Brad Barbera On What Patent Reform Means For Product Development
Patent Reform approaches, actually, it is already here given that some of the provisions are already in place, and product development managers need to be thinking about its consequences. That’s why I chose to reach out to Brad Barbera, who is the Executive Director of the Product Development and Management Association, he has been in his current role at the PDMA for about 9 months, but has a 15 year background with the association and over twenty years in the field of product development. Brad and I recently chatted about the issue of Patent Reform and product development.
First, however, Brad had a disclaimer: “I am not a lawyer, we do not have a staff PDMA IP lawyer, and I have not sought specific advice in this area. Everything is based on what I’ve read, and my own personal speculation.”
John: What steps has your association taken to prepare product development members for the America Invents Act?
Brad: We are trying to understand the act; I’m contacting IP lawyers, planning on webinars and in-person presentations at both the international and local levels. But I see that there’s an 18 month window here, where there’s a lot to still be settled, as not all the rules are written. So here at the PDMA we are interested in understanding the implications and helping our members operate effectively in the new system. My biggest single concern is that the rules are going to get in the way of innovation, more than they are going to help.
History of R&D Outsourcing
When was R&D First Outsourced?
Outsourcing of R&D began on a small scale prior to the 1970s and 1980s. There are examples of R&D outsourcing dating back as far as the 1500’s with Italian Renaissance artist Michelangelo, who set up a network of specific suppliers to provide the materials and skills he needed to create his work.
More recently, the 1930’s saw companies in the United States were contracted to conduct R&D on the government’s behalf. During that same decade, the largest American and European firms performed 7% of their R&D functions abroad. This number has been steadily rising since the 1960’s, when a sample of 32 multinational companies were conducting 6.2% of R&D abroad, and by 1995 the number had risen to 25.8%.
During the 1990s, as a consequence of globally distributed R&D networks, R&D outsourcing began to rapidly expand. The explosion of outsourcing innovation was additionally facilitated by a number of other factors such as improved intellectual property rights and changes in trade and investment governance.
3 Issues R&D Leaders Face When Outsourcing R&D Projects
There are many aspects of outsourcing innovation that companies and R&D leaders need to consider. After having looked at several reasons for outsourcing R&D projects, as well as a handful of risks of outsourcing, Newlogic now turns our attention to some of the issues outsourcing brings about that R&D need leaders.
How to Make Selections For Outsourcing R&D Projects
One of the things an R&D leader will be called upon to do is make selections on which projects to pursue. The R&D leader will have delegation over both in-house and outsourced projects, at least to some extent. The R&D director needs to be able to recognize in which areas the company does and doesn’t have competencies. The tasks the company performs well should remain in-house, while the tasks that the company does not do, cannot do, or isn’t as good as it could be, should be outsourced. Vivek Wadhwa of techcrunch.com says that innovation of core products should not be outsourced because the developers of these innovative technologies need to simultaneously interact with each other and their potential consumers, something made more difficult through an outsourcing of this process.
Responsibility and Control: 5 Challenges of Outsourcing Innovation
R&D outsourcing is a business practice widely used by many companies across many industries across the world. A few days ago, we addressed seven reasons why a company might choose to outsource R&D. However, although outsourcing innovation can be hugely beneficial to all involved companies, the move to do so is not without its share of risks.
Six Factors For Developing An R&D Cosmetics Strategy
In this week’s cosmetics and skin care industry post, the Newlogic portfolio team write about six factors to consider when developing your R&D cosmetics strategy. To research the post we reviewed our cosmetics posts over the last few months, and conducted ancillary research.
1. The Combination of Groundbreaking Formula and User-friendly Packaging
In the cosmetics and personal care industry, breakthrough innovations on formulas and packaging are still keys to success as they directly relate to product performance. Cosmetic and skin care chemists search for the ingredients and technology to advance product efficacy, while they also contribute to design innovative package that improve product applications. This is obvious, but it’s the formula, delivery systems and packaging that make all the difference when it comes to developing innovative cosmetics projects. Your R&D cosmetics strategy has to consider what these fundamentals.
Driving Market Leadership With Continuous Innovation
Stacy Leidwinger moderated this week's #innochat on the topic of "Mapping innovation with the customer experience." One question stood out for me, "4.How do you avoid innovating for a single customer & drive innovation for a market?"
This question gets at the heart of good R&D strategy. If your company's business strategy is to achieve category leadership in a product category then you have to organize R&D so that the process of innovation is not just a series of one-off's but a road map of continuous innovation.
Instead of listening to customers to discover what ideas you should develop, you listen to customers to see what innovations you need to develop that match with your road map.
You therefore have to think carefully about your road map strategy, maybe consider innovation consulting. Look around you at competitors, think about how leadership in one attribute will enable you to maintain or grow your product's market share. Consumer insights then can be both about designing your road map strategy, and knowing what products will enable you to maintain leadership.
Additional References
Patrons Are Team Players In R&D Management
This week’s #innochat demonstrated the importance of involving patrons in the process of R&D management, this week’s chat was on the topic of patrons, and Chris Zakrajsek asked the following questions:
1. How important is a Patron to an innovation program?
2. Assuming you have the necessary resources, is your Patron necessary?
3. How do you rekindle your Patron's excitement?
4. How do you help your Patron understand the innovation process and their role in it?
I was thinking a patron can be the CEO of a company, or the business unit manager for marketing or a brand. Patrons are responsible for sales and growth of the company, and are very interested in understanding where their company's growth will be in 2,4, 6 and 10 years. Whether CEO or project sponsor, patrons have to be involved in the process of R&D management. And R&D leaders have to help explain what projects need to be chosen, by showing the importance of each project to the overall plan for the company.
