Fear, uncertainty and doubt (FUD) provide a shoddy foundation for an effective innovation strategy.
Blogger Jeffrey Phillips, in a recent post, argues that FUD-based marketing campaigns value “what’s known and experienced … in a decision process [more] than what’s new or unknown. [FUD marketing] argues that consistency in decision making and loyalty to the status quo are more valuable and more defensible than change.”
Here’s an example of marketing based on fear, uncertainty and doubt: FUD-utilizing company X says “if you buy competitor’s , though you will pay less for their product at first, you will pay far more down the road in support fees, poor product security and poor compatibility with existing industry standards.” FUD is a great technique for incumbent companies that have a strong incentive to want things to stay the same.
However, a company too fluent in FUD marketing puts their own internal culture at risk. A relentless focus on defending the status quo may spill over into the inside, fostering a negative, innovation-resistant internal culture, luring strategy-setters away from fact-based decisions and deterring them from exploring great new ideas.
Even more damaging to an organization’s ability to innovate is inward-facing FUD, or when people use fear to justify why strategic change is dangerous and should be avoided. Inward-facing FUD also goes by the name of “politics;” internal FUD is employed by competing fiefdoms that (intentionally and unintentionally) use fear, uncertainty and doubt to justify strategy that limits the productivity of other parts of the organization.
Eventually, strategic decisions end up being based on fear, uncertainty and doubt rather than rational, fact-based discussion; if used maliciously, FUD provides a smokescreen for someone defending a self-serving and unpopular course of action. Internal FUD can be is harder to identify than outward-focused marketing FUD, and more difficult to inoculate ourselves against when we’re swimming right in the midst of it.
Companies use marketing FUD to defend their incumbency against their competitors. Internal divisions use FUD to convince themselves and others that even though the status quo is miring an organization in dysfunctional procedures and antiquated products or services, the division and company need to keep doing what they’re doing.
I’ve seen internal FUD used everywhere I’ve worked — corporate, academic and government — so no sector is exempt. In my experience, however, despite good intentions, university administrations are particularly vulnerable to rampant infestations of inward-facing FUD. While undoubtedly all parts of a university administration are riddled with FUD-slinging fiefdoms, in my experience, a particularly FUD-ridden university strategy — or lack thereof – is conducted by the university fiefdoms that manage university patent portfolios.
Most universities work hard to develop a reasonable strategy to navigate the complicated ecosystem that surrounds innovative university research. However, too frequently, universities, even prestigious ones striving to foster an entrepreneurial climate on campus, use fear, not facts, to justify their intellectual property (IP) policy, particularly when it comes to IP clauses in industry/university research sponsorships.
For those unfamiliar with university/industry research collaborations, most U.S. research universities (with a few notable exceptions — I just spoke to one the other week) insist on an IP clause that gives the university full ownership of any patents, materials and data that result from the research project. Since businesses, obviously, also have a stake in the results of the research they are sponsoring, they’re not so eager to both fund the research project and to also sign away their rights. As a result, many businesses report that their biggest barrier to joining forces with universities to pursue innovative research is an IP clause whose purpose appears to be to protect the university’s interests. If neither side is willing to give in, it’s not uncommon for a one-sided IP clause to become a deal-breaker.
Why would a university jettison a perfectly good research collaboration by insisting on owning phantom patents that may or may not arise from research results? Because the technology commercialization unit is tasked with monetizing and safeguarding the university’s IP portfolio. When a faculty wins an industry research contract, the tech commercialization office must approve the deal. The tech commercialization unit is incented to err on the side of caution when approving the IP clause in a sponsored research project. No good administrator wants to compromise their professional standing by being the one who let the next Google or Gatorade slip out the door for cheap. At unfortunate universities where the tech commercialization service is perceived as the grim reaper of innovation, to defend its frequently unpopular position, its administration will claim that without stringent IP clauses, the university would be mercilessly fleeced by greedy companies (fear). Rather than defending the university’s IP strategy with strong arguments backed by solid data and several convincing case studies, instead, a skilled FUD-meister will paint a fear-based, statistically unlikely, but compelling picture of how he or she is single-handedly saving the university from foolishly giving away millions and millions of dollars in licensing revenue.
