Author: Dr. Mildred Hastbacka

Tactical vs Strategic Licensing

Part II

In Part I of “Tactical vs Strategic Licensing” (October’s blogpost), we focused on the differences between tactical and strategic technology licensing, including the potential business usefulness of strategic licensing. Here we explore in greater detail the “right” business processes, resources, and organization for a successful transformation from tactical to strategic technology licensing.

From an operations perspective, the transformation from tactical to strategic licensing requires a supporting evolution in three distinct areas:

Business processes

Resources

Organization

To begin to understand where you are as a company along the “tactical” to “strategic” licensing continuum, consider fully the answers to the following questions:

Do we have the right processes in place?

For example, if you plan to license technologies which you are using yourself to support the products you sell, you’ll need to adopt a “business case” approach to assess the impact of licensing to third parties on your business that’s supported by self-manufacturing. A “best practice” followed by the most successful integrated manufacturing/licensing companies is the development of a formal, comprehensive business case approach, similar in depth and breadth to the company’s existing five-year business plans for its product lines.

Do we have licensable technologies?

Assuming that you decide to engage in technology licensing as a business per se, how are you going to generate licensable technologies on an ongoing basis? What is the interaction between the licensing group and the technology development groups? In most cases, operating units or business units continue to fund R&D, with the licensing group getting at least a voice in the early stages of the technology development process.

Does our licensing organization look like a P&L?

The transition from tactical to strategic often involves shifts in organization. Companies that have begun to treat licensing as an identifiable and separate business activity often put someone with successful P&L experience in charge. The group is then “built-out” with a full-time supporting cast dedicated to commercializing the licensable technologies. The performance of strategic licensing organizations is measured in terms of income generated.

A graphic depicting the “tactical” to “strategic” continuum is shown below. It provides a snapshot of the extent to which a licensing organization “looks” like a P&L.

Is licensing a viable business strategy element for you?

Technology licensing can be a useful vehicle for technology-rich companies. In Part III of “Tactical vs Strategic Licensing” (our next month’s blogpost), we’ll provide you with a checklist of key issues to address and which will lead you to the answer to this question!

For more on creating value by commercializing technology, see https://www.prakteka.com/category/technology-commercialization/

We at Prakteka LLC developed our expertise in market penetration strategies in the context of numerous and diverse client assignments, all focused on using technology to create business value. We are here to help you answer business-critical technology questions, too. For a customized plan for your needs, contact us at http://www.prakteka.com/contact-us/

Tactical vs Strategic Licensing

Part I

Would you like to increase your bottom line – without additional capital or research investment?

Would you like to tap into new foreign markets – without investing in property, plants, or equipment?

Would you like to develop new technologies – without expanding your existing R&D resources?

Would you like a base level of revenues to help smooth out otherwise cyclical earnings?

Would you like your technology to become the industry standard?

Is all of the above too good to be true? Well, it’s all true! For more than two decades, major corporations as well as start-ups and companies in between have enjoyed these outcomes. An important vehicle these companies have used to achieve these results is technology licensing — licensing that they approach strategically, rather than opportunistically, to maximize the commercial value of their technology.

Tactical Licensing – Why and How

Even after two decades of proven results from technology licensing, there are still many companies that have yet to recognize its potential as a significant element of business strategy.

Often companies treat licensing as a low-priority, after-the-fact tactic. This “tactical” approach to licensing is used as a means to recovering a portion of the development cost, as long as the company’s strategic market position isn’t compromised by such licensing. In these companies, the licensing staff provides services to the business units only as needed and licenses only what the business units don’t want.

Strategic Licensing

At the other end of the spectrum are companies whose approach to technology licensing (and, more broadly, intellectual property licensing) is best described as “strategic”. These companies have effectively created sustainable technology-licensing businesses based on developing and realizing value from technology-based intangible assets.

Moving from Tactical to Strategic Licensing

Moving from tactical to strategic licensing doesn’t happen at the grassroots level of the organization. The decision to incorporate technology licensing as a key part of the overall corporate strategy is most often made by the CEO, and it’s made explicitly. At some point, the CEO decides that the company is going to begin using its intellectual assets in a way that is significantly different from the way these assets have been used historically. From an operations perspective, the transformation from tactical to strategic licensing requires a supporting evolution in three distinct areas:

• Business processes

• Resources

• Organization

In Part II of “Tactical vs Strategic Licensing” (our next month’s blogpost), we’ll explore in greater detail the “right” business processes, resources, and organization for a successful transformation from tactical to strategic technology licensing.

