Innovation exploitation

• How close it to existing solutions offered customers, can they see the fit, does it add differentiation and ability to ask a premium price - if it is incremental value then absolutely fine to be in-house and a function of sales and marketing strategy to put the benefits across
• If more disruptive - addressing totally new needs, even new client sectors and the company does not ready have the skills to exploit then some separation should be considered
• Options include separate divisions, joint ventures and genuine spin-offs when the parent company may or may not retain an equity stake
• For example, telecoms operators set up venture divisions that we almost shadow VC operations but within the existing corporate structure - these were used for experimentation with new ideas, technologies etc that they did not know how they would impact on existing customer relationships, their own operations etc and wanted to limit the downside risk if things went wrong.  This enabled BT for example to play around with various dot com concepts to learn which ones would work best, which ones should be brought in-house and which let go - BT Openzone was a great example of something that went through this process and then became mainstream for BT
• When ideas are let go, it is very difficult for the originating company to keep a constructive collaboration going and it this has to be evaluated in terms of financial outcomes.  Why let ideas go that are fundamental to the future of the business and the sector if you would have to "re-invent" the solution to fulfil your own customer needs in future - how do you know whether you are giving away the very innovations that will make the difference between success and failure
• A lot also depends on the people involved - what is the organisation structure that would work best for the team that has created the innovation in the first place - what are their motivations and drivers, what support do they need, how entrepreneurial are they, what structure is needed to attract the right skills in to exploit the innovation, how close to the current businesses CEO field of expertise is it - apply the rule that companies should not extend themselves too far beyond the ability of the existing management team to understand.  Bringing in new leadership takes longer to settle down than it takes for the window for innovation exploitation to close on any new ideas.  Better to spin something off and retain some interest rather than lose the innovation altogether by trying to hold to ideas, demotivate people so they leave anyway
• There is a trade-off of keeping ideas in-house if they need lots of financial and other support - spinning them off could starve them of the resources needed to accelerate and then they have to find their own channels to market, sales forces etc that might be readily available in-house.  However, this depends on how flexible and innovative the culture is in the first place to adapt to new ideas and not resist them
• For it is not about in or out of house but the vision of the leaders, the culture of the organisation and talent pool in the company
• Another issue is how companies are actually outsourcing innovation - being part of incubators, accelerators etc to spot what innovations are happening that could be valuable to them.  They then can decide whether to invest, acquire or support in other ways like sales and marketing.  Unilever, Bosch, Barclays are examples of this in the UK
• Smaller companies are good role models to see how this innovation exploitation can work - they don't have the luxury of enough resources to decide often on whether to keep things in-house so have to set up creative structures to exploit their innovations: venture units, equity for innovation teams, licensing to bigger companies etc

The importance of Intellectual Property in any business

• Intellectual Property is vital in any business - underpins value propositions, provides the sustainable and non-replicate basis of competitive differentiation (the "unfair advantage" every company needs)
• It is the unique way that particular company goes about satisfying its customers needs in ways that others cannot - often known as the crown jewels
• I have always seen it this way - I have always been involved in knowledge-based businesses and the way you develop and package expertise is the only way you compete and survive: if you don't know something that someone doesn't then why are you in that business?
• Companies that lose focus on IP development, and hence lose focus on innovation, become commoditised and easily drift out of experience: like road-runner they can hold their position for so long and then collapse to the ground after a dramatic and unnatural pause.  No difference here between the cotton mills of the 19th century and predictive analytics businesses of the 21st century
• Protecting IP is also crucial but in knowledge-based businesses is not about patents - it is about trade marks (crucial), copyright (crucial), culture and process, ensuring IP is productised in ways that ensure it does not walk out of the door in peoples' heads but the company retains it, creating customer-based methods that mean individuals cannot replicate the IP and process around it in other companies that do not have the same approach and mentality of the company where it was created
• Staff retention, incentives, motivation and knowledge-management systems are then very important to ensure the company and brand benefit from the IP created by its staff
• How do you know you have IP in a knowledge-based business - it can be an idea/method/approach/product that you sell multiple times that you can say you invented and multiple clients knock your door down to access the IP and gain value from it for their businesses
• IP is in the intelligence but also the way it is applied and that is where uniqueness is built
• As a CEO who has bought and sold consulting and publishing businesses - IP is what I look out for most.  Having lots of IP doesn't necessarily mean that you get astonishing value but it does mean you are saleable
• By being able to show we had a process that could reliably generate 3 to 5 "£1m" products every year over a number of years to underpin revenue forecasts was a big factor in how we sold our consulting company
• It is also the way you attract the best people to your business - appearing vanilla does not attract the mavericks, the thought leaders, the inventors and innovators
• As a more recent technology investor then I have been surprised about how little importance is paid to patents - the nervousness over revealing your invention to the outside world and the difficulty in enforcing patent rights reduces their impact on investment attractiveness
• However, the fact that you have invented something that you cannot see anyone else has invented is of immense value - at least lets investors know that there might be something unique in there and it is all about speed of execution - protection through action not through the courts
• Many investors do like to see patents as a way of giving them insolvency protection - at least there might be assets to sell if everything goes wrong and they then have a chance of rescuing some value out of the deal
• In the software world, trademarking and copyrighting is far more important than patents 
• I have used trademarks to force companies to either change their brands, company name and also avoid competing with us in some geographic markets
• These threats are credible as you can easily prove that there is client confusion and that the "copycat" company was imitating you as they started afterwards - difficult to prove they were not copying you
• This has worked for me in the US, Europe and China
• Copyrighting is similar protection and all credible and meaningful evidence with which to support your differentiation claims with clients - not necessarily to sue imitators: no-one in the SME space really has the inclination or resources to fight such things in court

