“We’ve run out of big ideas,” the Wall Street Journal wails. The voice of Corporate America paints a bleak picture without offering any path forward. In this article, I will provide a simple formula for innovation, market leadership, sales and profits.
The Journal Complains of Complacency
The Wall Street Journal has published a series of stories in its Innovation Series (subscription may be required) as follows:
- We’re Out of Big Ideas;
- Silicon Valley Stumbles in World Beyond Software;
- Big Pharma Outsources Science;
- China Invents Again; and
- Facing Idea Deficit, Companies Splurge on Prizes.
In “Big Ideas,” the Journal shows that today the U.S. has more technically trained people than ever before, with about 4% of the workforce now engaged in science and engineering jobs. Patents are “piling up.” Yet we’re gaining only slowly in productivity.
In its next story, the Journal trots out the accepted wisdom that Silicon Valley, namely, Google, Facebook and Amazon, can do everything imaginable in software, but it notes that real world applications like delivery drones are literally harder to launch. (Hint to the Journal: For hardware solutions, look at companies that make hardware, and you’ll find lots of innovative products that work, along with substantial patent portfolios.)
The Journal goes on, in another story, to explain that Big Pharma is having a hard time inventing new blockbusters, so they’re outsourcing the science to university researchers and small companies that are more nimble and more motivated to invent. But guess what? It’s hard to get agreement on who will own the “rights,” as the Journal says. Patent rights, I might add. That’s what separates a billion dollar brand drug from a generic that will sell 20 years later for 1/20th the price.
Then again, the Journal recognizes that China is inventing and patenting, even while it dismisses “many of these patents” as “virtually worthless.” (Personally, I wouldn’t be so quick to dismiss the Chinese or their patents.)
In its recent article on the “Idea Deficit,” the Journal says there are prizes galore for inventors. Unfortunately, as the Journal admits deep in the story, the prizes aren’t doing much good. Investment of $477 billion a year in U.S. R&D isn’t cutting it, “despite steady growth in new patents.”
The Secret to Spurring Innovation
The Government offers substantial prizes for corporate innovation. They’re called patents, and they fulfill the Constitutional mandate to promote the progress of technology and commerce by granting to the inventor the exclusive rights to the claimed invention for a term of 20 years from the filing date.
A patent on a worthy invention confers market leadership, revenues, and margins. If your company employs engineers or coders to make better products, you’re already well-positioned to innovate for customers and to patent those inventions.
I have seen companies that despair of inventions from their own ranks. Don’t underestimate your own people. They know far more about your industry than you’ll ever find through crowdsourcing. Your engineers and coders may not think of themselves as inventors, but they do invent better products for your customers, and they can do more with the right kinds of encouragement and guidance.
The key, of course, is to fill customers’ needs. This requires that incentives and rewards should be put in place to fill those needs with innovative new, improved products and to get patents to protect the company’s investments.
(If you’re wondering whether patent investments are right for your company, what to patent, why, and when, see my series on the 4 W’s of Patent.)
Leaders from Henry Ford (who demanded and got the V-8) to Steve Jobs have cast visions and molded their workforces to deliver the needed products.
But how are engineers measured and rewarded? They’re paid good salaries and given annual raises for cost of living. But salary compression hurts. There is not a lot of room at the top. Nor is there much reward for rocking the boat. They’re told to fill out mind-numbing invention disclosure forms, which they are asked to painstakingly complete and submit, perhaps never to hear anything back. Meanwhile, the message is, don’t let the current engineering project stall. And what’s in it for them? Just a lot of trouble for nothing.
How are in-house patent attorneys measured and rewarded? If they got X patents last year for Y dollars, this year they should get X-plus-one patents for Y-minus-one dollars. That’s a successful year.
No wonder Big Pharma farms out the science. In smaller companies, everyone has a stake in making innovation succeed, and they’re paid for the successes.
Here’s the secret for your company’s success: Knock yourself out to deliver new improved products to meet customers’ needs. Solve their problems. Provide incentives and rewards for your salespeople and engineers to make that happen. And patent the inventions that you intend to practice for profit.
If you’re serious about putting a real patent incentive program in place, let me know. I’ve trained the Army and other organizations, and I can help your company.