Scenarios Now and the Genius (hidden) within Crowd via ScenarioPlans.com

On a sister site, there is a discussion by DelphiMan about the state of scenario planning today, and some new research on ways to squeeze out the genius among laypeople crowds: Scenarios Now and the Genius (hidden) within Crowd,
Check it out here on ScenarioPlans.com (or DelphiPlan.com).
First, a McKinsey study showed that CEOs really wished that they had done more scenario planning after the great recession. Before, really. But, now with almost 10 years in the rear-view mirror, it seems likely the idea of such vigilant planning for a flexible future has waned.
In the meanwhile, the genius of  crowds can still be used very effectively using a Delphi Method approach to capture the expertise of experts (or informed people).
A very interesting new study used a crowd of laypeople. Even when the crowd is, on average, misinformed, it is possible to identify those people who are really informed and correctly assess the truth.
This reminds me, but in reverse, of a Lee Iacocca story when he was at Ford (prior to the turn-around at Chrysler). They surveyed people in upscale communities to see if they would like to buy the new Ford sports kind of car being developed including a convertible version. The answer was, unequivocally, NO!.  Lee sent his team back into the suburbs to ask again. But this time the question was two part: "Would you buy this car?" NO. Would your neighbor buy this car?" Absolutely YES!
The Ford Mustang took the market by stampede!....

"We are continually faced by great opportunities brilliantly disguised as insoluble problems." 
Lee Iacocca ... from BrainyQuote.com 

XGame Innovation in Carbon Capture

Look at the great innovations up in Canada in the CCS xGames.

Checkout the blog at SustainZine related to this very cool competition: http://sustainzine.blogspot.com/2017/01/co2-xgame-winners-in-canada-losers-in.html

Here's some info on this big competition in Canada: CBC News discusses competition sponsored by Canada's Oil Sands Innovation Alliance and U.S. company NRG.

Normally you think of Carbon Capture & Sequester as a dead cost. Take carbon dioxide out of the atmosphere (maybe at a smoke stack where it is highly concentrated, and pump it down into caverns, maybe where the coal or oil came from. But CO2 is a valuable and sell-able byproduct. Think about the fizz in your pop.

Maybe innovation like this Carbon XGame contestants have demonstrated, might allow us to burn all the oil and coal in the world without impunity. Maybe if we all hold our breath (one way to reduce CO2), the impact of our non-sustainable ways will not come back to bite us in the proverbial butt.

SustainZine said: "That means the the job of the CCS might turn out to be far, far bigger in the future, as we try to burn up the last century or so of fossil fuels over the next hundred years.

We here at SustainZine consider "conservative" this way: The bestest, cheapest, cleanest gallon of gas is the one never extracted, never processed and never burned. The bestest, cheapest, cleanest tonne of coal is the one never extracted, never processed, and never burned (scrubbing or no scrubbing)."  

In the meanwhile, innovation is the engine that will keep providing options, long after the most obvious alternatives have been exhausted. 

Long-term good for R&D, Patents and Profits

A recent study shows how long-term focus pays off. This study concentrated on switching the CEO compensation to longer-term. From that point forward, what happened, on average to several things related to the performance over time.

Great study was by Flammer and Bansal (2016) and summarized in the WSJ, CEOs should focus on the long term, a study says. Although the study is coming out soon in the Strategic Management Journal, you can find it here.

The researchers selected companies that were long-term focused based on those companies that had a long-term compensation package presented to the board that was narrowly approved. The narrowly approved implies that this was a bit of a surprise to the executives resulting, potentially, in a paradigm shift toward longer-term focus. The board voting was reviewed from 2005 through 2012 so that there would be room for performance analysis.

There are many positives related to long-term focus all around. Companies with a long-term focus do better all around (profits, net profit margin, sales, stock price, etc.). Those long-term focus had a statistically significant improvement over the longer term (2 years and longer). Interestingly, they had a small dip insignificant dip in the short term.