Without patron's you would not have innovation, they help create the overall business strategy that fuels how an R&D strategy is developed. You keep patron's involved by letting them know how the process of choosing which projects to execute on works. You ask for their commitment to growth targets. While the patron might not be responsible for developing the innovation, they are involved in the process of deciding if a project is a good one to execute because it makes sense for the overall business strategy; both in getting their buy-in for goals, and getting resources for the research that needs to be conducted to determine the value of an individual project and its relevancy to business strategy.
Chris, Innochat’s moderator this week had used a polo analogy to frame the post; I'd like to give my own sports analogy. In sports the patron is the general manager, while R&D leaders are the scout/coach. For a company as well as a sports team, when it comes to picking players and projects, the overall team matters as much as the individual players. Each coach has to argue their case for a player and the overall team, and back up the potential with evidence. The scouts and coaches support their general manager by giving them a process for making decisions on individual players as they support the overall team strategy. In good companies just as in sports teams, patrons are supported by R&D leaders to pick the projects that work individually, but also support the overall roadmap for the R&D portfolio through a project portfolio management system.
Aiming For New Category Leadership
In defining the term category leadership I asked Oren Barkai (B.Sc.EE, MBA) is Senior Product Manager & Solutions Team Leader for Integrated Solutions LoB a Network Solutions Division for ECI TELECOM LTD about his experience with the process of achieving new category leadership. Oren suggests a company shouldn’t cannibalize an innovation for one category when the opportunity to create a new category exists.
Oren’s background is as a product manager in the technology and telecom sectors. I asked him about his definition of category leadership. He told me that he views a company to be a category leader if they “set the standard,” for technology in the field. Oren went onto to say that he defines the standard as the company that has, “the advantage of being first to market and owning the category.”
Oren went onto describe his experience that category leadership often comes from collaboration with several partners and alliances. A new innovation may come from several sources, including a start up in the technology industry. And category leaders will adopt those new innovations to keep category leadership. Oren said his he thinks of category leadership as, “Sourcing the right technology, while working to define the standard.”
Oren cautions category leaders in thinking about the adoption of disruptive innovations, while he has seen R&D leaders and companies adopt new technologies to “improve the current product,” really good R&D strategy should be focused on “founding a new category and leading it,” if the new innovation makes that possible.
What Oren discusses is interesting I think for R&D strategy....especially how how category leaders need do that it takes through partnerships to enable them to retain category leadership, but there's a caution that you must also think beyond today's category, and think about the future, by developing new categories. I was thinking Steve Jobs was has been good at that process.
Note: The views expressed here are Oren's own and do not necessarily reflect the views of his employer, ECI Telecom
Photo: Thanks for the photo by 2inches
Beach Reading: Third Generation R&D and The Living Company
Most management books are a waste, but two classics stand out as worth another look this summer if your manage R&D; “Third Generation R&D” and “The Living Company”. You can download pdf’s of both and take them to the beach. Time has distilled the wisdom in both of them.
Here’s one: if you missed Arie DeGeus’ classic “The Living Company” when it first came out, it’s been cited so often by other so-called experts that you’re probably familiar with it message: companies that survive over the long haul are ‘tolerant’, i.e., they adapt by learning and listening—the essence of R&D.
Before he taught at MIT, the Dutch DeGeus was head of strategic planning at Royal Dutch Shell where he organized a remarkable study to look at long-term survivors and figure out what made them stand out. He dug deep, and the secrets he learned were subsequently turned into popular works like “Built to Last” and others. But DuGeus is the original. Take a look. It’s also a wise and beautifully written book.
DeGeus, A. “The Living Company” (Harvard Business Press, 1997)
The other classic is “Third Generation R&D by Roussel, Saad & Erickson. When it first appeared it was far ahead of its time. But these days, connecting R&D to corporate strategy is everybody’s mantra and it turns out Roussel et al got it right. The authors started a very successful practice at Arthur D. Little (the legendary contract R&D firm that spun out of MIT 125 years ago and is still going strong outside the U.S. If you’re visiting Cambridge, Massachusetts this summer you can drive by their original headquarters along the Charles River on MIT’s campus).
“Third Gen” dug into the troubling area of how to apply management metrics to R&D performance. The authors were way out in front on this one—but what could be more timely now? Roussel P., Saad K., Erickson T, “Third Generation R&D: Managing the Link to Corporate Strategy,” (Harvard Business Press, 1991)
Background on R&D Portfolio Optimization
The principles supporting Newlogic’s R&D Portfolio Optimization and Project Selection tools originated at Arthur D. Little, Inc. (Cambridge, Ma.). These tools have been widely accepted across many industry sectors, with specific application to the CPG industry. Our POPS tool is extremely powerful, with the capabilities for real time updates, dynamic decision-making, self-adjusting value of the pipeline (based on projects selected) and identifying resource requirements.
Surprisingly, this product has grown because we offer a SaaS-like stand-alone tool that is easy to use, inexpensive to purchase, and efficient to manage from within an R&D department (No IT Required).