Camdata Spring 2014 Newsletter

Welcome to Camdata's quarterly newsletter. View this email in your browser

Product Design & Electronics Engineering Newsletter | 2014 #1

Future proof and field upgradeable: an ideal solution to meet the requirements of RFID applications The JETT RFID+ is ideally suited for a variety of markets, such as warehousing, fleet management, transportation, mobile payment, field service, meter reading, time & attendance, machine & inventory control [read more...] The 'Connected Home': The future of living? How will technology and connectivity influence our homes and the way we live in the future? We take a look at the growing trend towards home automation, where household appliances and accessories are connected to the internet, and feature some examples of what might exist in the homes of tomorrow [read more...] Considering the crowd: Should you use crowdfunding for your technology project? Crowdfunding is currently a hot topic. Our founder was recently featured in the Investors Chronicle magazine discussing the subject. Peter considers the different options that exist for crowdfunding your technology projects [read more...] Camdata has expertise across sensing, monitoring, micro-processing and control, embedded software, RFID, device management and operator interfaces. Contact us if you have a product idea, a design brief or an obsolete product that needs replacing. For more information visit our website or that of our specialist sites Traffic signal terminals, Microscribe, MeLock or RFIDCam. Follow us on Twitter Follow us on LinkedIn

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Leadership in the smart analytics world

• The analytics approach has the ability to fit into whatever leadership culture the company has
• It informs the top-down discussion better as the leader will have better intelligence to use in their interaction with staff - they will be able to build credibility better, focus on the key drivers of performance better, motivate their staff better during those discussions and make far better use of face time with staff
• The main challenge for leaders of this type is that predictive analytics has the potential to automate many of those discussions and this can be a threat to leaders - either they will see it as making elements of what they do as redundant hence a threat to their jobs or that they will have to change their way of working that has held them in good stead for all their career - why risk their status, bonus and basis of power now?
• Psychologically, predictive analytics cuts through a lot of unnecessary noise and deliberation as it strips out the predictable patterns of human behaviour - the homogeneity that we struggle to accept - and focus not the smaller number of true differentiators that lead to elite performance
• There are fewer hiding places for those leaders who have progressed up the ladder due to their political abilities - their performance is more transparent and that can be scary for people
• In this world, top-down leaders have to adapt to having to genuinely understand the behaviour and preferences of their staff to motivate them and influence their behaviour
• The enlightened leaders then fully understand how to leverage this new data and intelligence as part of the coaching relationship with their staff, comfortable that they are not the font of all answers anymore and their success is derived from how their staff behave and perform
• This is related to the all important innovation discussion - leaders are responsible for influencing the efficiency, effectiveness and competitive advantage of their companies and teams: predictive analytics gives them unprecedented ability to work on the 3rd of those: moving them ahead of their competitors
• I think there is also something in here about the outcomes of predictive analytics being a unifying theme that can tie together all the different elements of a leaders job - recruitment, training, coaching, performance management etc, tying the external and internal views that gives them the widest understanding of how to add value to their companies
• Those leaders that excel at providing strategic vision, exercising their judgement to make decisions that will truly and positively impact on stakeholder outcomes will excel in this environment
• As in all technological innovation cycles - previously highly valued skills  become commoditised and then this creates the opportunities for new skills to develop and flourish.  Unfortunately, it is not typically the same people that succeed in the old and new environments and that is why people get worried about this change.  Predictive analytics is different than other change - it gives leaders the tools with which they can control their own destiny
• So what replaces the top-down style then:
• Through predictive analytics and the ability to feed performance data back to staff in real-time lots of what top-down managers and leaders used to have to do can now be automated and information given to staff that they can use themselves to improve and build up their capabilities
• Leaders now can be "present" during their staff's day in ways that they could not before without any sense of being big brother like
• The art of delegation is about how to ensure that people do what you want when you are not there - predictive analytics allows you both to know what it is you should be doing as well as then immersing your staff in this world without having to constantly monitor, coerce, cajole, instruct, review etc
• And, an even more important point, is that leaders often struggle when the world moves from around or under them - the basis of competitive advantage shifts, technical disruption hits their business, their staff are increasing from Generation Z etc - the methods they used before don't work anymore and their customers have moved on too
• Big data analytics learns over time as the context changes and picks up what success looks like now and in the immediate future - helps leaders staff fresh and avoid obsolescence
• A slightly weaker point but relevant nevertheless, is that leadership excellence is often seen as a scarce resource and difficult to scale: headhunters earn a fortune claiming to fill this gap
• Smart analytics helps identify better the key drivers of leadership success by organisation and hence making it easier to find more of them and reduce perceived growth bottlenecks by having confidence that you have the right people to exploit new market opportunities

