Do Investments in IP Rights Generate Growth? [infographic]
A company’s future growth potential is a function of the alignment of a company’s assets relative to future growth opportunities. Along with intangible assets such as knowledge, competencies, willingness and readiness, a company’s growth success is also reliant on tangible assets – culture, intellectual property, technologies and capital – all fundamental elements for sustainable business growth. Collectively, these assets are what makes a company who they are and what makes them unique.
To create differentiation and long-term defensible competitive advantage companies should strategically innovate and tap into their assets, which includes but not limited to strategically investing in the right intellectual property. But does innovation in its purest form always create competitive advantage and growth? Not anymore. The key is to transform your innovation into business innovation. For example, not long ago Nokia and Motorola dominated the mobile phone market with leading products such as Model 5110 and StarTAC respectfully. More recently, however, new market entrants such as Samsung, HTC and Apple have ravaged those once dominant products. But not only did these new players take the lead with their advanced technologies, they managed to change the industry landscape. They created entirely new categories such as smartphones, tablets, and in Apple’s case – an entire ecosystem around these inventions.
Let’s take a quick look at the Computers, Internet and IT industry overall – IBM filed over 6,000 patents in 2011 compared to Apple’s 676. Did IBM see substantial growth or return on this investment? We explore this question with our featured infographic, and examine both companies’ CAGR (compound annual growth rate) and ROIC (return on invested capital) to see if investing in patents generates long term growth or return on investment.
Patented or not, innovation alone is not enough to create transformational growth. Companies need to strategically align and tap into their strategic assets and reconceptualize innovation as business innovation as a means to monetization. Companies can create revenue streams from unrecognized or undervalued corporate assets, unlock open market spaces and offer new platforms for growth. Abandoned past company projects or technologies can also be new ways to grow. Repurposing, capitalizing upon and deployment of hidden assets can increase value to your customers and drive new growth.
Realign and tap into your assets by answering the following questions:
- Are we investing our capital into the right strategic assets that give us return on our investment?
- How can we monetize upon our intellectual property (licenses, commercialization, etc)?
- Do we have unrecognized or undervalued assets that can be offered to our customers?
- Can we reposition any of those assets in other markets?
- Can we mine R&D for failed projects, technologies or components that might be combined, crafted or re-purposed into a unique new offering?
- Are we aligning and positioning our strategic tangible and intangible company assets in ways that are most likely to generate growth?
image credit: growthstrategy.com
Wayne Simmons is an accomplished executive, innovator, value creator, and entrepreneur and co-author of GrowthThinking: Building the New Growth Enterprise. As CEO and Co-Founder of The Growth Strategy Company, Wayne leads the vision, strategy and growth of the company. He has worked for global advisory firms Ernst & Young, Deloitte Consulting, and has been a trusted advisor to C-level executives at Fortune 500 corporations, venture capital firms, and small and midsized companies. Wayne was trained in airborne reconnaissance for US Army Intelligence; and is an alumnus and Fellow of The Wharton School of the University of Pennsylvania. Keary Crawford is a results-driven executive leader with extensive experience in operations, M&A and finance for start-up, entrepreneurial and middle-market companies. As co-founder and COO of The Growth Strategy Company, she manages the strategic growth and vision, and day-to-day operations; and is co-author of GrowthThinking: Building the New Growth Enterprise. Keary was trained in Behavioral and Social Sciences and is a Fellow and alumna of the Executive Development Program at the Wharton School of the University of Pennsylvania.
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