What makes an effective technology scout?

Article #1: What Makes an Effective Technology Scout

In today’s ultra-competitive and fast-changing business environment, innovation distinguishes the winners from the also-rans. But few companies have the time, resources and/or expertise to continually develop breakthroughs on their own. The days of internal labs conducting pure R&D are long gone. Instead companies have embraced Open Innovation (OI) – going beyond their own four walls for ideas and technologies with game-changing potential.

Technology scouting represents an organized approach for identifying needs, gaps and opportunities, and then finding solutions outside the borders of the enterprise. It is a business development and growth-oriented activity that goes hand in hand with Open Innovation.  There are many forms (partnerships, licenses, acquisitions, crowdsourcing, contests, etc.) — often with multiple players – and the reach is increasingly global.

The more ambitious and clearer the corporate goals, the greater the impact.  The most effective scouts have specific targets and are equipped to carry them out.

  • Examples: Procter & Gamble seeks to triple the impact of Open Innovation by driving $3 billion in incremental sales annually and ensuring that P&G is seen as the Partner of Choice for innovation partnerships.
  • Unilever plans to double the size of its business while reducing environmental impact–Tech Scouting will contribute to the company’s ‘Bigger, Better, Faster’ goals.
  • GlaxoSmithKline Consumer Healthcare (in 2007) had less than 20% external technology. They set an aggressive goal of 33% in 3 years — achieved 33% in 18 months. By 2010, they reached 50%.

According to technology innovation expert Jay Paap, president of Paap Associates, scouting complements internal R&D and marketing resources, and can serve as a catalyst to increase the productivity of both. By driving needs definition and aiming for a strong fit between need and idea, it can reduce the risk of launching products that don’t sell. With organizational support and strong incentives, a formal scouting process can also effectively address internal resistance to externally-generated ideas.

Still, technology scouting is not a panacea. It is an effective tool when you (1) need to solve a technical problem quickly due to some change in the competitive landscape, (2) are looking to move your organization into a new market without stressing or adding to internal resources to do so, or (3) wish to gain specific skills without increasing overhead.

Technology scouting doesn’t replace your internal R&D staff, and while it can be a valuable adjunct, it can also be seen as a threat – particularly today as jobs and budgets are being cut. To cope with that possibility, technology scouting programs must be managed very consciously with an emphasis on business growth and market leadership.

The process typically follows this sequence:

  • Looking for opportunities
  • Evaluating and assessing opportunities and capabilities
  • Determining and negotiating win-win deals
  • Implementing the deal and monitoring its success

Considerations throughout include staff motivation, communication, senior management support and intellectual property management. Moving quickly and being open to change are key.

The role of the technology scout includes:

  • searching for opportunities and leads in an assigned region
  • evaluating leads
  • offering regional insight into leads
  • making the link between a lead and company strategy.

A high-performing tech scout will:

  • have in-depth knowledge of market trends
  • cultivate an extensive and varied network of contacts and resources
  • maximize company’s capabilities and work toward strategic goals
  • stay on top of emerging trends and technologies
  • be entrepreneurial, willing to take risks (according to Unilever, this is the number one trait of an effective scout – often untapped in a large corporate environment)

Other traits Unilever identifies:

  1. Creativity, deductive thinking.
  2. Excellent written and verbal communication skills.
  3. Strong competence in performing intellectual property and technical due diligence.
  4. Ability to influence scientific direction of projects based on strong knowledge of relevant science.
  5. Strong aptitude for learning a broad range of scientific disciplines and translating that knowledge into technology options for a wide range of applications.
  6. Strong networking skills both internal (across category and business functions) and external.
  7. Ability to manage multiple simultaneous tasks.
  8. Experience in negotiating/arranging partnership agreements.
  9. Excellent project management skills.
  10. Good listener who pays attention to detail.

While many skills can be learned, the most effective scouts will possess the ten named above when they start.  Then it is up to senior management to communicate corporate strategy and provide the budget, tools and external access.

This article published in conjunction with MRT’s workshop series:
Technology Scouting to Accelerate Innovation – Implementing an External Sourcing Program – check our website for the latest dates and locations of this popular seminar.

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