Intellectual assets. Sometimes it's a simple trade-off: companies finance new innovations by selling off old ones. Two years ago, Cygnus sold its drug-delivery business (comprising 43 patents) to a Johnson & Johnson subsidiary to raise money to develop a glucose-monitoring watch. Then there's Angeion Corp., which spent 10 years developing technology for implantable cardiac defibrillators, winning 114 patents in the process. When the company hit a wall trying to compete with industry giants, it sued a competitor for patent infringement -- and then licensed its entire patent portfolio to that same competitor. "The intellectual property wasn't enough for a viable business model," says CEO Rick Jahnke. With the cash from the settlement and the license, Angeion bought a company that makes devices for detecting lung and heart disease. Jahnke is selling the new products not only to Angeion's hospital customers but also to health clubs, where personal trainers can use a modified version to help members assess their fitness levels.
Capturing Ideas: Who? What? Where? Why? When? How?
In the earliest stages of innovation, ideas float freely in the cranial ether. But as every business guru or leader of a pioneering company will tell you, innovation without execution is meaningless. And the first stage of execution is to capture the basic idea in words (and sometimes pictures), tease technical and business nuances from the inventor's mind, and ensure that the whole package reaches the people who will assess its viability. Innovation-disclosure forms -- either paper or on-line -- accomplish all that and more. Ramtron International Corp., a maker of nonvolatile memory chips, uses what it calls a "product-justification form" to capture input, not just from an idea's originator but also from other departments, such as marketing and manufacturing. Among the blanks that Ramtron wants filled in are these:
- What's the application of the product?
- Do we service that segment of the industry?
- Do we have the core competency to make it?
- Do we have the design staff to make it in the right time frame?
- When does it need to be introduced?
- What's the forecast for the revenues it will bring in?
- How much will it cost to make?
- How many man-hours will it take to make?
- What will be the return on investment?
- What will the margins be?
- How will that contribute to our revenue goals?
Innovation without execution is meaningless.
Marketing: Teach Your Potential Customers Well
It's hard enough to create buzz for products that customers know they need. Try selling something that's so far ahead of its time that only a fraction of the potential market sees its value.
That was the problem facing Tessera Technologies Inc., inventor of the chip-scale package, which allows semiconductor companies to keep their products as small as possible. Tessera's licensees weren't focused on packaging, and neither were the licensees' suppliers -- companies that provide the equipment and materials needed to install packages in final products. So Tessera set out to educate everyone in its industry. "The issue became, How do you as a small company bring together all the critical members in your industry to push forward as a de facto standard?" says Chris Pickett, senior vice-president of licensing business and general counsel.
Tessera's answer was a magazine. Having beefed up its marketing department with an ad-sales rep, a designer, and an associate editor, the company launched the 80-page bimonthly Chip Scale Review. The publication, whose advertisers were the very suppliers that Tessera wanted to bring into the fold, used single-theme issues to elucidate problems its technology could solve.
With a paltry ad-to-edit ratio of 30 to 70, Chip Scale Review lost money for most of the two years it remained in-house. Tessera turned it over to a professional publisher when company managers felt that the industry was mature. For similar reasons Tessera sold its conference, Chip Scale International. The event had attracted several thousand paying attendees and exhibitors. But like the magazine, it was designed to create a market rather than profits. And both ventures, in the company's judgment, have succeeded. "The Chip Scale Review is read by everyone in the industry," says CEO Bruce McWilliams.
Products: Seeing It Fresh
Companies can't rely on divine inspiration for eureka-grade ideas. Rather they must encourage staff to see established products as a source of infinite possibilities.
The original idea: NCT Group had a system that sent the mirror images of sound waves through ceramic tiles to cancel out noise.
The insight: An engineer wondered what would happen if he sent music instead of "anti-noise" through the tiles. He hooked up a radio to the unit, and out came the sound of the Beatles.
The innovation: Realizing it could produce high-quality audio using flat panels like the tiles, NCT created two-inch-thick wall-mounted speakers for the consumer market.
The original idea: Cygnus Inc. had developed patches that deliver drugs through the skin.
The insight: While taking apart a patch, a researcher realized that not only did it deliver substances through the skin, but it could also extract material from inside the body.
The innovation: Cygnus used the discovery to create a line of watchlike devices that monitor diabetics' glucose levels.
The original idea: Foster-Miller Inc. had a technology for putting tiny rods through certain composites to prevent them from delaminating.
The insight: Engineers noticed that aircraft manufacturers were pushing plastic pin mats into jet-engine parts to make tiny holes for deadening sound. But pins were left behind in the holes.
The innovation: Foster-Miller adopted its technology to ensure that engine pins came away when the mats were removed. Savings resulted.