For more on creating value by commercializing technology, see https://www.prakteka.com/category/technology-commercialization/

We at Prakteka LLC developed our expertise in market penetration strategies in the context of numerous and diverse client assignments, all focused on using technology to create business value. We are here to help you answer business-critical technology questions, too.

For a customized plan for your needs, contact us at http://www.prakteka.com/contact-us/

What is “Technology Assessment”?

Technology Assessment is a process by which the commercial potential of applied science and engineering can be determined.

“Technology” includes products, processes, devices, services or other embodiments of applied science and engineering.

The process is analytic and systematic.

“Potential” is influenced by a number of identifiable factors:

  • Technical feasibility
  • Requirements for/barriers to implementation
  • Available markets
  • Competing technologies

Technology assessment is useful in situations where client management is uncertain about the commercial prospects for its technology.

The output from a well-planned and executed technology assessment: both qualitative and quantitative answers to fundamental questions in technology-based businesses, e.g.,

  • “This technology is available to us…should we invest in it?”
  • “There are several technologies available to us…which should we choose?”
  • “What is this technology worth?”
  • “We have this technology…what (else) can we do with it?”

We at Prakteka LLC developed our expertise planning and implementing technology assessments in the context of numerous and diverse client assignments, all focused on using technology to create business value. We are here to help you answer business-critical technology questions, too.

For a customized plan for your needs, contact us at https://www.prakteka.com/contact-us/

For more on technology assessment, see the expanded discussion on our Prakteka LLC website, https://www.prakteka.com/category/technology-assessment/

If Your Business Depends on Intellectual Property

If your business depends on intellectual property (IP), then “best practices” for your IP business activities are those that…

…support the business objectives of the company and

…increase company value.

For any high-performing business, there are 4 key building blocks: strategy, processes, resources and organization. Here are these building blocks applied to IP business practices:

  1. Strategy: Which invention concepts are we free to develop? Which are worth patenting? Can we/should we consider an Engineering-to-Own-the-SpaceSM innovation Strategy? 1
  2. Processes: Who decides how and where we should invest our development dollars?
  3. Resources: Can we accelerate our development or broaden our reach by bringing in technologies from the outside? If so, which ones, from where, and for how much?
  4. Organization: Do our IP development initiatives and outcomes have top management’s attention, understanding, and endorsement?

Adopting high performance IP  business practices can enable you to:

…strengthen and even shift the basis of your competition

…protect IP that delivers high value to your customers and end-users

…avoid product and/or technology obsolescence

We at Prakteka LLC developed our IP expertise in the context of numerous and diverse client assignments, all focused on using intellectual property to create and sustain business value. We are here to help you, too,  maximize the impact of your IP on business value.  For a plan customized to your needs, contact us at https://www.prakteka.com/contact-us/

  1. For more on the “Engineering-to-Own-the-Space” Innovation Strategy, follow this link to the SlideShare presentation: https://www.slideshare.net/mhastbacka/engineeringtoownthespace-innovation-strategy

Engineering-to-Own-the-Space is a service mark of Prakteka LLC.

Marketing Technology? What Your Prospects Want to Know

Seems as if everyone is marketing technology these days. Start-ups, mid-sized companies, inventors, individual entrepreneurs, major global corporations…all of them are promoting new technologies. But, when it comes to moving their prospective customers down the “awareness, consideration, preference, sale” funnel, many marketers are stalled even before they start!

Before you start preparing your marketing presentation, consider these 5 key facts your prospects want to know about your technology:

  1. What are you selling? An idea? A product? A technology? A development or commercialization collaboration?
  2. What does it do? Prospects don’t buy ideas or products or technologies or collaborations…they buy what these things DO! And they are most interested in what these things DO for THEM!
  3. Do any other companies provide what you’re selling? If so, your prospects need to know how you are different and better, in ways that are meaningful to them.
  4. How do you know what you’re selling works? And how do you know your offering is better than any competitor’s offering that might offer the same functionality? Said another way: who has validated your claims and how?
  5. What is the value of your offering to your prospect? Reduced cost? Better performance? Easier to manufacture? Long life? Simple servicing? Understand what’s valuable to your prospect and direct your answer accordingly.

Use the above 5-point guide not only to prepare your marketing presentation but also to identify the prospects with genuine need for and interest in what you’re offering.

Want some customized help in preparing your marketing presentation? Contact us at https://www.prakteka.com/contact-us/

Or email us directly at mah@prakteka.com

For more about technology commercialization, go here https://www.prakteka.com/category/technology-commercialization/