Most corporations today refuse to accept ideas from outside inventors
Many people assume that corporations will readily consider good ideas from external sources, presumably because from the outside it makes sense to do so. That is, why should a corporation spend the time and money to create something from scratch if someone else has invented a product or technology that is a good fit and can be acquired at a reasonable cost? Against this assumption, countless numbers of inventors have expended considerable time, money and hopes on patenting their inventions and submitting them to corporations for review.
The sad truth is that most of the money and efforts of these hopeful inventors are wasted. Few corporations today have policies that make it possible for their employees to gather unsolicited ideas from outside of their existing employee or supplier base. Ideas sent to the corporation by outside inventors rarely get reviewed for merit by the relevant business teams. Rather, after the inventor submitting the idea is sent a form rejection letter, any correspondence generally gets relegated to a file cabinet in the legal department never to be seen again.
Inventors with good ideas (where the merit of their ideas has often been validated by their patent attorney’s filing of a patent application or, in many cases, the US Patent Office’s issuance of a patent) do not understand why corporations “would be so stupid not to buy their million dollar idea.” So, they continue to pay invention submission companies $1000’s to send their ideas to corporations for review, most of which are directed by the mail room to the legal department for preparation of the rejection letter. More ambitious inventors might try to find the right business or technical person within the organization, however, this person has probably been instructed not to talk to anyone about unsolicited protect or technology ideas.
The net result is that, under the policies in place today at most corporations, the odds are stacked against an inventor seeking to submit a new product or technology idea on an unsolicited basis. This may seem short-sighted: why shouldn’t a corporation be willing to look at ideas that could result in huge sales? There are several of reasons that such policies have developed over the years, each of which is discussed below.
The acceptance of ideas into a corporation from someone who does not possess existing legal obligations to the organization gives rise to risk. A corporation’s employees and suppliers have well-established legal rights and responsibilities to the organization and, accordingly, risks of accepting ideas from these sources are either fairly low or measurable. This is not the case with people who are not employees or suppliers. And, since lawyers are paid by the corporation to reduce or eliminate legal risk, historically, corporations have generally been advised by their lawyers not to accept unsolicited ideas.
This risk aversion generally permeates the DNA of a corporation in the form of conservatism in regard to any idea that is presented to the corporation from someone other than an employee or a supplier. This means that the automatic response to an unsolicited idea will be “no.” Because most inventors are inherent optimists, they may believe that they might be able to change this response to a “maybe” or even “yes.” However, the chances of this happening are vanishingly small as no one in the corporation will likely stick their neck out to go against the standard corporate policy to bring an untested new idea into the organization, especially when the lawyers are involved.
EXISTING R&D AND NEW PRODUCT DEVELOPMENT INFRASTRUCTURES AND INCENTIVES
Risk adverse lawyers are not the only reason why those with great products or technologies are typically thwarted in their attempts to get a corporation to review their ideas, however. Most corporations spend a significant portion of their operating budgets on new product and technology development. The people who are paid to do this certainly consider themselves to have the best knowledge about what their company needs to meet its future needs. Moreover, these people have historically been evaluated for raises or promotions in large part on their technical prowess and creativity.
When their employer sees it necessary or prudent to accept ideas from outside of their existing infrastructures, it follows that those charged with developing new products and technology may somehow feel slighted. This is significant because any idea accepted from outside the corporation will need substantial development to make it acceptable as a finished product or technology. Since the existing infrastructure will be responsible for getting it to market, it is necessary for a corporation’s R&D and product development personnel to not only accept the premise that good ideas can come from outside, but also for them to be evaluated on their ability to take externally developed ideas to market. Those with corporate experience will recognize that this requires modification of an organization’s existing incentive and reward systems, which generally cannot happen unless upper management is involved.
Put simply, most corporations today do not possess infrastructures that can successfully capitalize on externally developed ideas. For someone with a good idea, this means that they should not hold out any expectations that a corporation will accept their unsolicited product or technology idea unless they can see evidence that the organization’s management has instructed their employees be willing to move externally developed ideas through the organization. In other words, those hoping to convince a corporation to buy their idea should only submit their ideas to corporations that have developed Open Innovation infrastructures. (More on this in a later post.)
TIMING IS EVERYTHING
Even if a corporation has expressed interest in evaluating externally developed products and technology, the issue of timing looms large in every idea submission. Every corporation’s product pipeline is developed in accordance with established internal processes. When those processes have been set into motion, even the best ideas may need to be ignored because the organization does not possess the resources to take its attention off the existing projects.
Moreover, if a corporation does not have the “bandwidth” to evaluate an idea at a particular time, an inventor should abandon all hope that the corporation will ever look at the idea. While it would seem to make sense for a corporation to evaluate previously submitted ideas whenever a new product development process is initiated, in reality this rarely happens. Old ideas are just that—“old”—and, in the excitement of an innovation initiative, it is likely that anything that has been laying around the corporation for a while will be considered “stale” and not relevant to the corporation’s current problems. Also, at most organizations, product development people move to new positions every couple of years, so even if an idea was judged as worthy for future evaluation by an employee, it is doubtful that that person will still be around when the time is appropriate for consideration in the future.
SO WHAT’S A SOMEONE WITH A GOOD IDEA TO DO?
While it’s true that the odds are stacked against an inventor, a bit of strategy and pragmatism can improve the probability that a corporation will consider the idea. A subsequent posting on this blog will provide some thoughts in this regard.