When I attended the XXVI ISPIM Innovation Conference in Budapest, Hungary two months ago, I participated in an interesting workshop titled “Constructing the Open Innovation Manager: Renaissance 2.0”. In an earlier article in this column four weeks ago, I already laid out the wide knowledge and skills repertoire that an open innovation manager needs to master in order to live up to the challenging demands of this important managerial position. Today, I want to drill down on one area within the knowledge and skills repertoire of an “open innovation manager 2.0”: the ability to effectively deal with intellectual property (IP) and specialized knowledge residing within and outside of the organization. Thereby, ask six questions to better understand what real IP and proprietary knowhow your organization has, lacks and trails behind.

1. What do we know that everyone in our industry or category knows? Any knowledge falling into this category is commonplace. It’s the technological, intellectual and/or procedural staple food of your industry. A few years ago, some of this knowledge might have been your proprietary knowledge that used to set you apart from others. Realize that nowadays it doesn’t anymore, and won’t do so in future. So what to do? Keep on using the useful parts of the common knowledge like all the other players in the market do. Just like you expect certain dishes on the menu of a certain restaurant, your customers are likely to expect a set of standard products and services that everyone is offering. However, realize that common knowledge won’t set you apart from all the other players in your industry.
2. What do we know that no one else knows that we don’t want to share with anyone else? Most outstanding restaurants have a “signature dish” and related “secret recipe” that set them apart from other dining places and makes their loyal patrons come back for more. Likewise, the question above helps you to take stock of your privileged proprietary knowledge and IP that makes your company stand out. Protect this privileged IP and know-how at all cost. It is the source of your company’s current and at least short- to medium-term competitive advantage over other players in your industry or category. It’s the foundation that allows you to create and launch proprietary products, services and solutions that make meaning to the market and your target customers. Famous examples of secret proprietary knowledge that have been well-kept under wraps are Coca-Cola’s secret formula or the algorithm behind Google’s search engine.
3. What do other players in our industry or category know that they don’t want to share with anyone else? Don’t celebrate only your own privileged knowledge, but also acknowledge the “signature dishes” and “secret recipes” of “other famous restaurants in your town”. Clearly spell out what IP and proprietary knowledge constitutes a key competitive advantage of your main peers in your industry or category. Then, ask for each identified knowledge gap: How might we quickly develop this proprietary knowledge ourselves through Research and Development (R&D) activities or own innovation initiatives? What other legal and ethical ways could we take to close each gap where we trail behind?
4. What do we know that others may want to know — and we don’t mind to share? Many organizations have acquired or developed knowledge that is still proprietary but non-essential for their core business. Just like a maitre de cuisine may not mind sharing know-how on how to more successfully run and operate a restaurant (while on the other hand carefully keeping an eye that his most famous recipes remain secret), your company may choose to either give such inside-out type of knowledge away for free, or trade it with someone who doesn’t mind to share their non-critical knowledge, or sell it to an outside party who is really interested to acquire this knowledge. As such, our fourth question may allow your company to turn proprietary knowledge that is non-essential for your business into a new revenue source.
5. What may others know that we would like to know — and they don’t mind to share? When we flip question four around, we look for opportunities to quickly gain access to and benefit from proprietary know-how of others that is non-essential for them. We take an outside-in perspective to identify potential partners who may be open to sell, trade or maybe even freely share such areas of proprietary knowledge that are non-essential to them but essential know-how to us.
6. What does no one in our industry or category know that everyone would want to know? The sixth and final question enables you to explore opportunities for major R&D initiatives and focused innovation projects to pull off “the next big thing”, i.e., a game-changing radical innovation or new technology that will take your industry to the next level and reshuffle its market shares. Take a look into the emerging future and probe for unknowns related to emerging technologies, trends and social phenomena: What are the big unknowns that everyone is curious about? What are unknown territories that no one has dared to travel to so far? What are the latest secrets yet to be unveiled to take our industry or category to the next level?

Conclusion: Open innovation managers 2.0 need to play on the full action spectrum to monetize the IP and knowledge portfolio of their companies by creating, protecting, acquiring, releasing, trading, selling, and transmuting their firm’s IP and proprietary knowledge. Thereby, we may classify the flow of IP and proprietary knowledge as either locked inside, released outside, traded inside-out or sourced outside-in. Whatever approaches you may take, heed to the advice of Jonas Ridderstråle and Kjell Nordström in their book Funky Business: “All modern companies compete on knowledge, but knowledge is perishable. We must treat it like milk – we have to date it. Unless we use the knowledge of our firm, it becomes sour and loses its value. Continuous innovation, both revolutionary and evolutionary, is a necessity.”

© Dr. Detlef Reis 2015. This article was published in parallel in the Bangkok Post under the same title on 20 August 2015.