What is the strength of innovation in your organization? In this week’s Killer Innovations, we explore avenues to building innovation strength. Innovation from Mergers and Acquisitions can be a fast track to innovation. What are the pros and cons to this innovation path? We also look at the five biggest risks to innovation. Your company’s innovation depends on avoiding the pitfalls. Is building innovation strength through acquiring innovation right for your company? Avoiding the risks to innovation stretches across a broader spectrum. Any company should be aware of the five biggest risks to innovation.
A growing means of building innovation strength is through acquiring innovation. Innovation from Mergers and Acquisitions has its benefits and its drawbacks.
To start, there are two types:
Let’s discuss the first type, acquiring the company. Innovation from Mergers and Acquisitions has its pros and its cons.
Pros
Cons
The most common reason for Innovation from Mergers and Acquisitions are:
Innovation from Mergers and Acquisitions can work if it is:
The second type of Innovation from Mergers and Acquisitions is purchasing Intellectual Properties (IP). Why has it become so important? In a word: litigation. Patent lawsuits offer lucrative opportunity. Exclusivity to a company’s investment can reap financial gain. This creates issues for those seeking to build innovation strength in this way. It can be especially difficult for the small business. To buy a patent can be expensive. Options are out there for acquiring innovation to build innovation strength. Companies can join a patent pool. Another option is for companies to join forces and make a group purchase of a patent.
Whether you are part of a large or small organization, think of this approach. If you are a seller of patents, write it in your agreement. Prevent the buyer from using your patents in proactive litigation. Allow the patents to only be used in defense. Why do people acquire patents?
Allowing your patents to be used only in defense, make them unattractive to patent trolls. Patent trolls’ sole purpose is to buy patents and sue. We need to come up with a radical approach to addressing the patent lawsuit challenges that are taking place in organization.
Another aspect of this are PCLs (Patent Cross Licenses). Most large companies pre-negotiate a patent cross license. This takes the whole risk of litigation off the table.
It does not matter what or who you are as an organization. It’s a common theme I have seen across organizations, irrespective of their size. I’ve compiled what I’ve observed into “The Five Biggest Risks to Innovation.” Those risks are as follows:
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