Longer term companies spend more money on R&D, got more patents, had more patents that "flopped" and had more patents that were "hits". Flops and hits were based on the citations of their issued patents. Lots of citations means hit, not very many means flop. That has issues, but seems acceptable (unless you want to do a market analysis of the patented technologies).
They also did a analysis of exploratory vs. exploitive. This was based on 80% vs 20% of the patents citations being internal to the company. So if lots of citations in my current patent refer to my own prior technology then it is a incremental, exploitive patent. They used a log scale on the number of patents, so a 0.568 correlation could be extrapolated on a logarithmic scale! A 57% correlation meaning that the decision to go long-term-centric resulted in a 57% positive change in the patents. Because they argue a cause-and-effect, they are an argument for causal correlation.

Hits and flops of patents is interesting. First, the patent needs to be more disruptive (exploratory) and new to the company. Then the number of references to the patent were reviewed to see if it gets an abnormal amount of citation activity citing it. Flops would be exploratory that get very low citations. They first combined both hits and flops and indicate that total as a share of all (exploratory?) patents. This is statistically correlated at R-squared of 0.571. Trying a lot results in lots of failures and hits.
Note that the number of flops and the number of hits were statistically correlated: 0.457 and 0.427. This is very interesting, if you aren't trying, then you aren't innovating. In this case, long-term focus means that you are trying and getting a good splattering of both. (They use the methodology here of Azoulay et al., 2011)

Verdict. Boards should focus on long-term for compensation. This means that they have to be willing to take lesser profits in the short term.

There are also very strong correlations to the KLD factors, collectively and all four components: employees, environment, consumers and society.
Verdict. Corporations should focus on sustainable, long-term targets for goals and for compensation.

They have some limitations to this study, but they also combine it with good literature support for long-term-centric management practices. And minimizing the principle-agent problem common to executive compensation.
We want everyone highly motivated by the long-term, sustainable success of businesses (& not-for-profits & Gov)...
Anything else is, well, short-sighted!

References
Azoulay P, Graff Zivin JS, Manso G (2011). Incentives and creativity: evidence from the academic life sciences. RAND Journal of Economics 42(3): 527–554.

Flammer, C., & Bansal, P. (2016). Does a long-term orientation create value? Evidence from a regression discontinuity. Strategic Management Journal. doi:10.1002/smj.2629

Prize of $24M to 12 scientists WSJ

Breakthrough Prize awards $24 million to 12 scientific researchers.

This is in the WSJ article ...  via @WSJ ... By  GEORGIA WELLS  
Updated Dec. 4, 2016 8:11 p.m. ET

Categories from Genetics to Black holes. Big players from FB to Alphabet/GOOG were on site to promote these awards and recognition. 

Very cool.

It is unclear if these prizes are attached to business engines or incubators. However, with that level of notoriety, and the prize money, these winners should be able to move forward with inventions that hold promise of commercialization.

Congrats to all winners.

China’s Patent-Lawsuit Profile Grows - Troll Tolls Too - WSJ

China’s Patent-Lawsuit Profile Grows - WSJ:

China as a focal point of Intellectual Property, in the patent office and in the courts.

This law suit by WiLAN is interesting to see how the "assertion" of patents can move and shift.

Here's a little background on WiLAN from Wikipedia.

As you can see the company originally developed stuff so it would not be categorized as a Non-Practicing Entity (NPE), or Patent Troll in the ungracious term that is sometimes more appropriate for NPEs. WiLAN seems to be moving more steadily into the troll category.

Now with a war chest of some 3,000 patents+pendings, WiLAN is a strong international force.

In 2013 Daniel Fisher describes the Texas case where WiLAN had its core patents to the suit invalidated in "how to bag a patent troll". The stock (on the Toronto exchange) fell 33% to $3.25. In 2014, Apple won again in California.

Apple has won several law suits against WiLAN including a 2016 verdict. Look at the 6mo & 10yr stock chart on Yahoo, where it dropped from $3.40 to $2.30 in a few days at the end of July 2016. It now trades at $1.80.

The Investor profile is not so good, even with the Samsung licensing deal last year.

WiLAN continues to build its patent portfolio.

One of the things that a Patent Troll never wants to do, is actually go to court. Patents can be invalidated, remedies can be diminished, and the golden goose can give up the ghost.

Gotta love the trading symbol that starts with WIN (WIN.to).

There are several things that WiLAN could do to make it a much more legitimate player, and less of a troll. But those involve capital investments in R&D to invent, manufacturing to produce, sales and marketing to sell. That's a different business model. As long as investors are happy with investing in trolls, the trolls will rein supreme within their little serfdom of bridges.