Predictive analytics and risk management

Using predictive analytics you can evaluate (in a more accurate forward looking way than snapshot assessments/surveys etc):

• Retention risk: you can pick-up behaviours that give you a strong indication who is likely to leave and when with suggested actions on how to influence whether they leave or not
• You can focus this on elite performers and those who have the skills you need for the future and differentiate between them and those who are less strategical critical
• Client churn risk: same issue really
• CEO impact risk: there is quite a big issue there about monitoring what CEOs of big companies are up to - how can you predict when they might be about to do something not in the interests of stakehold

How the M2M world and the Internet of Things is evolving

With the number of networked connections increasing by 30% per year, are we any clearer on what the world according to connected devices, aka Internet of Things, actually is and means?

Towards the end of 2013, I attended a Cambridge Wireless event aimed at shedding more light on this and looking at what opportunities will exist for technologies in this area in 2014 and beyond.  Here I list out some key headlines and themes.

First question is what M2M/IoT is aiming to do - things have moved on from using M2M as a mechanism to improve operating efficiency and reducing costs to more as an enabler of new services.  It is a platform for innovation, disrupting existing processes and generating incremental revenues.  To this players in the area need to understand how to integrate their devices/sensors etc with IT and how to coordinate with the various partners in the value chai.  Success now could well have more to do with vertical sector integration than a horizontal piece of technology or expertise that others then integrate into their own solutions to meet specific needs.  To gain full value from IoT investments companies need to be expert at information sharing - development and engineering, with operations, billing, product marketing, CRM and sales.

The central theme becomes how to harness value in the networked marketplace to bring value to the consumer:

• Data becomes mission critical in terms of driving revenue growth
• Optimisation is based on real-time data and not estimations or last night batch run
• The data and information is more important than the connectivity
• IoT provides the "industrial internet" - the glue behind all enterprise activities
• Human relationships still the key - survival of the fittest in terms of those able to adapt to change

Let's take the example of the connected toaster - what is seemingly a trivial application of sophisticated technology as toast is toast, can actually reveal lots of interesting information about energy usage, family behaviour, safety, health, assisted living etc.  Take smart cities - transport becomes an integrated element within the overall system not a standalone function.

What technological innovations will drive the IoT:

• Direct inter-device networking creating their own clouds
• Sensor miniaturisation - external, wearable, detachable, implanted
• Integration of the real and virtual worlds, e.g., active contact lenses
• Cheap displays

There are some interesting challenges facing the IoT ecosystem if it is to become mainstream:

• How to provide data assurance in the cloud - protection against disappearing cloud providers?
• How to aggregate data and information and people to pay for things they don't necessarily enjoy, e.g., insurance, energy and the smart home?
• What to do with information that you weren't expecting to get - real issue in the smart health market and early diagnostics of serious conditions where diagnosis runs ahead of cure?
• How to integrate with solutions for constituencies that will always attract spending, i.e., pets and children?
• Will areas of market failure provide the impetus to wider scale adoption, e.g., energy in Africa where, for example, two thirds of Nigeria is off grid?
• Will mobile operators dominate given they have a unique ability to manage the IoT from end to end and can benefit from increasing average subscriptions?