Silicon Valley Does It and You Should Too: Innovation as a Business Strategy.

There Is No Standing Still

Corporate visionaries recognize where their business needs to be headed.  Moreover, corporate visionaries who are also effective leaders articulate innovation goals to their creative team so they know how to channel their efforts.  From the corporate perspective, articulating the innovation goals serves to align the efforts of the creative team with the direction that the management team believes the company should be headed.

Imagine a CEO who puts a huge flywheel in the lobby.  No single person can turn the flywheel by themselves, but if everyone who enters the building applies their hand to the flywheel, eventually it turns, and then turns faster-and-faster with more and more energy.  Everyone’s effort matters because each person’s contribution accumulates and is vectored in a common direction.

Innovation in profit-making companies should work this way too:  the corporate leaders should challenge the science and innovation team to make inventions in areas that will help advance the company’s interests.  If left unguided, the efforts of the innovators will certainly produce clever ideas, but only a fraction of them will be aligned with the leadership’s strategic vision—thus failing to propel the fly wheel.

A management approach that cultivates and guides innovation will yield more commercializable ideas than a management approach that does not incorporate the innovation process.  This later “strategy” is inferior in a profit-making organization because it inevitably leads to management having to comb through various ideas to find some that might align with their vision.

Limiting Competition (But in a Legal Way)

A patent is a legal document issued by the Federal Government that grants to the inventor (or company) a legal monopoly to the invention for 20 years.  No one else in the US market may make, use, or sell a product or service that is covered by the patent during this time.  Patents cover software, hardware, machines, manufacturing methods, chemical, pharmaceuticals, and many other things.  Patents are not only for ground-breaking, E=MC2 ideas, but also ideas that are new, not obvious, and offer your business a commercial advantage.

It is not that hard–about 70% of all patent applications mature into patents.  Moreover, you do not have to actually make a working model; it is sufficient to provide an adequate written description about how to make and use the invention.

They are amazing business tools because they provide a monopoly in the US market in exchange for describing your idea in a 10 to 20-page document.  Followers in your industry risk violating the patent and being subject to a court-ordered injunction, as well as monetary damages.

And, yes, software absolutely can be patented if you know what you are doing–Alphabet (Google) obtains over 2500 patents per year.

Retaining Corporate Innovation as a Business Asset

The modern workforce is a transient work force.  After COVID-19, it may become even more transient as people recognize they can work remotely and change jobs more readily.

A prudent business practice is for the company to protect its intellectual property even if the inventor leaves the company.  This protection usually comes in the form of employment agreements that recognize inventions made during the period of employment remain property of the company. 

Epiphany of the Kingpins

Amazon, Apple, Alphabet (Google) and Facebook all became industry leaders without using patents to get them there.  However, once industry leaders, they have all fortified their positions with patents to make it much more difficult for competitors to effectively compete.  Back in the day, it was not cool to seek legal protections on software, because software “should be free” (deep inhale).

However, in the modern competitive landscape, that anti-establishment mentality is no longer in vogue.  Amazon, Apple, Alphabet (Google) and Facebook went from having virtually no patents prior to the Great Recession to being companies ranked with the 15th, 14th, 12th  and 34th respectively, most patents in the US last year.  They are on track to be ranked even higher in 2020.  They did it because it is a legally valid, shareholder endorsed and politically encouraged way to fortify their positions of advantage.

The founders of our country realized that a vibrant patent system stimulates economic growth, so they laid the groundwork in the Constitution for a patent system that encourages inventors to disclose their inventions in exchange for a time-limited monopoly on that invention.  None of this is to say that you should strive to get several thousand patents every year.  However, if there are some aspects of your new products and services that distinguish you from others, perhaps it is time for you to fortify your company’s advantage in the same way as the Silicon Valley titans have.

Grab the Wheel

Without corporate leadership, staying ahead of the competition will not happen naturally.  Creating an innovation plan is a great way to start.  In it, there should be a section on managing innovation that articulates the business areas that will be the focus of corporate investment, as well as an outline for establishing a process that identifies, captures, and protects ideas that align with the management’s vision.

If you presently lack such a plan, your next steps are clear.  Gather the strategic thinkers in your organization and identify two things: (1) what aspects of your business/product/service are commercially valuable, and thus worth protecting, and (2) establishing a process for guiding the innovative process and capturing candidate ideas that are worthy of patenting.

These two simple steps may provide enormous benefits by creating legal roadblocks to less innovative competitors.

Xsensus is reinventing the way an intellectual property law firm works by investing in the brightest minds and the latest technology to streamline their processes, while delivering creative and innovative solutions for their clients. For more information, call Brad Lytle at (571) 376-6321, or visit