Letting phantom patent revenue stifle research partnerships is not in the best interests of the university, the faculty, and the tax-payers. At most universities, future patent revenue is a case of wishful thinking since 99% of university patents never earn money. In fact, since universities take a hefty overhead cut on every research grant — corporate and federal — that comes in the door, the income a university earns from research grants far outweighs the revenue earned from licensing patents. In contrast, the university’s technology commercialization service, with a few exceptions, costs its universities a million or two dollars a year in office overhead and in legal fees for patents that no one ever uses. Aside from money, perhaps the most biggest opportunity cost of faltering university/industry partnerships are the intangible benefits. Our society benefits from unfettered information-sharing between university and company researchers, job opportunities and internships for students, and perhaps most importantly, an open, collaborative atmosphere where researchers can work together without worrying about their university cracking down on unreported inventions or unapproved resource sharing.
To be fair, universities sometimes have good reasons to be wary of companies bearing gifts in the form of sponsored research agreements. Many responsible, astute university administrators correctly want to ensure that their labs do not end up being cheap, outsourced corporate research satellites. And, although it may be unpopular, a flexible, case-by-case basis IP clause is not without merit. However, IP clauses become innovation killers when they’re enforced rigidly and mechanically. FUD may be a proven and powerful marketing technique, but should not be the foundation for an organization’s ineffective innovation strategy.
Since universities lack the corrective force of a firm bottom line, they can afford the high cost of FUD-driven innovation strategy. Thanks to the Internet and new business models, the past few decades have brought about profound changes in the way innovative research and technologies are generated, managed and shared. Universities, however, are buffered from these winds of change. Unlike a company that must continue to please its customers, universities have the luxury of exceedingly loyal “customers” – current and prospective students, alumni donors, businesses that sponsor research, and federal funding agencies. University customers are tenacious, and switching universities, while possible, is not a simple as switching cell phone providers. As a result, universities enjoy the dubious benefit of being able to fail slowly. A strong brand name can carry an under-performing university for decades. University’s deep pockets and loyal customers offer university administrations little incentive to set up a culture of checks and balances to protect their strategic capacities against the quicksand of FUD-driven thinking.
If we continue to defend the status quo in our university IP policies, we risk choking off our nation’s universities ability to freely explore fresh ideas, and the opportunity for faculty and students to tap into the industry know-how and funding they need. Let’s think positive for a second: perhaps university IP clauses are NOT a necessary evil. Maybe open and flexible management of university/industry partnerships would have FEWER negative consequences than maintaining the course universities are on now. Even many frontline university IP managers (yes, lots of them are forward-thinking people who would love to try new approaches) privately disagree with their university’s IP policy, yet, when faced with a stone walling management, keep their heads down and their mouths shut. What a shame that the process of hammering out IP strategy is based on FUD, and not informed by factual insight from the practitioners actually managing the sponsored research contracts and patent licensing deals.
FUD-oriented marketing has its uses, and defending an incumbent market position is not always a bad corporate strategy. However, continuing to permit inward-facing FUD to justify suboptimal university IP strategy could paralyze our nation’s vital innovation ecosystem. Since technology commercialization staff are muzzled and most university administrators are incented to restrict the free flow of university innovation, who on campus will lead the charge to dismantle their university’s FUD-based IP strategy? I think it’s time for university inventors to put some skin in the game. Inventors need to band together and push their administrators to justify incumbent IP policies with real facts and real research. Don’t grieve, organize! And let me know if there’s anything I can do to help.
Oh yes, while we’re on the topic of anti-entrepreneurial university environments. Clumsily crafted conflict of interest policies that pry into a university employees after-work activity are perhaps the epitome of fear driven, doubt inducing ineffective university strategy. We’re all against corruption and misuse of tax-payer funded resources, but what happens when the mandatory prophylactic is more devastating than the disease?
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Melba Kurman writes and speaks about innovative tech transfer from university research labs to the commercial marketplace. Melba is the president of Triple Helix Innovation, a consulting firm dedicated to improving innovation partnerships between companies and universities.