Reality checking radical innovators

Wednesday, April 29, 2009 | Posted by: Grant Thornton
Categories: Business, Education | Tags: government, intellectual property, cambridge enterprise, teri willey, ip laws

Turning great science concepts into commercial reality.

Teri Willey, Chief Executive, Cambridge Enterprise spoke with a Grant Thornton representative at the Economist ‘Innovation Island’ conference. Tasked with leading innovative research oriented companies to commercial success, Willey said it is important to shield innovators from excessive managerial constraints, to let them ‘do the science’ then lead them through financial and governance processes. She bolsters Britain’s claim to be a leading centre of innovation, saying our overall approach provides an opportunity to leap ahead of the United States, her home nation.

Most people will look to the United States in terms of being a paragon of innovation; do you see it in such rosy terms?

“No, I don’t. The differences between the United States and the United Kingdom are subtle. In the US, Universities have been engaged in this type of knowledge transfer for a little longer than in the UK however the UK’s performance is now approaching that of comparable US institutions.

“The University of Cambridge participated in the Cambridge-MIT Institute, a knowledge transfer programme between MIT and Cambridge. There was a lot of know-how exchanged in both directions. There are differences between the US and UK, which have to do with execution, and it’s necessary to pay attention to these. In the US, for example, the underlying legislation and the rules governing ownership of inventions are much clearer, more uniform. Primarily, this is because the US has gone from a completely centralised system, where the Government funders owned everything, to decentralised programmes, allowing universities to own the intellectual property made by the academics at their institution and work closely alongside them to find homes for their inventions, and facilitate their commercialisation”

“In the UK, we started from the position where everything was centrally owned by the government. The UK changed somewhat later than the American Bayh Dohl Act, which allows universities to exploit their own intellectual property more like the US position. This has resulted in similar goals of making it easier to engage with industry and investors.”

Is a global approach to innovation just a widening of the knowledge base, or is there a clear benefit in bringing to innovation, an American experience and a British experience? Is it cultural, is it knowledge, aptitude?

“The area I am most familiar with, is in trying to deliver innovation through commercial channels, and in this respect the science is excellent everywhere. However, the differences arise in doing the transactions, delivering that science, and having systems for creating incentives for investment, which includes having strong intellectual property laws and enforceable contracts – this is practical stuff that makes a big difference.”

“China and India are moving to strong IP laws. As recently as five years ago, we may not have included China in our filing strategy; because we weren’t sure we could enforce IP rights there.  Having an agreed upon means to express a relationship also matters, and that is what a contract is about.  A contract states that there is a relationship with the company, regardless of where it is in the world, and that there is an agreement that in exchange for limited rights to this monopoly/patent, we are going to share in some of the returns.”

“International organisations such as the Licensing Executive Society, work toward understanding and developing harmony among countries regarding these types of transactions. It is about having people and tools to manifest the transaction. It sounds very utilitarian. But until you have these things in place, the next stages of completing a commercial transactions can’t happen.”

Turning the innovative idea into a commercial reality, most people don’t make it; those that do make it, what do they do right?

“Those that do make it probably have a little bit of luck and tend to be good at assessing the idea and finding the help they need. It is about understanding not just what they have, but what they don’t have, and then having the where-with-all to go and get the people or resources they need. Most companies have managed the technical risk well. Very few of our failures are to do with technical risk or because the science fails.  It is usually because the innovators have underestimated the market risk, the management risk or the financial risk.”

How do you reality check ‘the creatives’?

“We have the pleasure to work with a talented group of people at Cambridge. It is not a homogenous group and we can’t make assumptions about why they are choosing to engage in commercial activities.  We reality check by asking a lot of questions and so do they.  They are scientists and rarely work with an “n of one”.

“We reality check by asking the questions “Who would be interested in your idea? And why?”  They usually know the answers, but have just never been asked the questions.  Sometimes we ask: “If you could have the ultimate partner to help you develop this idea, what attributes would that partner have?” Is there an existing person or company which fits that description, and why?” This process causes the innovator to jump far ahead and reverse engineer into what is needed to be done.”

How do you encourage innovation?

“With the small companies we work with, we don’t need to encourage them to be innovative.  More often we need to encourage a bit of standardisation; we need to rein them back sometimes, teaching them that doing some very practical, un-intellectually satisfying things will be required to make the project work.”

“The challenge to encourage innovation tends to be within the University infrastructure itself. We know that we will not get our job done unless we get deals done, which forces us down a certain type of path and style of execution. It is necessary to constantly evaluate what Cambridge Enterprise is doing, making sure our approach to commercialisation still makes sense, and it’s relevant. In an organisation of our size as a small affiliate of the University, this is not too difficult. We can pick an away day and consider why design is important. We can look at everything from operations, to how we assess technology and figure out what we are going to do with it.”

“In a huge organisation such as the University, that is where the real challenge is. In the laboratory innovation continues to develop very well. But innovation has to go on in other places too. In decision paths, in Government, in how you fund initiatives.”

Are there areas or paths which continually get blocked?

“We found that we often go back to strategic selling principles, and we can apply these with some success. The interesting thing about Cambridge, however, is that if things are blocked, people find a work-around, and because of this approach, there are lots of enterprise opportunities.”

The psychology of innovation - what are the core principles for motivating innovation?

“With academics, it’s the passion of their idea. Even though we return significant monies to the innovators on a regular basis, it seems to me that most innovators or academics don’t really care about the financial return. They want their work to have an impact and, they certainly want to be treated fairly when it comes to sharing the upside. “

Jonathan Kestenbaum spoke at the Innovation Island event in February about the rhetoric gap, how do we employ these radicals successfully? How do we identify them and get them to work within an academic institution?

“Cambridge is historically good at it this from an academic side, because the academic life and radicalism are often highly correlated. The challenge is to apply operational, financial, and governance structures to a project, making the overall process of innovation much safer. I’ve made some hires, or helped to promote some people within my organisation, and the reason they are good is because they help to bring fresh thinking and innovative approaches to the organisation.”

Do the radicals have a short lifespan?

“If they do, it’s usually not inflicted by the institution. In my own organisation, my two main tasks are to make sure there are resources to enable my very capable staff to do their jobs, and to be their flack shield so they can do what they do best.” 

How do you placate a conservative manager when the radical innovator has gone off the wall a bit? What do you emphasis to them?

“Point out the value of the project, what is being achieved and its greater purpose.  Sometimes we do have to remind ourselves that the characteristics that make a radical innovator hard to handle are highly correlated with their ability performance as an inventor.”

Describing the UK as a centre of innovation, how far are we from that target?

“I think we already are a centre of innovation. I don’t agree with complacency, but we are often too hard on ourselves. One of the reasons I came here to Cambridge, was because there is a lot of pioneering going on in technology transfer. There is a lot of attention to making sure we get the best out of our fundamental research endeavours. There are a number of concurrent experiments, and I think this concurrence compresses the timeline to achieving real goals. In the US the technology transfer process may leave less room for trying new approaches.  The opportunity to innovate in how we carry out our work may mean the UK is poised to leap ahead.”