Wednesday 31 March 2010

Can There Be Too Much IP Within the Organization?

How much IP awareness should there be in a company? It is all the rage these days to argue in favor of IP empowerment, whereby the goal is spread IP awareness throughout the organization. But is this vision of IP penetration as desirable as it might seem at first glance? Consider the following two examples.

In an article entitled "Understanding and Unifying Diverse IP Strategies", which appeared in the January/February 2009 issue of Intellectual Asset Management, John Cronin and Paul DiGiammarino argue that proper IP strategy is based on "extracting the definition of each stakeholder's IP strategy", as opposed to simply deciding "what inventions to file as patents and in what countries to file them." The endgame is to develop and overarching IP strategy. And who are these stakeholders? The authors list the following: (i) patent counsel; (ii) engineers and inventors: (iii) product and technical managers; (iv) executive management: (v) business development; (vi) commercialization and marketing; and (vii) CTO.

More recently, Mark Blaxill and Ralph Eckardt argued in their article, "Putting the IAM Function at the Heart of Corporate Strategy," published in the July/August 2009 issue of Intellectual Asset Management (to be read in tandem with their 2009 book, The Invisible Edge: Taking Your Strategy to the Next Level Using Intellectual Property), that "IP has become the principle source of competitive advantage." And what is the mechanism for realizing this strategy? The author explain that the goal is to "break out of IP's organizational silo ... IP executives must push for deeper integration of IP management into the business, where it can have its greatest and strategic impact."

The common thread of these two articles is that IP management needs to be released from the organization's patent department, whereby everyone with a material interest in IP within the company will presumably have some influence over the company's IP policy. The problem is this: the persons most likely to "benefit" from this view may in fact be skeptical about its efficacy. My MBA students tend to be culled from middle management across a range of departments and are overwhelmingly employed in hi-tech companies.One would think that this would be an ideal cohort to embrace the view that IP should be the province of multiple stakeholders within their companies. However, their reaction to these proposals was largely one of skepticism.

There appear to be two reasons for this skepticism. The first was a sense that these authors have overstated the importance of IP (at least in most of their companies). That is not to say that they do not recognize the potential importance of IP, but rather to say that, having regard to the multiple managerial requirements that they face, overstating the centrality of IP is no more helpful than understating it.

The second was a feeling that the authors have confused IP strategy with IP awareness. Not every department within a company is, nor should be engaged, in fashioning or implementing IP strategy. For some departments IP may be more important; for others, less so. While consideration of the role of IP within a given corporate department is not the same thing as consideration of IP strategy, the company is organized for strategy and IP is a part of that overarching organizational structure, not some stand-alone body of information and decisions.

What the students wanted, and what is missing in these two articles, is not strategic empowerment, but rather a heightened awareness of what IP is, and how it may be expressed in their daily activities. Stated otherwise, both articles seem to take as a given exactly what students view as a form of unknown, namely a greater understanding of IP with the larger commercial and managerial context. Unfortunately, how this appreciation of IP is spread throughout the organization remains largely untouched, not just in the two articles but most of the managerial literature. That is a pity, because it is here that IP can have the greatest impact throughout an organization.

IP at the Corporate Periphery?


Unknown said...

My sense of part of the problem you relate is the typical collapsing of ALL intangible assets within the rubric of IP. Intangible assets most likely permeate all (or almost all) aspects of an organization. However, IP--which is a subset of intangible assets--is not always relevant to all aspects, as you relate.

Neil Wilkof said...


Thanks for the observation, with which I concur. That then leaves us with how to deal intangible assets that are bereft of IP protection, which is what you do so well in your blog.

John Cronin said...

As one of the authors , I would say on the first point, that the need for IP is not really overstated, because we mean IP to mean patents, publications, trade secrets, know how, people. I hope most readers understand this. This would be over stated if it was just about patents.

On the second point, we never say that every department and organization needs and IP strategy, we simple mean that the IP Strategists checks in to see the level of their need to use, if necessary in the IP strategy. We have done hundreds of strategies and found this to be crucial.

Finally, IP Awareness is an interesting issue. Awareness by itself is an interesting topic, how do you become aware you need something. You will find, that awareness in all new things comes thru exposure to the problems or opportunities, which for us, the IP Strategy does. Its a chicken and egg I know, but the IP strategy process we talk about uses existing awareness but then creates many new awarenesses on IP. That is why most companies opt to do IP strategy, to figure out where they need to become more aware.

I appreciate the thoughtfulness of the review!

Nick White said...

An interesting take on these two publications Neil and interesting comments about your MBA cohort experience. It is a little alarming that your MBA cohort is so sceptical about the “relative” significance of IP in their companies. As you say they would, on the face of it, appear to be ideal supporters of the concept, recognising that IP is a core business issue. For technology businesses it is incredible they seem to think that the case for IP is overstated. If you hold any stock in your MBA students companies....sell! I think that this is probably more a reflection on the nature of MBA candidates these days and what drives the MBA programme generally. I read an interesting article recently that suggested that MBA programmes need to move away from “preparing” managers of businesses and moving more towards developing skills and expertise in people management and strategic thinking to enhance intellectual assets and IP within a business now that we are in the knowledge economy. IP is just too intangible for the number crunchers. You see the same view in the investment community (heavily populated with MBAs!).

I think that today IP is where TQM was a few years ago. Everybody in the company gets it but the management don’t think it’s anything to do with them (they have a business to run) and no-one in the company knows how to implement it. It takes effort and an evergreen commitment to bear fruit, which is also a barrier.

We have IP Strategy and we have IP awareness (IP awareness usually falls into the camp of knowing what a patent is as opposed to being aware of its relevance to the business). Both of these areas are vitally important in my view but what we don’t have as you point out is the knowledge and skills within companies as to how both should be implemented. It is the IP implementation strategies that count. We have a lot of strategic IP consultants around (funny enough a lot of MBAs there too!) who get companies all fired up about their IP strategies and then leave them holding the baby. It’s one thing knowing that you have to get from A to B (that’s the easy bit and textbook) and a very different thing to work out how to get from A to B. The problem as I see it is a lack of IP strategy implementation vision and expertise within management cohorts.

Anonymous said...

"We have a lot of strategic IP consultants around (funny enough a lot of MBAs there too!) who get companies all fired up about their IP strategies and then leave them holding the baby."

I think that is a key issue Nick. It's one thing knowing in a company that you should be aware of IP, another knowing how that awareness needs to fit in with everyday operations. I think we need more comprehensive management tools and training that make it easy to see, document and manage relevant IP. Unfortunately, so far I am not aware of any such tools.

Mary Adams said...

Neil -

I can recall conversations where even you and I have gotten caught by the semantics of IP versus IC. Thanks to conversations with you and others, I now adhere to definitions as follows:

Intellectual or intangible capital (IC) as representing all intangibles. IP is the subset of IC that is defined and specifically protected by the law. "Intangible assets" are the subset of IC that are recognized by accountants.

When folks wish for greater attention to IP, they should be cognizant of these definitions. My bias is that the best way to pay attention to IC/IP/IA is to start with the broadest definition of IC and then speak about how these assets fit into a company's strategy, how they can be protected, and how to generate information about them (because the accountants haven't figure out how to do this).