ENCOURAGING AND PROTECTING NEW IDEAS

ENCOURAGING AND PROTECTING NEW IDEAS
In many firms, idea generation is a haphazard process. However, entrepreneurial ventures can take certain concrete steps to build an organization that encourages and protects new ideas. Let’s see what these steps are.
Establishing a Focal Point for Ideas
Some firms meet the challenge of encouraging, collecting, and evaluating ideas by designating a specific person to screen and track them—for if it’s everybody’s job, it may be no one’s responsibility.51 Another approach is to establish an idea bank (or vault), which is a physical or digital repository for storing ideas. An example of an idea bank would be a password-protected location on a firm’s intranet that is available only to qualified employees. It may have a file for ideas that are being actively contemplated and a file for inactive ideas. Other firms do not have idea banks but instead encourage employees to keep journals of their ideas.
Encouraging Creativity at the Firm Level
There is an important distinction between creativity and innovation. As indicated in Chapter 1, innovation refers to the successful introduction of new outcomes by a firm. In contrast, creativity is the process of generating a novel or useful idea but does not require implementation. In other words, creativity is the raw material that goes into innovation. A team of employees may come up with a hundred legitimate creative ideas for a new product or service, but only one may eventually be implemented. Of course, it may take a hundred creative ideas to discover the one that ideally satisfies an opportunity.
An employee may exhibit creativity in a number of ways, including solving a problem or taking an opportunity and using it to develop a new product or service idea. Although creativity is typically thought of as an individual attribute, it can be encouraged or discouraged at the firm level.52 The extent to which an organization encourages and rewards creativity affects the creative output of its employees.53 Table 2.5 provides a list of actions and behaviors that encourage and discourage creativity at both the organizational level and the individual supervisor level.
Protecting Ideas from Being Lost or Stolen
Intellectual property is any product of human intellect that is intangible but has value in the marketplace. It can be protected through tools such as patents, trademarks, copyrights, and trade secrets, which we’ll discuss in depth in Chapter 12. As a rule, a mere idea or concept does not qualify for intellectual property protection; that protection comes later when the idea is translated into a more concrete form. At the opportunity recognition stage, however, there are three steps that should be taken when a potentially valuable idea is generated:
Step 1
The idea should be put into a tangible form—either entered into a physical idea logbook or saved on a computer disk—and dated. When using a physical logbook, be sure that it is bound so that it cannot be alleged that a page was added. Make all entries in ink and have them witnessed. If an idea has significant potential, the signature of the person who entered the idea into the logbook and the witness should be notarized.
Putting the idea into tangible form is important for two reasons. First, if the idea is in concrete form, is original and useful, and is kept secret or is disclosed only in a situation where compensation for its use is contemplated, the idea may qualify as a “property right” or “trade secret” and be legally protected under a variety of statutes.
Second, in the case of an invention, if two inventors independently come up with essentially the same invention, the right to apply for the patent belongs to the first person who invented the product. A properly maintained idea log provides evidence of the date that the idea for the invention was first contemplated.
Step 2
 The idea, whether it is recorded in a physical idea logbook or saved in a computer file, should be secured. This may seem like an obvious step, but it is one that is often overlooked. The extent to which an idea should be secured depends on the circumstances. On the one hand, a firm wants new ideas to be discussed, so a certain amount of openness in the early stages of refining a business idea may be appropriate. On the other hand, if an idea has considerable potential and may be eligible for patent protection, access to the idea should be restricted. In the case of ideas stored on a computer network, access to the ideas should be at a minimum password protected.
Step 3
Avoid making an inadvertent or voluntary disclosure of an idea in a way that forfeits your claim to its exclusive rights. In general, the intellectual property laws seek to protect and reward the originators of ideas as long as they are prudent and try to protect the ideas. For example, if two coworkers are chatting about an idea in an elevator in a public building and a competitor overhears the conversation, the exclusive rights to the idea are probably lost.
In summary, opportunity recognition is a key part of the entrepreneurial process. As mentioned, many firms fail not because the entrepreneurs didn’t work hard, but because there was no real opportunity to begin with.