Despite all the dire circumstances brought about by the economic recession, there is a bright side. With their attention focused on the here and now, many competitors have taken their eyes off the future; innovation is the key to jumping ahead of those competitors. It’s a time of opportunity to encourage your employees to come up with new ideas and intellectual property to re-energize the business and stimulate the economy. While some might want to hide and ride out the recession, now is the time to think ahead and innovate.
“The heart of innovation is with entrepreneurs; they’re amazing people,” says Rick Walker, an attorney with Baker, Donelson, Bearman, Caldwell & Berkowitz PC. “They have a risk-taking mentality and are willing to think outside the box. There’s a certain spirit that lives in them and that comes to the surface in troubled times like these.”
Smart Business spoke with Walker about how to develop an innovation strategy, how to encourage innovation among employees, common problems you can run into and how to be proactive.
What is an innovation strategy and how can you develop one?
It depends upon the company, because one size does not fit all. An innovation strategy is broader and, in addition to the expected outline of the company’s commitment, can cover such things as funding — how much money the company is willing to invest in the project and the speed at which it wants to invest. It can also focus on harvesting intellectual property the company already has to generate licensing or royalty income. Sometimes there’s a lot of money sitting on a shelf that a company can harvest.
You also have to look at research and development and commercialization. You can come up with great ideas, but what’s the next step? Once you have it, are you going to devote the company’s money and time to commercializing it?
How can you encourage innovation among employees?
■ Use brainstorming methods with an experienced facilitator. Start with an assessment of what you’ve done in the past and where you are in terms of innovation. One technique is to give employees a notepad and have them spend five minutes coming up with as many ideas as they can. Place the ideas in categories, display them on a wall, and determine which ideas are good and will actually work.
■ Give employees permission to innovate — a time, place, environment, break from other duties, etc. You need them to be free of their day-to-day activities for a short period of time.
■ Place them in a more relaxed environment, maybe even somewhere off-site, where they will be allowed to innovate, think outside the box and work with a facilitator on techniques.
■ Don’t react negatively to any ideas brought up, and maybe even ask for ideas anonymously. Every idea and thought counts, so don’t penalize someone, because it may lead to the next best idea. It should be a free flow of information. The first idea may not be good, but it may be enough to get someone thinking of a great idea the third or fourth time.
■ Recognize and reward employees for their innovations. There should at least be acknowledgement, and then beyond that, whatever you believe is proper for compensation. For some, it’s simply recognition, such as in a company newsletter, but some companies have inventor awards.
What are some common pitfalls in the innovation process?
Part of this is accentuated in an economic slump, because people don’t want to spend the money on patents. If you put off protecting patentable ideas, you can lose significant rights if you don’t file. It’s best to keep your idea totally confidential until you talk to an attorney and get those ideas protected in some way.
Don’t wait on these things, and move quickly because once things go public, your options are limited. It’s like toothpaste — it can’t be put back in a tube once it comes out. Clocks are running and competitors see what you’re doing. In some way, they may respect your work, but they also may use it as a brainstorm for themselves to spin off other ideas. If you’ve got a great idea, be there in the market first and protect it. Also be aware that your competitors may imitate you. This may or may not be flattering and may even be legally actionable.
How can you be proactive with innovation?
■ Develop an IP strategy, similar to a business plan, and get your board of directors to buy in to it. This should be specific about your traditional forms of protection, such as patents, trademarks, copyrights and trade secrets.
■ Perform an audit of what you have and what you need.
■ Keep good records (both electronic and paper, where appropriate), including invention disclosures, trademark use, copyright development, etc.
■ Use employee agreements to protect your confidential information. Have your employees agree to assign their inventions to the company. Also, respect the confidential information of others. You don’t want your employees disclosing things that they should not.
■ Be smart with noncompete and nonsolicitation agreements so that you’re protecting the company’s confidential
Rick Walker is an attorney with Baker, Donelson, Bearman, Caldwell & Berkowitz PC. Reach him at [email protected] or (404) 223-2209.