutshell, I will be outlining a front end system that integrates with these current systems – an expanded view of what “intellectual property” is.  The system does two things:

1. Provides and captures a strong market-based understanding of customer and stakeholder value.  The idea here is that if your company understands customers and stakeholders better than the competition, you are in a much better position.
2. That greater understanding provides you the fodder to brainstorm  and innovate solutions that your competitors can’t envision. So, instead of waiting for some random event to produce a disclosure, and then hope that it is strategic and valuable, you create your own.  Inventions, that because they were borne of a deep understanding of value, are much more likely to be valuable parts of your IP portfolio.

No patent bashing, I promise.