We study and do research on why firms succeed in competition. As such, we believe our findings are not only relevant to fellow academics, but to practising mangers, too. On this page, we have put together a compilation of our managerial writings – featured in Harvard Business Review, MIT Sloan Management Review, McKinsey Quarterly, and Business Strategy Review – for real-world decision-makers: brief, to the point, results- and implication focused only.

Managing the Business Risks of ‘Open’ Innovation

(with Alexy, O.) McKinsey Quarterly, Winter 2012, 17-21.

Several years ago, something interesting happened in the infrastructure software sector: IBM and a number of other companies pledged some of their own patents to the public to create IP-free zones in parts of the value chain. They did so when a 2004 report showed that Linux, the open-source operating system that had emerged as a viable, low-cost alternative to established operating systems, such as Microsoft Windows and Unix, was inadvertently infringing on more than 250  patents.1 By voluntarily pledging not to enforce hundreds of IBM’s own patents so long as users of the IP were pursuing only opensource purposes, the company led the creation of an alliance of patent holders dependent on (and willing to defend) open-source software against lawsuits. One result: IBM substantially increased the share of its new products based on Linux.

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Smart Idea Selection – Is Your Company Choosing the Best Innovation Ideas?

Sloan Management Review, Summer 2011, 47-52. [FT45]

Managers who are new to the field of corporate innovation will quickly find that there is no dearth of advice or resources on how to turn corporations into fountains of creative ideas. Books and journals abound with techniques for helping employees overcome old mental models and “think outside of the box.” The goal of these approaches is to generate vast numbers of unconventional ideas to improve the existing business or uncover new opportunities. However, as veteran leaders of innovation campaigns know, the problem for most large organizations usually isn’t a shortage of ideas. The real challenge is figuring out how to ferret out the good ones.

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Patently (Un)Clear

(with Wagner, S.) Business Strategy Review, Spring 2010, 28-33.

Most managers know that innovation is crucial to their firms’ success. And most also know that not all of the innovation related activities relevant to their firms need to be carried out in-house. In fact, recent research shows that firms are well advised to outsource parts of their R&D process and generate synergies between in-house and external technological knowledge. When deciding what to make and what to buy, however, only a few managers seem to remember that innovation is not just about value creation – through R&D – but also about value capture, notably through patenting. Yet, as of today, little, if any, textbook wisdom tells managers how to structure these value-capturing activities within and across the boundaries of their firms. Given the costliness of this expertise, the exploding number of property rights being issued worldwide and the increasing number of patents per R&D dollars spent, technology managers need answers to the following pressing questions: Should I employ in-house patent lawyers to ensure that my R&D is properly protected, or should I outsource these services to external law firms? What may be the long-term consequences or hidden costs of outsourcing legal intellectual property (IP) services? Can I minimize hidden outsourcing costs and benefit from external law firm expertise at the same time?

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Big Picture – Patent Sharks

(with Henkel, J.) Harvard Business Review, June 2008, 129-133. [FT45]

Companies that focus heavily on research and development generally have more value tied up in intangible assets—patents and other intellectual property—than they do in material assets. Different sectors take very different approaches to managing those resources. Pharmaceutical companies, for example, play hardball—they’ll do anything to protect a key patent. That’s not so surprising when you consider that a single patent can sometimes safeguard an entire product. Technology companies, however, have to cooperate with one another because a complex product can incorporate several thousand patents, many of which are held by other organizations. The patents, therefore, become a form of currency exchanged among them.

Recently, though, technology companies have been attacked by patent sharks, firms with hidden intellectual property that surface, threatening to sue, when their rights are inadvertently infringed. Most of the time, the assault comes out of the blue from an unknown source, and enterprises usually aren’t able to identify their opponent until it is too late for them to react. What’s more, their traditional line of defense, designed for taking on visible competitors, is completely unsuited for this type of guerrilla warfare.

To avoid shark attacks, companies will have to go beyond relying on legal remedies. They’ll also need to move away from amassing huge patent portfolios for cross-licensing with competitors; develop smarter, simpler standards and design more-modular components; cooperate earlier with competitors; make sure that functional groups within and among firms share information about shark attacks; and abandon the practice of filing for patents on ever smaller, less significant inventions. In other words, they’re going to have to turn their R&D processes inside out.

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How Executives Can Enhance IP Strategy and Performance

Sloan Management Review, Fall 2007, 37-43. [FT45]

Five to 10 years ago, the strategic management of codified intellectual property rights — that is, patents, trademarks, copyrights and designs — was still a relatively exotic topic. More recently, the subject has received considerable attention in the business literature. Empirically speaking, however, we still know very little about the importance companies place on IP as a component of business and corporate strategy. Although business-unit managers surely find frameworks that align business strategy with IP helpful, and though top corporate executives are inspired by anecdotal evidence of selected colleagues’ commitment to patents, these executives also need more data on several important topics relating IP to company strategy.

To properly assess their competitive situation, these decision makers must first know:

What does the competitive landscape with respect to IP rights look like? In addition to responsibly implementing IP strategy, managers should know:

• What are proven, successful strategies for using intellectual property at the corporate and business-unit level? What is the role of the executive committee and the board in IP strategy?

• What organizational structures support IP-related strategies the most? What pitfalls need to be avoided?

• How do successful organizations manage the “dos and don’ts” of working with intellectual property, both at the business-unit and the corporate level?

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Strategic Management of Intellectual Property

Sloan Management ReviewSpring 2004, 35-40. [FT45]

In recent years, the primary locus of value for many corporations has been found in their intellectual property rights. By one informed estimate from the late 1990s, some three-quarters of the Fortune 100’s total market capitalization was represented by intangible assets, such as patents, copyrights and trademarks. In this environment, IP management cannot be left to technology managers or corporate legal staff alone. Given that the generation of returns from IP rights is a capital-intensive, long-term activity and that decisions affecting intellectual property are usually irreversible at low cost, IP management must be a matter of concern for functional and business-unit leaders as well as a corporation’s most senior officers.

Little of the writing on the subject of intellectual property rights, however, has been directed at top-level executives; instead it has frequently been done by specialists, for specialists. And senior managers, in order to effectively govern and exploit their often huge IP assets, need help to answer these specific questions: How can the company use intellectual property rights to gain and sustain competitive advantage? How do IP rights affect the industry’s structure? What options do IP rights offer vis-à-vis competitors? How can IP rights grant incumbency advantage and establish barriers to entry? How can IP rights help the company gain vertical power along the value chain? What organizational design accommodates an intellectual property strategy most effectively?

Enormous knowledge is hidden in the economics literature and in the heads of corporate IP managers about the way companies have developed answers to these questions. Making such information available to top-level management will help lead intellectual property rights out of their shadowy existence in patent and legal departments and enable companies to tap into their strategic value.

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