'via Blog this'

Toll of the Patent Troll

The Wall Street Journal has a great article about Patent Trolls and the Toll the cost on an innocent economy. Here's the excellent WSJ Article: America’s Biggest Filer of Patent Suits Wants You to Know It Invented Shipping Notification, By RUTH SIMON and  LORETTA CHAO, Updated Oct. 27, 2016 1:11 p.m. ET.

Small(er) companies are targeted by a non-practicing entity (NPE), sometimes ungraciously referred to as a Patent Troll. IPZine previously discussed Patent Trolls in their various forms. Efforts to kill the trolls, or at least send them back under the bridge have moved forward with mixed success. In the US, the court costs have been paid by both parties historically, so winning in court, might still be losing. It might be better to simply pay the fees that would go to lawyers and be 100% certain of the outcome. A court ruling in 2014 has shifted this court cost dilemma. (See Wikipedia article on Patent Trolls.)

Imagine a portfolio of patents related to predictive arrival. That is, when will a product, person or thing arrive. The patent portfolio has 60 some patents with about half still active. That affects almost every business concept from shipping, manufacturing, service and more. It certainly hits on most of the activities that occur on the internet as well. Airlines, shippers, buses, and school buses -- government and private -- have fallen prey to the transit NPE.

So a small(er) business, attempting to do business, gets suddenly clobbered by legal notices and maybe even law suits. WHAT!!!??? The company probably has no patent attorney, so they scramble to find one. The patent attorney advises, at say $500 per hour, on the options and the potential costs. Litigation will cost $250,000, unless you lose; then it gets expensive!.

So, what's a small firm to do? This fight is like taking a pocket knife to a gun fight. Might be better to pay some fee, say $25,000-$50,000 and possibly a licensing fee (say a small % of sales), then to risk the bankrupting if the business. 

All agreements are confidential, so it is hard to see who paid what licensing fees, and how much. The big shippers of FedEx and UPS have, apparently, full licensing for them and their clients. So a small company that uses their services, and only their services (of shipping and notification), might be in the clear. 

The big NPE in this Simon & Chao article is Shipping & Transit LLC. About 10 years ago, the company tried to do a product for buses and shipping (Bus Stop and ArrivalStar). But neither worked out. So now Shipping and Transit sit around suing companies. 

Not a single law suit has gone the distance. Consequently, none of the patents have been really tested. This is interesting since many of the patent claims are rather obvious and arrival/queuing goes back 50-100 years. 

It seems like some type of a class action suit would be possible and force the issue against the NPE. The secret to the success of the Patent Troll, however, is to pick off the prey a few small targets at a time. Then, those victims who survive, are signed into an iron-clad agreement that cannot be breached under penalty of death. The airlines, FedEx and UPS are not talking, but what an interesting conversation that would be. 

The Jones gang of Shipping & Transit, way back in the day (circa Y2K) of ArrivalStar were ruthless. Doesn’t seem like much has changed… 

Keywords: NPE, Patent Troll, licensing, PLA, patent licensing agreement, economic development, 

Readying a Patent Portfolio for Sale

In years gone by, companies with extensive patent portfolios were loathe to sell these assets, strongly preferring to license them.  These Patent Licensing Agreements (PLA) came in several flavors, most had some form of royalty payments for the licensor and the fundamental was that ownership of the patents remained with the original owner, i.e., the company granted the patent(s).

While not totally different today, much has changed in the disposition of thousands of US patents.  Patents are now sold in much greater numbers than in decades past.  Some of the reasons for this are:

·         Corporate decision to shut down or sell of an operating division

·         Near term need to financially rescue another part of the corporation

·         Shift in corporate direction/strategy

·         Pay a court imposed penalty

Patent sales are now so commonplace that online IP reporter sites like www.IAM.com recently devoted a webinar to the patent selling process.  This process, as one can see, includes seven steps.  The assumption here is that the seller completed a validity check to the extent possible on each patent offered for sale. 

It is noteworthy under Step 6 that the biggest buyers of patents review around 1,000 seller packages per year.  This clearly puts the onus on the seller to develop a first class patent package.  It also suggests that this is a buyers’ market putting more of a burden on the seller to find ways to get the most value for its assets.

Keywords: patent, patent portfolio, licensing, PLA, Patent Licensing Agreement, commercialization.